Monday, February 02, 2009

Obama and Business

Republicans have the reputation of being pro-business and Democrats as anti-business. Obama's actions in the first two weeks of his administration put him squarely in the anti-business category. Unfortunately, this also translates into being anti-job.

In a previous post I mentioned Obama's order to the EPA to allow states to make their own regulations. This is aimed directly at the auto industry. Several states decided that they were unhappy with federal response to global warming and tried to establish their own policies. This will create several problems. The first is the nightmare of dealing with 50 different policies. The second is that this will limit the number of high-margin vehicles that can be sold. Detroit depends on these sales to stay in business. It is also very possible that once this president has been set, the states will extend their policies to other industries.

With much fanfare, the first bill that Obama signed into law makes it easier for women to sue for pay discrimination that happened years before. While this may have been a good idea during a prosperous period, it is going to be a job-killer now. Businesses will have to spend money on legal battles that will have to be trimmed from other places. Many of the flood of suits that are likely to be filed will be unjustified. Note - I'm not justifying unequal pay. I am pointing out that passing this measure during a deep recession shows the Democrats' total disregard for jobs when ideology is at stake.

With much less fanfare, Obama also issues an executive directive making it harder to avoid using union labor when federal money is involved. Union labor is normally charged at a premium, in part because set-asides such as this distort the labor market.

All of these measures were done to please Obama's base - environmentalists, feminists, and unions. None of these groups have a record of caring about the average worker, especially environmentalists. Between this and the stimulus bill, Obama's message is that he only cares about jobs that he creates. When he has to choose between pleasing his special interest groups or saving jobs, he decides against jobs.

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