WASHINGTON – Much is said about the magic powers of well crafted federal public policy to “create jobs”. Yet, the record is not so good. Plenty of honest attempts; modest results. But how about the opposite? How about a mix of bad policies that tend to depress job creation?
Job killers, according to Richard Kovacevich
Well, you should listen to Richard Kovacevich, former Wells Fargo CEO. In a recent interview on Bloomberg TV Kovacevich pointed out that small businesses, traditionally the true engine of jobs creation in America, are no longer performing their historic role. And why not? According to what business owners tell Wells Fargo, (their banker), for three reasons.
Number 1: Too much regulation makes it difficult and far too onerous to understand and comply with the new rules.
Number 2: Obamacare compliance looks too expensive for small businesses. So, they prefer not to hire and stay small, in order to avoid the legal mandates that will soon hit larger firms on providing insurance to employees.
Number 3: Taxes are too high. And this is not about corporate taxes that may even be cut. The fact is that most small business owners pay taxes as individuals. As individual tax rates go up, small business owners feel the pinch.
The Obama administration should listen to people like Richard Kovacevich, people with considerable experience in lending to small enterprises. Contrary to popular belief, America’s economic might is not about General Motors, IBM, or General Electric. It is about small enterprises that energize the whole country. If they cease to be the jobs creators because they see too many public policy obstacles on their way, then you can expect this unprecedented period of American stagnation to last even longer.