James Pethokoukis

Politics and policy from inside Washington

How Obama is freezing the job market

December 3, 2009

Let’s assume that the much-hyped White House “jobs summit” turns out to be a free-flowing exchange of ideas and views. Could happen. If that’s the case, then President Barack Obama shouldn’t be shocked if a few CEOs dare suggest that the sweeping-yet-stalled Obama agenda might … actually … you know … no offense, Mr. President … be contributing to the jobless recovery. (The union and academic invitees will protest mightily, natch.)

CEOs are saying as much amongst themselves. At a recent symposium, Intel boss Paul Otellini, a contributor to both parties, expressed concern about the “amount of variability in the system” created by the state of policy flux in healthcare, energy and tax policy. “It is very difficult to make a hiring decision,” he said. General Electric chief executive Jeffery Immelt, a strong supporter of Obama’s cap-and-trade proposal, added he would just like to “know what the rules are.”

All in all, a disturbing replay of the 1930s when FDR’s big changes left business reeling with uncertainty and confusion. The “devil you don’t know” and all that.

Small business is certainly with Big Business on this, particularly regarding the mercurial nature of healthcare reform. The substance of ObamaCare continues to morph daily — from the state of the public option to employer mandates to financing expanded coverage – as Senate leader Harry Reid scrounges for votes. On energy, the president will make big promises at Copenhagen even though cap-and-trade looks stillborn in the Senate.

As for financial reform, Senate banking committee chair Chris Dodd has proposed sweeping changes, while the Tim Geithner-Barney Frank version in the House seems beamed in from a universe where the credit crisis never happened. Compromise could prove elusive. Even Obama’s tax reform panel has delayed releasing its findings.

So Corporate America is about to enter 2010 – an election year – with the fate of the ambitious Obama agenda uncertain. Maybe the only thing for sure is that whatever job-creation package the White House and congressional Democrats eventually gin up, it will likely be a $300 billion or so combo of more transportation spending, more aid to cash-strapped state and local governments and some sort of hiring tax credit.

(And that gets at another critical flaw with the jobs summit. As any of the executives could tell Obama, brainstorming sessions are often the tool-of-choice of the highly ineffective manager. Such confabs are frequently used to give team members the illusion that they are contributing to the idea generation process. In fact, the manager has already made his decision. And that is, more or less, the case with Obama. At the very least, don’t expect any CEO suggestions of lowering personal, corporate or investment tax rates to get even a whiff of consideration from the White House.)

Of course, Obama could pivot and revamp healthcare reform into a more incremental, targeted bill that might actually pass with decent margins in both houses. And while cap-and-trade is gasping for air, a deficit-neutral carbon tax (offsetting payroll taxes) might actually pull in significant Republican support. Maybe even a fat payroll or corporate tax cut.

But the tendency toward election-year gridlock is fast approaching. And for frazzled Corporate America and a frozen job market, gridlock – and the uncertainty that goes with it – is not good.

Comments

Good article. You nailed it. Its exactly why we have a hiring freeze on right now at my company. Its a jobless recovery as the policies are so unknown in their impacts and what we do know is they shift lots of burdens onto businesses. Add local and states and you get a free for all. I feel like we are the calfs being led to slaughter. So I now vote by not hiring.

Posted by george | Report as abusive
 

It is not going to bet any better. They country as we know it is changing. Just like the tech bubble in the market, the housing bubble will NEVER go back to once were it was. People who are underwater in there mortgage will stay that way for a long time. In SW flordia it will NEVER go back to the levels a few years ago. Simple, fact Thanks to the Republicans and Democrats, lobbyist, and cooperate America most jobs that were good middle class jobs are in Manila, Mumbai, Bangladesh, china all over the jobs for banking call centers, accounting, banking, accounting, DSL/internet or Dish call centers, engineering, medical records, taxes, for Americans goes over seas. Millions of illegal immigrants are taking the lower to lower middle class jobs in our country. Unemployment is at 11% here and is not going to get better. At the same times the people who work for the government that over see this happening still have their early retirement, raises, pensions and healthcare. What are we going to have stop like cams and seat belt checks at evert corner to pay for goverment spending?. In another 20 years there will be no more middle class we will be like any other 3rd world country with rich & poor, no middle class. Were are the jobs going? Blame corporate lobbyist, Political policy (example millions of foreigners on H1B, N1B and Student Visas were given out over the last 10 years) to appease lobbyist and special interest. I hope Obama will be smart enough to see this and change policy. Its the top dozen management in companys & like 3% of people that have there millions already that make millions a year at the expence of the little guy and the middle class. Also millions used for contributions to lobbyist groups and politicians and in there pockets. Lobbyist hope to pull political favors to get what they want at middle class expence.In Closing Buy American to save America buy Ford, Chevy, Dodge , do NOT do bussiness with corporations that farm your local utility services, taxes, medical records to other countries. Do you think they give people in bangladesh, manila, singapore, china background checks. They can steal your identity, social security number and financial information. If you call your credit card and its goes overseas cancel it or dont do bussiness with them. Support the little guy, instead of supporting a top chinese importer like waldos who is cut throat to smaller bussiness, shop the smaller bussiness.My 2 cents,God Bless America·

