On Shearing Sheep

Obama’s economic plans are relentlessly hostile to small business.

by Victor Davis Hanson - July 15th, 2009 - National Review

You don’t produce wool by skinning the sheep. But that seems to be the present strategy to get small businesses to begin hiring, buying, and expanding.

There is apparent surprise among Obamians that unemployment has soared the last six months. The much-anticipated stimulus sputtered, and there is a sense of bewilderment in the administration about why joblessness and economic growth are stagnant after the government injected trillions of dollars into the system.

Perhaps the Obama administration needs to remember the psychology of business. After the shock of the September meltdowns, the natural reaction of anyone whose livelihood relied directly on markets was to conserve, pull in one’s horns, and ride out the mess.

As Hanson explains, Obama thought he could threaten small business to do as he ordered. He also thought there was no difference between Wall Street and Main Street. Since Wall Street gave him such large campaign contributions, Obama and his people thought that all business was in love with him.

Obama also cannot seem to get a grip on why someone who makes $250,000 a year risking his own money is different than someone who makes $2.5 million a year touting stocks with nothing but his time invested. The only risk for the Wall Street "Master of the Universe" (as they love to call themselves) is not making as much money next year. For the small businessman the fear he faces is losing everything he has.

Obama and his people also cannot get a grip on the concept of "net" versus "gross" profit. When they tried to restrict programs for farmers that "grossed" $250,000 a year they showed they were blithely ignorant that most farmers that "grossed" $250,000 a year made far less than a normal salary after costs were considered. Often the subsidy was the difference between making it and failing. How can people get to jobs at the level Obama put them and still be that ignorant of the fact that the costs of business are real? They are not just a way to hide profits.