US Chamber of Commerce
As I’ve mentioned many times, the engine of America is small business. Those businesses provide jobs to 85% of Americans. And according to the US Chamber of Commerce, they’re not going to be doing much if any hiring in the near future:
Small business owners’ concerns about the future—particularly on health care and taxes-—are impacting their hiring, according to the U.S. Chamber’s fifth quarterly small business survey released today.
Only one in five small businesses (20%) expect to add employees in 2013, according to the poll of 1,225 small business owners, conducted by Harris Interactive. The majority of small businesses say they are likely to keep the same number of employees over the next year – meaning there is likely to be little change in overall unemployment figures.
Concerns about health care and taxes (both brought to you by Barack Obama) are causing caution among small businesses and that’s because they perceive an “unsettled” business climate. Consequently there’s no incentive for them to change the status quo. In fact, they obviously believe there is some safety in the status quo (see the survey to see how they feel about their businesses locally) .
As we’ve mentioned repeatedly, government policy does have an effect on the economy. It can be an enabler that helps create incentives for businesses to expand and hire or it can be a disabler, doing precisely what it is doing now to unsettle the business climate, create disincentives for expansion or hiring and have small businesses go into a defensive posture.
It doesn’t get more defensive than now.
More from the Chamber survey:
- 78% want government to get out of the way.
- 90% are concerned about the impending fiscal cliff and are worried that Congress will fail to take action to prevent it.
- Nearly 60% say that expiration of the 2001 and 2003 tax rates and other business provisions, coupled with sequestration, will directly impact their business’ growth.
As you might imagine the road map to a better business climate is not hard to follow. There’s just no desire by the class warriors to do that.
Instead of doing the hard work of creating a business climate that will provide small business incentives to expand and hire, they’d rather tax them while demonizing them as the evil rich and talking about “fair shares” to 50% of the country that pay’s no – zero- income tax.
If this doesn’t paint the picture of what is wrong with the policies of this administration, I’m not sure what will. This is Econ 101 stuff. And apparently it is like a foreign language to this administration.
The golden goose is on life support, and the administration is about to pull the plug.
But let’s talk about Bain Capital, shall we?
There’s a difference between a political use of the SPR and an emergency use of the SPR. It is for the latter the SPR exits. However the Obama administration has decided to use it for political reasons.
Why do I say that? Well, 30 million barrels of oil is about a day and a half use in the US. Or said another way, this is nothing more than political busy work in an attempt to pretend like the administration is a) concerned about the price of gasoline and b) doing something about it.
But a short walk back through their history with the oil and gas industry makes the case that they’ve essentially been opposed to gas and oil exploration and have used every excuse and bureaucratic means to slow or stop it in the two plus years they’ve been calling the shots.
American Petroleum Institute president Jack Gerard sums it up nicely:
"It’s confusing as to why we would wait to this point to release part of the (SPR), but we’ve still failed to step forward and say let’s bring long-term supply to the marketplace, create American jobs at a time when we have 9.1 percent unemployment and produce millions of dollars of federal revenue at time when we’re struggling with a debt and deficit crisis. … Just yesterday the administration sent a letter to Capitol Hill opposing a permitting bill that was designed to expedite permits in Alaska to produce oil and natural gas. We are getting a confused message."
API’s Mark Green make the most important point in a succinct three sentences:
The United States could and should be taking steps to increase its own production by 2 million barrels a day or more for decades – which is possible if the government would grant much greater access to America’s ample oil and natural gas reserves.
In the long run this would do more for consumers, increase energy security, create jobs and help solve the debt and deficit crisis, to which Gerard referred, by delivering more revenue to government.
Instead of a long-term energy strategy that would help keep the strategic reserve in reserve, the administration seems to be taking action for the sake of taking action trying to cover itself while the economy keeps struggling.
Karen Harbert, president and CEO of the Chamber of Commerce’s Energy Institute adds:
The Obama Administration’s decision to release oil from the Strategic Petroleum Reserve is ill-advised and not the signal the markets need. Unrest in the Middle East is likely to continue for quite some time, so a temporary increase in supply is not a substitute for a long term fix. Our reserve is intended to address true emergencies, not politically inconvenient high prices. Rather than dabbling around the edges, the Administration should take steps to increase domestic production of oil—on and offshore, like the bill the House passed last night. With U.S. crude oil production expected to decrease by 90 million barrels in the next year, the Administration should instead focus on increasing domestic production will improve our energy security, reduce our dependence on foreign oil, and create thousands of jobs.
Note the numbers she cites. The administration is releasing 30 million barrels over the next 30 days while presiding over a total drop in production of 90 million barrels annually due to their opposition to increased domestic production.
What is being done with the SPR release is simply more smoke and mirrors from the smoke and mirrors administration. It does nothing to address the long-term need for increased domestic production, it will do nothing to address the price of gasoline (there is no supply problem at the moment) and it is a misuse of an asset that is to be used for real and dire emergencies.
But then we’ve come to expect nonsense like this from the Obama administration. Symbolism over substance. Pretending to be both concerned about consumers and engaged in helping them when in fact their real policy is to opposed the real solution – increased domestic drilling.
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