The Double Dip Has Arrived

[we vs us]

You guys make way too much of "ObamaCare". Really? Business is so scared of health care costs that they retract from their mission of serving the public at a profit for their stockholders...who are the public? Weird business. Short sighted business. Maybe things have changed that much. I doubt it. Businesses simply don't hoard their capital from fear of rising costs. At least not for long. They may pass them on, they may adjust their structures, but well run businesses don't sit on their capital.

This this this.  Very good.  ObamaCare may engender some fear and uncertainty (much of it ginned up), but there're plenty of other HUGE problems with our economy, including lack of demand and crushing unemployment.  People aren't buying because people aren't employed, and companies aren't hiring because people aren't buying. It's the classic recessionary spiral. Add to the mix that people and businesses are still deleveraging their credit burden (another demand killer) and a low-to-medium boil Eurozone panic -- and that would be enough right there to stultify growth.

AquaMan is also right, re: Obamacare:  companies will do what they've always done with these ancillary employment costs (if there really are many) -- they will just pass them along to either the employee or into the price of their services/goods or both.  No way will the companies themselves volunteer to eat much of an outsize raise in fees.  For proof I offer you way business has been dealing to-date (over a decade now?)with healthcare cost increases which regularly outpace inflation by double digits:  they lower benefits and raise prices. Ta-da!

Also:  I really do believe that given the round of cutting we've just seen with the debt ceiling, the Tea Party folks can now count on holding up all fiscal measures -- budgets, appropriations, etc -- until further pounds of flesh are extracted.  This austerity thing isn't over by a long shot, and especially because Obama and the Dems (and mostly Obama) caved so completely, the rounds of cutting will continue unabated for years to come without any moral imperative to stop.

[Gaspar]

So when the government pays agri-business to not produce in order to manage the industry's natural greed. . .

So greed is the liberal term for when a businesses strives to be more profitable, more efficient, and less expensive.

Got it!

. . .and you can mitigate greed by giving away money?  You can pay people to be less greedy? 

Does anyone else find this to be about the most hilarious thing they have ever read?

Perhaps the federal government should pay Wall Street Bankers to be less greedy?

Lets send the oil industry several trillion dollars not to drill.   This would solve our perceived global warming problems.

Heck! I'll promise not to rob any banks, sell drugs, or kill anyone if the government sends me bags of cash every month.

Purchasing behavior is the stupidest surrender our government engages in, and it is unfair to the tax payer who becomes a slave to whatever industry is being paid not to labor.

[AquaMan]

Obama did cave and I have to think he either doesn't care for the job, was overcome by Congressional lifers, or realizes that their success is their undoing and time is on his side. The resulting loss of public service jobs, the loss of Tea Partier's very own dearly held government benefits, the loss of security that depression era politicians provided us eroding before there very eyes will not feed the economy. It will rob confidence that we know how to do anything correctly and are beholden to religion and corporatism.

How do Republicans put up a candidate for office in 2012 who championed blood letting and bullied a country into submission to minority interests? All he has to say is, "I'm not like them".

[carltonplace]

So greed is the liberal term for when a businesses strives to be more profitable, more efficient, and less expensive.

Got it!

. . .and you can mitigate greed by giving away money?  You can pay people to be less greedy? 

Does anyone else find this to be about the most hilarious thing they have ever read?

Perhaps the federal government should pay Wall Street Bankers to be less greedy?

Lets send the oil industry several trillion dollars not to drill.   This would solve our perceived global warming problems.

Heck! I'll promise not to rob any banks, sell drugs, or kill anyone if the government sends me bags of cash every month.

Purchasing behavior is the stupidest surrender our government engages in, and it is unfair to the tax payer who becomes a slave to whatever industry is being paid not to labor.

You missed the anecdote completely:
Paying mom's disability not to work = bad
Paying the farmer not to plant crops = good
Subsidizing a college education = bad
Subsidizing an oil company = good

[AquaMan]

So greed is the liberal term for when a businesses strives to be more profitable, more efficient, and less expensive.

Got it!

. . .and you can mitigate greed by giving away money?  You can pay people to be less greedy? 

Does anyone else find this to be about the most hilarious thing they have ever read?

Perhaps the federal government should pay Wall Street Bankers to be less greedy?

Lets send the oil industry several trillion dollars not to drill.   This would solve our perceived global warming problems.

Heck! I'll promise not to rob any banks, sell drugs, or kill anyone if the government sends me bags of cash every month.

Purchasing behavior is the stupidest surrender our government engages in, and it is unfair to the tax payer who becomes a slave to whatever industry is being paid not to labor.

Can't be as hilarious as your sophomoric understanding of economic history and simple posts. I didn't realize the depth of your pathology.

