President Obama is a magician without equal. With the waving of his pen, he can make thousands of jobs disappear.
Radio Shack, the venerable electronics retailer, just announced it would be shuttering 1,100 stores following a dismal performance in the past holiday season. Office-supply giant Staples followed with a plan of its own to close 225 stores and focus on its more profitable online business.
This is what happens when Washington policies stifle innovation and throw obstacles in the path to prosperity.
The Labor Department put the picture in broader terms, announcing that the official unemployment rate ticked up from 6.6 percent to 6.7 percent last month.
This figure is in many ways misleading. In the past year, the population grew by some 2.2 million, but the number of people working remains virtually unchanged — the labor force participation dipped one-half percent to 63 percent. It hasn’t been that bad since Jimmy Carter asked daughter Amy for economic advice.
The global outplacement firm Challenger Gray & Christmas issued a report Friday estimating that American business firms were planning to cut more than 41,000 jobs, with retail and financial services taking the largest cuts.
This jibes with the store closings by Radio Shack and Staples, and the results of an extensive survey of small banks conducted by the Mercatus Center at George Mason University, which finds that community banks are hit disproportionately harder by the Dodd-Frank Wall Street regulation law.
Small community banks get up close and personal. They have a specialized knowledge of their customer base and could make loans based on this were it not for the one-size-fits-all Dodd-Frank rules.
The result is small businesses are missing out on loans, to the detriment of both the small banks and small businesses. Jobs that would have been created, aren’t. This is entirely predictable, but it’s the liberal faith that more laws make things better.
Successful and struggling businesses such as Staples realize that they must update the business model to thrive in the 21st century. Going online represents a radical departure from the past, but it makes sense.
The Obama administration, however, clings to old-fashioned Keynesian prescriptions that didn’t work in the 20th century and aren’t working now. Despite the five years of stagnation and failure, the White House still thinks that an easy-money policy and a flood of government spending will cure all ills.
In a rapidly evolving economy, the private sector must be free to innovate, to exploit technological and other changes, to seize the opportunity to expand and create jobs. Instead, the Obama administration continues with the tax-and-spend, borrow-and-spend program that created stagflation under Mr. Carter.
Even Mr. Obama’s own former chief economic adviser, Christina Romer, now says cutting government spending by a dollar generates more growth than increasing federal spending by a dollar.
The Federal Reserve can’t keep printing money forever. The scheme of buying billions of dollars in bonds to keep interest rates low is, even on its own terms, supposed to be a short-term solution. The idea is long past its expiration date.
Mr. Obama hasn’t changed in five years, and it grows tedious and tiresome. He would be a crowd pleaser if he could pull some jobs out his hat. But there’s no magic needed. All he has to do is get out of the way.
Read more: http://www.washingtontimes.com/news/2014/mar/7/editorial-the-great-disappearing-act/#ixzz2vNuZfA5s
