In a Financial Times editorial, former Federal Reserve Chairman Alan Greenspan bluntly states the reason for the current economic slump here in the US:
It is going to take years to address the unprecedented complexity of final rulemaking required in the massive Dodd-Frank bill. The inevitable uncertainty engendered will inhibit financial innovation and intermediation, and render the rules that will govern a future financial marketplace disturbingly conjectural. This is bound to have a significant impact on economic growth. Business planners must now confront a much wider set of scenarios that could affect the profitability of contemplated long-term commitments.
As you may recall, the Dodd-Frank bill ended up being a 2,319 page monstrosity that no one actually read and few even partially understood. (In contrast, 2002’s Sarbanes-Oxley financial reform bill was only 66 pages long.) And when you add in the 2000+ pages of ObamaCare, next year businesses will face literally hundreds of new rules and regulations, with additional guidelines, clarifications, and new rules being added yearly until at least 2014.
The most odious of these regulations are the new ObamaCare rules governing 1099 forms filed by businesses. Beginning in 2012, all businesses will be required to file a Federal 1099 form every time it purchases more than $600 worth of product from another company. This would include fuel, office supplies, meals, travel expenses, vehicle maintenance — you name it. Imagine having to track thousands of receipts and keep records on the parent corporations that own every gas station and restaurant you or your employees patronize. Can you think of a better way to force businesses to reduce or severely restrict their spending? How is this going to help the economy?
Some Democrats realized the error of their ways, but Speaker Pelosi deliberately forced the failure of a vote to repeal the measure. The Wall Street Journal explains:
Most Democrats now claim they were blindsided and didn’t understand the implications of the 1099 provision–which is typical of the slapdash, destructive way the bill was written and passed. As the critics claimed, most Members had no idea what they were voting on. Some 239 House Democrats voted to dump the 1099 provision in August, and the repeal would have passed except Speaker Pelosi rigged the vote procedurally so it needed a two-thirds majority. She thus gave Democrats the cover of a repeal vote without actually repealing it.
As Greenspan explains in his editorial (warning: lots of “financialese”) businesses are hanging onto an unusually large amount of liquid assets (cash) and investing a historically low percentage of revenue in higher-risk long-term illiquid assets (durable goods, labor). Consumers are also worried about the massive income tax hikes that could hit starting January 1, 2011, so they have begun to significantly decrease their spending. Businesses responded by cutting another 39,000 jobs in September.
And the Democrat response? Blame Bush, blame Bush some more, and if that doesn’t work, keep blaming Bush. It’s no wonder that Newt Gingrich has dubbed the Democrats “the party of food stamps” — there are now over 40 million Americans receiving food stamps, and nothing in the way of ideas from the Democrats except for more pork-barrel “stimulus,” trillion-dollar deficits year after year, “comprehensive immigration reform” (read: amnesty), and Cap and Trade, which will send energy prices through the roof.
We can stop the march toward the Democrats’ vision of a European-style socialist government here in America — and the inevitability of astronomical tax rates, permanently high unemployment, unsustainable welfare roles, sluggish economic growth, and crushing national debt — by voting Republican on November 2.
We can stop the socialism. We can stop the fear.