Greed in business is neither good or bad, it simply exists. Just like nature. It can however, be manipulated for the public good and for the industry's own good. Without some bigger picture entity (sometimes industrial associations, sometimes governments, sometimes both) everyone gets totally screwed. If you don't understand that, any further conversation is waste.

And yes dear boy, we do pay people and businesses using tax codes, grants, preferable financing terms etc. to accomplish this manipulation. Because greed is part of nature. Poor taxpayers. They would have it so good if it were just like the Gilded Era when unmanaged greed created Vanderbilts and Rockefellers while everyone else worked for them.

[Conan71]

Steve Wynn's rant on the Obama Administration being a "wet blanket" on business is right on target and addresses the frustration and fear a lot of business leaders are facing, as well as consumers.  If I were afraid I could lose my job, I sure as hell wouldn't be out spending money like a plundering viking out in Vegas right now.

A lack of confidence, not a lack of money is creating slack demand.

"I believe in Las Vegas. I think its best days are ahead of it. But I'm afraid to do anything in the current political environment in the United States. You watch television and see what's going on, on this debt ceiling issue. And what I consider to be a total lack of leadership from the President and nothing's going to get fixed until the President himself steps up and wrangles both parties in Congress....

...And I'm saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems -- that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration. And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America. You bet. And until we change the tempo and the conversation from Washington, it's not going to change. And those of us who have business opportunities and the capital to do it are going to sit in fear of the President.

And a lot of people don't want to say that. They'll say, "Oh God, don't be attacking Obama." Well, this is Obama's deal, and it's Obama that's responsible for this fear in America. The guy keeps making speeches about redistribution, and maybe we ought to do something to businesses that don't invest or holding too much money. We haven't heard that kind of talk except from pure socialists. Everybody's afraid of the government, and there's no need to soft peddling it, it's the truth. It is the truth. And that's true of Democratic businessman and Republican businessman, and I am a Democratic businessman and I support Harry Reid. I support Democrats and Republicans. And I'm telling you that the business community in this company is frightened to death of the weird political philosophy of the President of the United States. And until he's gone, everybody's going to be sitting on their thumbs."

http://www.salon.com/technology/how_the_world_works/2011/07/20/steve_wynn_anti_obama_rant/index.html

Just curious how many jobs Andrew Leonard (the article's snarky author) has ever created?

[we vs us]

Steve Wynn's rant on the Obama Administration being a "wet blanket" on business is right on target and addresses the frustration and fear a lot of business leaders are facing, as well as consumers.  If I were afraid I could lose my job, I sure as hell wouldn't be out spending money like a plundering viking out in Vegas right now.

A lack of confidence, not a lack of money is creating slack demand.

"I believe in Las Vegas. I think its best days are ahead of it. But I'm afraid to do anything in the current political environment in the United States. You watch television and see what's going on, on this debt ceiling issue. And what I consider to be a total lack of leadership from the President and nothing's going to get fixed until the President himself steps up and wrangles both parties in Congress....

...And I'm saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems -- that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration. And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America. You bet. And until we change the tempo and the conversation from Washington, it's not going to change. And those of us who have business opportunities and the capital to do it are going to sit in fear of the President.

And a lot of people don't want to say that. They'll say, "Oh God, don't be attacking Obama." Well, this is Obama's deal, and it's Obama that's responsible for this fear in America. The guy keeps making speeches about redistribution, and maybe we ought to do something to businesses that don't invest or holding too much money. We haven't heard that kind of talk except from pure socialists. Everybody's afraid of the government, and there's no need to soft peddling it, it's the truth. It is the truth. And that's true of Democratic businessman and Republican businessman, and I am a Democratic businessman and I support Harry Reid. I support Democrats and Republicans. And I'm telling you that the business community in this company is frightened to death of the weird political philosophy of the President of the United States. And until he's gone, everybody's going to be sitting on their thumbs."

http://www.salon.com/technology/how_the_world_works/2011/07/20/steve_wynn_anti_obama_rant/index.html

Just curious how many jobs Andrew Leonard (the article's snarky author) has ever created?

Here's where I tell you Steve Wynn's an idiot. 

Steve Wynn's an idiot. 

He can believe what he wants but he's crazy if he thinks the way the entire economy has tanked is solely Obama's fault.  It's really that simple.  There's nothing in that rant that is substantive.  There's no why or wherefore, just a whole bunch of frustration.  I would be more inclined to it if it had an ounce of criticism that didn't mirror the stuff being churned out by the Heritage Foundation, TNR, Hannity, et al, ad infinitum.  He is furious about talking points, not about actual things, and this is why I find it impossible to believe. 

