Kevin Price
So Obama says he wants "Broad Economic Growth"
By Kevin Price
Recently President Obama has been beating the drum on what is necessary to achieve economic prosperity. At a press conference he mentioned that it was important to "focus" on what was needed to achieve "broad economic growth." With the highest unemployment in 30 years, that is certainly a message that resonates with most Americans, however, his approach versus the classic ones that have worked historically differ greatly.
I have talked about this often on the radio, Fox News' Strategy Room, and in this column. On a visit to the Fox News network there was a discussion on the consequences of economic policy that reminded me of the situation today. The debate focused on the approaches the Administration was taking and the results they were producing. Some of the issues discussed continue on today.
© Kevin Price
November 17, 2010
Recently President Obama has been beating the drum on what is necessary to achieve economic prosperity. At a press conference he mentioned that it was important to "focus" on what was needed to achieve "broad economic growth." With the highest unemployment in 30 years, that is certainly a message that resonates with most Americans, however, his approach versus the classic ones that have worked historically differ greatly.
I have talked about this often on the radio, Fox News' Strategy Room, and in this column. On a visit to the Fox News network there was a discussion on the consequences of economic policy that reminded me of the situation today. The debate focused on the approaches the Administration was taking and the results they were producing. Some of the issues discussed continue on today.
- Tax cuts vs. tax credits. The President has been emphasizing short term and often politically convenient "tax credits," when what is actually needed are deep and across the board tax cuts, if we are serious about creating more jobs. There are, of course, various types of tax cuts. "Demand side" or "consumer driven" tax cuts are geared towards the middle class. They are designed to increase consumer demand and votes for those who offer them, but in an economy such as this, they are used to pay bills and little else. This is why they have little or no impact. Supply-side tax cuts, made famous by Calvin Coolidge, John F. Kennedy, Ronald Reagan, and even George W. Bush are across the board and proportional in their reach. These cuts lead to significant wealth (and job creation). The reason for this is simple, they make it cheaper for businesses to create more jobs and to participate in economic activity. If the cost becomes too high, businesses do as little as possible to handle economic uncertainty. This was the exact topic of a recent Price of Business program in which I interviewed Brian Sullivan of the Fox Business Network.
- If the President is serious about spurring broad economic growth, he should be very worried about his own banking regulation. The recent bill passed by Congress and signed into law by him has added hundreds of new regulations, with thousands of pages of bureaucracy, and promises to raise the price of banking and the cost of employment.
- The current administration seems to have open hostility towards small to medium businesses. Virtually all of its policies seem designed to pity the poor and will likely create more of them and his policies seem to desire mega corporations, because they are easier to control. What the Obama Administration seems to despise are the small businesses and entrepreneurs that drive the vast majority of job creation in this country. Approximately 80 percent of all jobs are created by small businesses, it should be no surprise that unemployment has practically doubled in the last few years as the war on entrepreneurship continues.
© Kevin Price
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