While he speaks of yet another jobs plan, this president consistently takes actions to kill jobs.  He is placing the active promotion of unions over job growth. In his fantasy land of fairness this makes sense, but anyone with business sense or experience (and his administration has very little) knows this is a sure way to kill jobs.

Early in his administration with the Democrats controlling both houses and the White House there was talk of a union card check bill that would have eliminated secret ballots for the workers in union elections.  Federal Express placed an order for 30 jumbo jets with language in  the purchase order allowing cancellation of half the order if this bill passed.  Domestically domiciled companies made plans to relocate overseas to avoid this intrusion into their affairs.  During the business panic in 2009 when this bill was being discussed several small businesses I knew spoke of this being the straw that would lead them to decide to shut down .

The card check bill was being considered at the same time as cap and trade, another abusive job killer. Fortunately these bills became sidelined as the Democrats focused their efforts on Obamacare, yet another job killer.

More recently The NLRB has held up the Boeing plant location in South Carolina, leaving 1,000 new jobs in limbo, all in the name of protecting union jobs in the state of Washington, even though there was no layoff of union workers as a result of this new plant.

Without any congressional approval the NLRB gas now issued an edict requiring all companies to post notices of the workers right to organize.  This may just seem like a harmless notification to this clueless president, but to the small businesses out there it is an outrage and it will kill job creation.

To many of us who have had experience with union attempts they too often act like liars and thugs.  For the government to make such overt attempts at cramming them down the throats of small business will just add another in a growing list of incentives to retire or close their business early, sit on their cash, and avoid any growth or new hiring.

Of all the special interests that have been decried for their destructive influence this administration’s obsession with promoting his union supporters is the most destructive.

The government has spent trillions to stimulate the economy. Interest rates are at a record low. Yet American businesses are sitting on top of trillions of dollars of cash, reluctant to spend any of it to grow or hire.  Does stimulus not work?

The theory is that recessions are caused by a decline in private consumption and that by replacing it with government consumption the machinery of production will continue to flow and jobs will be saved. By not having to pay unemployment benefits the government’s cost of the stimulus will be partially offset and taxable incomes will remain high.

This theory is credited to John Maynard Keynes during the Great Depression. Today it seems a bit odd that a lack of consumption would ever be a problem with Americans, but this was the case during the Depression for logical reasons.  When you are in a deflation goods become cheaper in the future. It pays to delay consumption.

During the inflationary years of the 1970’s consumers were incentivized to buy quickly to avoid having to pay a higher price later. Investments in financial assets, a future oriented investment, declined and investments in tangible assets soared  .

When the supply side prescription of a stable dollar and lower taxes was enacted under Reagan, inflation declined, and assets shifted from tangibles to financial propelling the substantial boom in equities that lasted twenty years.

The impact of stimulus depends on numerous other factors.  A onetime tax rebate has little long term impact.  If uncertainty reigns the stimulus will be saved rather than spent. No one will alter their consumption behavior for a onetime benefit. George W. Bush’s tax rebate of a few hundred billion in early 2008 had no impact.  It was laughably small in retrospect, at least by today’s standards.

That leaves the blind believers in stimulus economics like Paul Krugman in a no lose logical loop.  If the economy picks up it was because of the stimulus; if it lags or doesn’t respond then it was because the stimulus was too small or the wrong kind.

The “cash for clunkers” cleared off some inventory and gave some incentive for the auto manufacturers to increase production, but this is short lived if the economy is not already poised to rebound. All it will do is push consumption forward and delay consumption later, in one sense delaying the recovery.

The incentives for home buyers ended and home sales crashed by far more than the consensus estimated. In some areas home prices dropped after the program by more than the amount of the ‘stimulus’ credit. This means that the incentive had the unexpected, or at least the unwanted, effect of keeping prices higher for home buyers and delaying the ultimate recovery of the housing market.

A government spending stimulus program may have a positive effect in a small way for a short period of time if the overall confidence in the system is unchanged.  But the current administration has so shaken the confidence in the basic system that few are willing to make any long term plans or investments.

Cap and trade, health care legislation, the card check bill, and the record large deficits  themselves have most businesses in defensive mode. No one is certain what these bills will cost but they feel certain they will increase the cost of doing business.

The administration’s contempt for the rule of law leaves businesses unsure what the rules truly are.  Bankruptcy law was usurped in the takeover of GM and Chrysler. BP may not be the most likely target for empathy but by what authority does the president force a $20 billion settlement fund outside the legal system?

Political hostility towards businesses in general creates a cloud on business and investment. But the uncertainty of playing a game where the rules change every election cycle will counter any stimulus effort the administration can consider.