What regulations?  What new taxes? What attitude towards business?  I understand the panicky feeling that he's talking about but simply can't line it up with the extended tax cuts, the toothless financial reform bills, the gentle ramp up of RomneyCare, the truncated and right-leaning stimulus bill, the appointment of insiders and Clinton administration flacks to all the top spots in the land.  Obama's recent arc is of newbie to patsy, and to listen to Steve Wynn spew all of this Hannityesque bullcrap all over Marketwatch is to strain credulity.  I have no idea if Steve Wynn is a good CEO, a bad CEO, or just a drooling ignoramus, but I can tell you he's describing business conditions that don't exist outside of a specific spin apparatus. 

I will say this, though:  if the upper echelon of American business gets its market intelligence from the right wing echo chamber, we're much more screwed than I thought we were. 

[Conan71]

I wouldn't call someone who employs 16,400 people an idiot when it comes to a discussion of what is keeping them from investing or hiring.  I'd submit his business acumen is far greater than yours and you are letting your own talking points get in the way of paying attention to what people who actually create jobs have to say about this administration's total lack of understanding of how to create confidence in the economy.

Wynn isn't blaming Obama for the economy tanking.  He's blaming him for the continued malaise.  If you think CEO's are taking talking points from Heritage Foundation and Sean Hannity, I've got a bridge I'd like to sell you.  Corporate CEO's and small business owners alike are the ones who need to be convinced there is a positive business environment out there.  Steve Wynn didn't become a billionaire by listening to pundits, he became wealthy by investing, hiring, and investing some more. 

When someone like Steve Wynn or Jeffrey Immelt says what would help business grow, government and it's leaders need to listen.  Not the other way around if they really want to see the economy turn around.

[Gaspar]

If Steve Wynn is an idiot, than I know a lot of very successful idiots that have voiced the exact same concerns.  Many of them Democrats, just like Steve.

There is a whole new industry of consultants and tax attorneys that are hosting seminars across the country to help business owners grasp the impact the legislation will have on their industry.  I have several clients who have attended some of the seminars along with their HR groups. 

The resonating verdict is that they are exploring options to either keeping their workforce under 50 or finding ways to trade labor for technology.

I haven't heard a single person say a single positive thing about how this is going to affect their business, and most still don't have a complete grasp on how the 2,000 pages of regulations will affect them.

[we vs us]

I'm sorry.  Steve Wynn is still an idiot.  He could employee half of Vegas and I'd still think he's an idiot.  You're right when you say he's blaming the continuing malaise on Obama rather than the initial plunge, but it still doesn't make the rant any more worthwhile.  I'm in the same industry and follow trends very closely.  The Administration hasn't proposed anything that I'm aware of that would be a threat to the Wynn empire.  Food safety?  New unions and/or Checkcard? (ha!) Tighter OSHA or immigration rules?  More stringent building codes? Higher minimum wage? None of these has come to pass. The Administration hasn't even decided to regulate the investments that Wynn undoubtedly relies on to fund his casinos.  Las Vegas real estate has tanked and so has tourism but that's hardly the President's fault.  He criticized Vegas once when he first came into office but has since been very circumspect about how he talks about industry.  Regardless of who Steve Wynn is or does, the things he's talking about are talking points and do not reflect reality.  Where am I to understand he found these ideas?  Under a rock?  Or listening to Kudlow on CNBC?

Also:  so I'm an English major/actor/gaddabout who hasn't owned his own business and spent a good decade of my 20's in the dissolute pursuit of the arts.  I've got very little business acumen (though I look good in a tie).  But from what I understand you create a job like this:  you judge the market and whether you can make more money with another person (or 10) onboard than with not.  You decide to hire accordingly if you judge the risk to be worth it.  Did I get that right? Isn't that about the extent of the magic?  If so, when can I run for President?

You criticize the President for not understanding this mechanism but what's to understand?  It's straightforward:  you expand if you can afford it and the demand is there.  You don't if it isn't or you can't.  Right now businesses can definitely afford it, but the demand isn't there.  That's pretty much it in a nutshell.

[Conan71]

Gaspar, it's pretty much futile anyhow.  Confronted with reality, liberals just create a different version or entire new reality to suit them.

[we vs us]

Gaspar, it's pretty much futile anyhow.  Confronted with reality, liberals just create a different version or entire new reality to suit them.

Cop out.

[Gaspar]

Gaspar, it's pretty much futile anyhow.  Confronted with reality, liberals just create a different version or entire new reality to suit them.

. . .but it never suits them.  It makes them more angry and more liberal. 

It makes them turn from serving their causes, to straight class warfare.

[Conan71]

Also:  so I'm an English major/actor/gaddabout who hasn't owned his own business and spent a good decade of my 20's in the dissolute pursuit of the arts.  I've got very little business acumen (though I look good in a tie).  But from what I understand you create a job like this:  you judge the market and whether you can make more money with another person (or 10) onboard than with not.  You decide to hire accordingly if you judge the risk to be worth it.  Did I get that right? Isn't that about the extent of the magic?  If so, when can I run for President?

