US Businesses Vote with Their Pink Slips

Before President-elect Barack Obama had a chance to resign from the US Senate there was an out pouring of pink slips through out US industry. Some may argue that they would have happened regardless of who won, but I found it interesting that these businesses held on to these many employees until after the election either to boost Republican hopes for reelection or to make a protest statement if things didn't turn out favorable for business.

We already knew that the job creators -- businesses of all sizes -- were supporting McCain and it wasn't even close. According to CEO Magazine's survey, over 80 percent of CEOs favored McCain over Obama. McCain's support or the fear of Obama was overwhelming.

However, a majority of Americans didn't seem to care. They desired a "tax cut" over a job (although we are now told that being employed will be a requirement for such a cut). It appears that many of them will enjoy neither.

Barron's notes that "A week ago, we got word that the number of unemployed Americans in October shot up by 603,000, the second largest increase in 28 years! Today, the Labor Department tells us the deterioration actually accelerated in the first days of November. The number of people seeking unemployment benefits surged by 516,000 in the week ended Nov. 8. This is the largest weekly increase since immediately after Sept. 11 and the second biggest in 16 years. At this point, more Americans are collecting unemployment insurance than at any time in a quarter century, with some 3.9 million on the dole as of Nov. 1, a 51% increase from a year ago."

The timing of these layoffs and the elections are more than coincidental to me. They are directly connected. I have been told by business owners for months that if Obama was elected, jobs would have to go. We don't know if the new President will keep his promises, but business owners certainly have. Businesses through out the country are having a second election and it is costing Americans their jobs. I don't blame American enterprise, however, but the new Administration that has a predatory view of it.

The current scenario reminds me of a mild version of Ayn Rand's Atlas Shrugged. In the Objectivist philosopher's book, she describes a scenario where the "men of the mind" go on strike and stop contributing to commerce, art, culture, inventions, etc. In that book the people that drive the economy grow tired of being mistreated by the excesses of government and they simply stop working. No, we are not quite there yet, but give us time.

Who knows, Obama might be the pragmatist he claims he wants to as he has stated in a recent interview. The media, however, isn't buying it and in light of his rhetoric and record, I cannot blame them.

Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.

Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Job Creators Cast Their Votes

CEO Magazine, a leading publication of the nation's business leaders, has recently done a survey of the nation's Chief Executive Officers about the up coming race for the White House. The survey did an assessment of their view of how Barack Obama and John McCain would help the country's economy and support job creation.

The results weren't even close. Eighty percent of all participants voted for John McCain over Barack Obama. This shouldn't be a surprise to anyone. Barack Obama keeps talking about "tax cuts" for 95% of the economy and only the top 5 percent will be saddled with a tax increase. CEOs know, however, that half of that 95 percent don't pay any taxes and that five percent group pays far more than any other sector. In fact, the Wall Street Journal reports "As it happens, the top fifth of earners currently pay 67% of all federal taxes -- including not just income taxes, but payroll taxes, corporate taxes and death taxes. The top 1% of earners pay 26% of all federal taxes." In other words, the economics simply does not add up.

But the issues covered by the survey are not limited to taxes. The publication's report card breaks down policies to include energy, economic and fiscal policy, foreign policy, defense, environmental, education, tax, and health care. The over all grade for Obama was C- and the grade for McCain was B-. Neither candidate scored an A, but Obama scored Ds while McCain's lowest grade was a C.

Obama's biggest weaknesses according to the survey are economic and fiscal policy, foreign policy, defense, and (as seen before) taxes. CEOs believe that Obama's policies would put significant upward pressure on spending, his lack of experience will find the US in conflicts that could undermine economic stability, there are similar concerns about defense policy, and we have already seen the business view of Obama's tax policies.

McCain's lowest grades were in energy, the environment, education, and health care. McCain is very new to being serious about pursuing domestic drilling (which is the fastes way towards lowering prices), furthermore he is one of the most ardent supporters of extreme environmentalism (which make businesses concerned about the economic impact). Furthermore, most business leaders have long felt that policy makers don't understand the educational demands of America. This includes McCain. Finally, business has been rightly concerned about the impact of proposed health care policies on the economy. In this, McCain's policies raise many questions (especially the taxing of benefits).

So what about the 20 percent that would vote for Obama over McCain? I would assume they are part of the group of leaders representing mega businesses that have consistently supported Democrats because their companies can afford to do so and often see government as a means of regulating their competitors out of business.

What is most interesting about the article is that the focus is on job creation more than any other area. People can talk about helping the middle class all they want, but there is no better benefit to anyone than opportunity created through job creation.

Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.

Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.