The simple and obvious logical flaw in taking a dollar from one person and giving it to another and considering this a stimulus remains. This is the common economic flaw of Bastiat’s broken window.  We see only where the dollar was spent and erect signs to cheer the projects built by government ‘stimulus’ money, but are blind to the spending that did not occur from the dollar taken to fund the program.

The government can facilitate growth  with a sound and stable economy and by protecting property rights, but only a fool still believes they can actually create a job. Even necessary government workers still require a sacrifice from the private sector.

The best stimulus is a sound and dependable currency, low taxes, and clear and consistent regulations. It has proven effective and successful every time it was used, throughout history and regardless of which political party applied it.

Two of my favorite economics blogs are Carpe Diem and Calafia Beach Pundit. Both are rich with information and perspectives from professional and experienced economists. For months both of these writers have highlighted numerous indicators that the economy is bottoming out and starting to improve. Traffic at ports, railroad freight activity, hotel room bookings, and other such indicators have shown improving economic activity.

Yet employment stats are not only not budging, by some recent indicators it is getting worse.  It seems obvious to me that this is because of legislation, regulations, and a Congress that seemed to have a limitless appetite for using political power to control the economy.  Businesses see no consistency in the rules they must live by and thus are sitting on tons of cash unable to find a decent return.

The Fed can drop interest rates to zero and this economy will still resist growth as long as it is staring at endless regulations and no certainty on taxes and regulations.

This is far more damaging than a tax increase. In fact if Congress could possibly pass a tax code that was guaranteed not to change for twenty years you could raise the taxes (though it is still ill advised) and still create a tremendous stimulus.

Add a guarantee that Cap and Trade and Union Card check is dead for two decades and repeal the health care bill and this economy will take off like a rocket.  Stabilize the dollar and cut spending,  starting with the prudent elimination of Fannie Mae and we would have genuine economic euphoria.

I do not pretend to speak for the other voters.  I was fortunate to be traveling during much of October so I missed most of the trash and noise masquerading as campaign information.  I truly do not care about college pranks, high school indiscretions, or even disagreements on some interpretations of constitutional intentions. I don’t care if you have made a bad loan or business decision in your life, if you were divorced, if you served in Viet Nam, what you read or what you don’t read.  I don’t care if someone in your family cured cancer, won the Nobel Prize or was convicted of rape.

I don’t care what position you played on the high school or college football team. I don’t believe any candidate hates children, the elderly, baseball, women, or poor people.  I don’t care what your religion is or isn’t, how often you go to church, or whether you teach Sunday school.

I don’t care if you smoked pot in college or got a DUI 20 years ago.

What I do care is that:

You will vote against the Union Card Check Bill.

You will vote against Cap and Trade.

You will vote to repeal the Health Care Bill.

You will vote for sane regulation rather than government micromanagement of industry and the economy.

You recognize that no group of elites understands the economy as much as all of the American consumers and producers do.

You respect the citizens who know better how to run their lives and their families than anybody in Washington.

You will think long and hard before your send Americans to die on foreign soil, or interfere in the affairs of other nations.

You recognize that we are a nation of laws; not a nation of ideologies.

It is stunning to see such a reversal in the Democrat’s fortune in the course of one year.  As the electorate sees the hopes and dreams degenerate into deficits and taxes, the administration will be inclined to spin the outcome into something other than the rejection that it is.

It is clear that the Democrats misread the mandate. But what should they have done?

Clearly the financial system needed reform. Obama could have started by addressing problems in the banking and financial system that would have clearly enjoyed bipartisan support, and would have been seen as a consensus builder.

The administration could have addressed unemployment with tax credits rather than reckless deficit spending.  But when the first program out of the box is to force unions down the throat of business, trample bankruptcy law in the case of GM, pass a hugely flawed Cap and Trade bill, and then force and even more flawed Health Care bill riddled with blatant bribes, then he has created such political uncertainty that economic remedies are effectively neutered.

But the voters’ rejection is as much about style as policy. The unmitigated partisanship, arrogance and deafness to public concerns has pissed off the electorate.

The president prefers making grand speeches to the dirty process of passing legislation. He may have promised change but what we got were old leftists exploiting a crisis to pass unpopular legislation.  His call for openness was greeted with contempt by his own party leaders.

If I were a Democrat I would place a large portion of the blame for this destructive hubris at the feet of Nancy Pelosi and Harry Reid.  The party picked two horribly divisive leaders. If the Democrats hope to save the ship they need to mutiny and get better captains.