You criticize the President for not understanding this mechanism but what's to understand?  It's straightforward:  you expand if you can afford it and the demand is there.  You don't if it isn't or you can't.  Right now businesses can definitely afford it, but the demand isn't there.  That's pretty much it in a nutshell.

You keep missing the most key point in all this and the crux of Wynn's problem:

CONFIDENCE!!!!

President Obama doesn't realize that when he panders to more liberal interests and the lower income brackets Democrats depend heavily on for votes that he's going to soak the rich or re-distribute wealth, that shows a hostility toward business and the wealthy.

When you create a very, very complex piece of legislation that hardly anyone can explain all the details ("Let's pass this bill so we can see what's in it!") but it will have an effect on every single person you presently employ or plan to hire, it's seen as hostility and a disincentive.

Business owner's perceptions trump economic theory every single day of the week, that's what makes the economy work.

Lower demand has little to do with the jobs picture right now.  There are larger mitigating factors like exporting of jobs to countries where there are fewer barriers or penalties.  Anecdotally, I've been told Cisco opened an office in Ireland which employs 10,000 workers because the corporate tax rate is much lower.  Companies have also learned to improve productivity with fewer people.  Overall, GDP doesn't seem to be struggling all that bad.  A true lack of demand in the economy would be indicated by a consistently shrinking GDP.

Here's another explanation from Cisco on taxes and global competitiveness.  Of course these are all just Tea Ba**ing talking points so ignore at your own risk.

"As the world leader in networking technology that transforms how people connect, communicate and collaborate, Cisco is proud of the role we have played in creating opportunity and economic growth throughout the world.

However, here in the U.S. we are facing unique and daunting challenges that jeopardize our position as an economic leader.  We need to get Americans back to work, boost investment in the United States, increase our global competitiveness and inject certainty into our economy.

While there are many contributing factors to the challenges we face as a Nation, one area we need to address is modernizing the U.S. corporate tax system.  The last time the corporate tax code was modernized was in 1986, the same year a little start-up called Microsoft went public.  Think about how much the world has changed since then.  Our antiquated and overly complicated tax system is broken.  And it is putting American workers and businesses at a severe competitive disadvantage.  Our policies must reflect the new realities of the global marketplace

First, the U.S. has the one of the highest corporate tax rates in the world.  Our global competitors are subject to significantly lower tax rates, which give them more flexibility to invest and operate their businesses.  This comes at time when we are seeing global competition like never before.  On one side, emerging new competitors are aggressive and driving change with a low-cost and highly-skilled labor force.  On the other side, developed nations have a huge focus on exports and job creation, and a competitive tax system that supports their goals. Several of these countries – such as Germany, Japan and Canada – are lowering their corporate tax to address exactly these issues.

Second, it's no surprise that many companies such as Cisco are growing outside of the United States. That is where the world is seeing the fastest growth. In fact, 50% of Cisco's sales are outside the U.S.  This is the reality of doing business in a global economy – we sell in Mexico, we sell in Germany, we sell in China – and we pay taxes locally on those earnings. However if we decide to bring the foreign earnings back to the United States, we are taxed again by our government at a remarkably high rate.  Many of our global competitors do not face this same double taxation.  And the demand for technology overseas will keep growing substantially beyond our borders – in fact, IDC estimates that 71% of total information and communications technology spending will be outside the United States by 2014. That is only three years from now.

Together, these tax policies hinder investment in the U.S. and prevent American companies from growing stronger at home.  Ultimately, they negatively impact our economic growth and our competitiveness as a nation.  Unfortunately, despite political support from both sides of the aisle, long-term, comprehensive reform could take years to enact.  The U.S. economy and our workers cannot afford to wait.  We need action now to promote investment in the economy and create jobs."

http://blogs.cisco.com/news/the-corporate-tax-reform-imperative/

[we vs us]

President Obama doesn't realize that when he panders to more liberal interests and the lower income brackets Democrats depend heavily on for votes that he's going to soak the rich or re-distribute wealth, that shows a hostility toward business and the wealthy.

And this is exactly what I'm talking about.  Obama hasn't pandered to anyone even vaguely left of the spectrum since he was elected.  His legislation -- even RomneyCare -- has been very solidly center-right, stuff that Bush I would be proud to call his own.  Which is why I look at Steve Wynn's vomitorium + conference call as nothing but unrealistic talking points.  Steve-o has been steeping so long in the Fox Business Channel spin that he believes the same lie that's been pushed from the git-go, which is a variant of Obama = Socialist = baaaaaad for business. 

If business confidence is shaky based on how left Obama's been -- when in reality and by any historical measure he's been center-right -- there's a major disconnect between what business thinks now and what it used to think.  Then business itself has been pushed through the ole' Overton Window.