Today at a newsconference president Obama said that Americans were lazy particularly when it comes to attracting new investments from abroad. There have been a slew of comments about whether or not it was appropriate for Obama to speak this way about Americans particularly when he was abroad, but I do not think that this is the key point here. Instead, I think that it is important to look at Obama's comment as an indication of his understanding or, more precisely, his lack of understanding as to what drives foreign investments.
One does not have to be a genius to realize that investors are looking for places where they can maximize their profits. That means they want to find places with lower costs, lower taxes on profits, a secure rule of law and a regulatory climate that is both understandable and not overly intrusive. Obama blames a lower level of foreign investment in the USA on laziness by the American people and he ignores each of the actual causes. This is not surprising since Obama has taken major steps in his three years in office to hurt America on each of the key factors that would lead to foreign investment.
On lower costs, Obama has been a true failure. Obama has taken step after step to raise American energy costs. He has put a moratorium on oil drilling and then, after lifting the moratorium, made it almost impossible to get certain permits. He has had the EPA threaten drilling in shale for gas and oil by raising issues about the possible regulation of hydrofracking. Obama has made the use of coal for generation fo electricity much more expensive by imposing new harsh requirements on mining and burning coal. Obama has also put in Obamacare which will greatly raise the cost of health insurance for employers in the USA. The list goes on, but you get the picture.
Regarding corporate taxes, Obama has squandered the chance to get anything done. It has been clear for years that the Republicans would support a change to the corporate tax structure that greatly lowered the marginal rate while eliminating the loopholes. Just imagine! General Electric could no longer pay no tax on billions of profits while some small company that made $100,000 paid close to one third of its profits to the feds. Most of the potential new investors in the USA do not have the lobbyists in Washington to get favors from the Obamacrats that could reduce tax burdens, so they are faced with the second highest tax rate in the world. Just think how many new investments and how many new jobs could have been created if Obama had abandoned his contributors and put the good of the American people first here.
As to the rule of law, there is no question that property is safe in the USA. The problem, however, is that Obama has put crony capitalism in place. Friends of the president get special favors almost as if the USA were a banana republic (and not one selling sportswear). How many waivers did the Obamacrats grant to their supporters with regard to Obamacare? How many so-called green energy companies owned by contributors got multi million dollar grants from the federal government? Why would an investor want to come to the USA to fight that kind of graft?
As to regulations, Obama has been a disaster. Are the regulations understandable? Maybe we should all recall Pelosi telling us that we have to pass Obamacare to find out what is in it. There are about 2000 new regulations coming to enforce Dodd Frank. Does anyone know what is in all of those regulations and how they will work together? I doubt it. And what of all the new and proposed EPA regulations? Items that Congress refused are being pushed through by EPA regulations. Area after area of like and commerce are being regulated without even any Congressional oversight.
In other words, Obama has been uniformly bad when it comes to encouraging foreign investment. On each possible count, he has done the wrong thing. But Obama says that Americans are lazy. The best analogy is of a resort. Obama is setting fires at the hotel, putting vermin in the rooms, oversalting the food and overcharging for visits. Nevertheless, he blames the lack of visitors on the American people not being active enough in inviting people to come to the resort.
Obama is just trying to cover up his own failures.
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