In the second part of his blog, Ted Bromund blogs on the depressing attittude to business of the federal government.
In my last post, I noted that U.S. states are rising and falling, in part, because some are more business-friendly than others. In a larger sense what is depressing is that it should be incredibly, blatantly, bleedingly obviously that the ability of business to grow and to create jobs can be reduced, or even eliminated entirely, by uncertainty created by government action and the cost of rules imposed by it.
Earlier this month, for example, California-based Apple announced that it was considering building a new data center in Oregon, because Oregon has low energy costs (a California mandate on renewable energy is projected by an official state commission to raise costs by about 10 percent by 2020) and a more favorable tax code. Apple is undeniably on the liberal side of the political spectrum, but that doesn’t mean it can ignore business realities. CKE Restaurants, the parent company of the very successful Carl’s Jr hamburger chain, has similarly stopped building restaurants in California because the approval process takes up to two years. In Texas, it can be six weeks.
The Heritage Foundation has found that the cost of the major new regulations imposed by the Obama Administration from January 2009 to mid-2011 alone amounts to $38 billion. Yet the reaction of leading Democrats is simply to deny that regulations have any costs at all. As Senator Harry Reid, the leading Democrat in the Senate, put it a few weeks ago, “my Republican friends have yet to produce a single shred of evidence that the regulations they hate so much do the broad economic harms they claim. There’s because there aren’t any.”
This is in keeping with the thinking of President Obama, who during his brief experience in the private sector felt, in his own words, like “a spy behind enemy lines.” It is a strange thing for the President of the United States to describe private enterprise as the enemy. But in his “New Nationalism” speech in Kansas, the President repeated his claim that one reason why there is so much unemployment in the U.S. is that “If you were a bank teller or a phone operator or a travel agent, you saw many in your profession replaced by ATMs and the internet.” This assertion about the dangerous effects of the internet has been debunked so many times it is barely worth the effort to point out that if the creative destruction of jobs by technology made us poorer, we would never have become rich.
When Henry Ford put the buggy whip manufacturers out of business, that was a good thing. But you’d never know this by listening to the President. All the evidence goes to show that he and his followers believe what they are saying. And that in turn goes some distance to explaining why America’s red states are growing, and why the President’s path to re-election in 2012 is narrow. In other words, if the fundamental advantage of the left in America is the rise of administrative and bureaucratic government, the fundamental advantage of the right is, as Lady Thatcher put it, that sooner or later socialism runs out of other people’s money.
Dr. Ted R. Bromund is the Margaret Thatcher Senior Research Fellow in the Margaret Thatcher Center for Freedom in the Heritage Foundation in Washington, DC. He joined Heritage in 2008 after a decade as the Associate Director of International Security Studies at Yale University, a research and teaching center dedicated to diplomatic, military and strategic history, and grand strategy.