I asked a businessman two weeks ago why he said that he was neither hiring nor buying new equipment. He started in on “rising taxes.”
“But wait,” I interrupted. I pointed out that income-tax hikes haven’t taken effect. The old FICA income caps are also still applicable. Health-care surcharges haven’t hit us yet.
He countered with “regulations” and “bailouts.” I said, “Come on, get specific.” He offered up “cap and trade” and “the Chrysler creditors.” I parried with more demands that he tell me exactly how the federal government has suddenly curbed his profit margins, or how his electric bill had gone up since January 2009, or whether he had lost money on any investment because the government had violated a contract.
Exasperated, he talked now instead of more cosmic issues — the astronomical borrowing, the staggering national debt, and the new protectionism. I pressed again, “But aren’t interest rates historically low? Inflation is almost non-existent, isn’t it? New products are still comparatively cheap? Rents and new business property are at bargain-basement prices?”
This give-and-take went on for ten minutes; but you get the picture. Private enterprise is wary, hesitant, even frightened, but nevertheless hard pressed to demonstrate in concrete fashion how Obama has quite ruined them in just 18 months.
So why are a lot of cash-solvent financial firms, banks, and manufacturing companies not hiring, not expanding, and not buying new operating equipment as they did in past bottoming-out recessions?
In a word, fear. Remember that capitalism is in large part psychologically driven. Confidence, optimism, and a sense of calm about the future foster risk and investment, while worry, pessimism, and a sense of foreboding ensure timidity and stasis.
Barack Obama — who is mostly a creature of the university and the dependable government payroll — does not seem to grasp that fact.
Hanson goes on to say that Obama has created a climate of fear through the hiring of appointees -- like Van Jones -- with radical pasts, or through insufficient worship of free markets. But if there really is a climate of fear in the business community, who really has created it?
Conservatives, that's who.
They've devoted considerable time and resources to proclaiming the Obama Administration an era of "socialism" and "tyranny" -- even though, as Hanson admits, the actual rules and taxes on business right now should be encouraging growth and expansion. The country has been force-fed a diet of Glenn Beck and Tea Parties over the last 18 months, all of them making the case against Democratic policies in the most dire terms possible. Is it any wonder that some people actually take it seriously?
I don't think Victor Davis Hanson or other conservatives should refrain from criticizing Obama in order to revive the economy. But I do think a constant stream of hyperbole can have consequences. Hanson's column, though, shows how Republicans all-too-easily win: They get to create a climate of fear -- and blame it on the victim. It's cynical stuff, and in this case -- if Hanson is to be believed -- it has demonstrable harm.