Posted by Mark Capson | Report as abusive
 

The problem is millions of foreigners on H1B, N1B and Student Visas were given out over the last 10 years in this country are taking a lot of the good jobs. Most if not all of the money goes back to Pakistan, India, Syria, Iraq, Iran and Jordan. I bet some of them are muslim extremist who use work here as a conduit to funnel money back in what ever group they think is for their cause. A lot of them do 3rd party goverment contractor work. It’s a security risk also having so many work here, I know for a fact a lot of them dont even get back ground checks because they work for an agency. The back ground checks they do get are just in this country, they dont look into their background in the country they came from or check with Interpool

Posted by Mark Capson | Report as abusive
 

“to save America buy Ford, Chevy, Dodge”Toyota builds more cars in my state than any of the three you mentioned.

 

Let’s see….1) His father was not only a muslim but a communist (with the government of Kenya).2) His step-father was a muslim.3) His teenaged mentor was a communist.4) His preacher was(is) a communist and nut-job.5) His friend and associate in “education” is a communist.Hmmm….any wonder why he has sympathies for Islam and socialism?

Posted by gsr | Report as abusive
 

The job market should have been the focus all along. We’ve wasted time and money trying to rescue Wall Street fat-cats and Corporate goons. People with JOBS buy houses and cars. People without JOBS lose houses and cars (see: http://www.repofinder.com). At least the Government is finally waking up to this. Romney 2012

Posted by Mike | Report as abusive
 

“Of course, Obama could pivot and revamp healthcare reform into a more incremental, targeted bill that might actually pass with decent margins in both houses. And while cap-and-trade is gasping for air, a deficit-neutral carbon tax (offsetting payroll taxes) might actually pull in significant Republican support. Maybe even a fat payroll or corporate tax cut.”

Yeah, and O.J. Simpson will finally find “the real killers” and monkeys will fly out of my bung-hole on Christmas Day.

I daresay The Boy President can’t hope ‘n’ change himself 180 degrees, because to do so would be to openly admit his entire Weltanschauung has been wrong from Day One.

Can’t have that now, can we?

Posted by MarkJ | Report as abusive
 

Most manufacturing factors for economic recovery are settling into place. Unfortunately, one critical piece: employment growth, has yet to take hold. Actual labor costs will not be completely understood until the health care and other evolving policies are defined. Businesses can create jobs with or without government involvement once they know what it will cost them.

 

I am sure James P. feels embarrassed about this article after the great jobs report on friday.

Posted by rizzo | Report as abusive
 

FROZEN JOB MARKET. I would suggest that the Obama frozen job market is by design. Maybe some recall that Fed Head Paul Volker killed the inflation in the early 1980′s by high interest rates and tossing you and your neighbor out of work. Employment was frozen then and now. Presently, with the printing presses going full time in Washington a high rate of US unemployment reduces inflation flames. It would appear that the administration has an interest in keeping a high rate of unemployment for economic reasons as well as manipulating the masses per Saul Alinski.

Posted by walker1 | Report as abusive
 

Some would say that all of this is being done by Obama in order to destroy our way of life and impose socailism on us. Porgressives say “nothing like a good crisis to impose your will”. Thats about the only logical reason I can come up with for all of the stupid things that are being done. Hope I am wrong.

Posted by Ray Hull | Report as abusive
 

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