Obama Administration A Fifth Column Destroying American Competitiveness From Within

Obama has a plan to make American business as competitive in the world economy as the proverbial Dodo bird for the sake of “economic justice.”

Obama Tells American Businesses to Drop Dead: Kevin Hassett

June 8 (Bloomberg) — I’ve finally figured out the Obama economic strategy. President Barack Obama and his team have been having so much fun wielding dictatorial power while rescuing “failed” firms, that they have developed a scheme to gain the same power over every business. The plan is to enact policies that are so anticompetitive that every firm needs a bailout.

Once that happens, their new pay czar Kenneth Feinberg can set the wage for everybody and Rahm Emanuel can stack the boards of all of our companies with his political cronies.

I know, it sounds like an exaggeration. But look at it this way. If there were a power ranking of U.S. companies, like the ones compiled by football writers for National Football League teams, Microsoft would surely be first or second to Google. But last week, Microsoft Chief Executive Officer Steve Ballmer came to Washington to announce what Microsoft would do if Obama’s multinational tax policy is enacted.

“It makes U.S. jobs more expensive,” Ballmer said, “We’re better off taking lots of people and moving them out of the U.S.” If Microsoft, perhaps our most competitive company, has to abandon the U.S. in order to continue to thrive, who exactly is going to stay?

At issue is Obama’s policy to end the deferral of multinational taxation.

The U.S. now has about the highest combined corporate tax rate, second only to Japan among industrialized countries. That rate is so high that U.S. firms have an enormous disadvantage versus competitors. The average corporate tax rate for the major developed countries in the Organization for Economic Cooperation and Development in 2008 was about 27 percent, more than 10 percentage points lower than the U.S. rate.

Tax Burden

U.S. firms have nonetheless prospered because our tax code allows a business to set up a subsidiary in a low-tax country. When that subsidiary earns profits, they are taxed at the rate of that country, and don’t face U.S. tax until the money is mailed home.

The economically illiterate partisan Democratic view is that this practice is unpatriotic and bleeds jobs from the U.S. The economic reality is that American companies use this approach to acquire market share overseas. The alternative is losing the business to foreign competitors.

Don’t just take my word for it. A recent paper by Harvard economists Mihir Desai and C. Fritz Foley and Berkeley economist James Hines and published in the distinguished American Economic Review, gathered data on American multinationals to explore the impact of foreign investments on domestic U.S. activity.

Encourage Overseas Sales

Their conclusion was striking. The authors found that “10 percent greater foreign capital investment is associated with 2.2 percent greater domestic investment, and that 10 percent greater foreign employee compensation is associated with 4 percent greater domestic employee compensation. Changes in foreign and domestic sales, assets, and numbers of employees are likewise positively associated; the evidence also indicates that greater foreign investment is associated with additional domestic exports and R&D spending.”

So when firms expand their operations abroad, taking advantage of the lower foreign tax rates, it helps their workers in the U.S. Higher sales abroad (surprise, surprise) are good for domestic workers.

It is worth noting that this study, which is confirmed by a boatload of evidence elsewhere, was coauthored by the same James Hines who recently wrote a sweeping review of international tax policy with Obama’s top economist, Larry Summers. Summers has to know what the literature says.

Inexplicable Stance

So the question is, why does Obama advocate a policy that so flies in the face of everything that economists have learned? How could Obama possibly say, as he did last month, that he wants “to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens?” Further, how could Treasury Secretary Tim Geithner call a practice that top scholarship has shown increases wages and employment in the U.S. “indefensible?”

I have to admit I am at a loss. Maybe it is good politics to bash American corporations, and Obama isn’t really serious about making this change happen. But if the change is enacted, and domestic corporate taxes aren’t reduced to offset the big tax hike, the result will be a flight from the U.S. that rivals in scale the greatest avian arctic migrations.

If that occurs, the firms that stay in the U.S. will be at such a huge tax disadvantage that they will absolutely need a “rescue.”

(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He was an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.)

Is the destruction of America deliberate?

It’s certainly possible.

Another possibility is that Barack Obama and Timothy Geithner have never actually had to make a payroll, or run an actual business.  It’s all just monopoly money for these guys.  They live in a world of theory, and their theories are all crap.

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4 Responses to “Obama Administration A Fifth Column Destroying American Competitiveness From Within”

  1. zeroKnots Says:

    “I know, it sounds like an exaggeration”
    Quite the opposite, I don’t think Kevin goes far ENOUGH! :)

    Neither does Rush Limbaugh, nor Mark Levin, or Hannity, Roger Hedgecock etc. In fact I don’t rule them out as passifiers, getting us all to laugh this devastation off as if it’s completely normal. Bucause that’s the unfortunate effect when we COULD be fighting back with or without sellout representatives.
    Simply shut down our consent to be governed. Shut the money off cold.
    The stockmarket would rocket up to record heights at the mere notion of a tax-free economy.

    Obama is NOT stupid. It doesn’t take a genius to understand the Laffer Curve, but he doesn’t just ignore ity, he DEFIES it!

    But all the talk shows presume that unfathomable stupidity is the only reasonable explanation. Absurd! NO ONE is so stupid as to replicate the Great Depression to the letter!

    As long as youve broken the conspiracy ice, I’ll go further. Achmadenijad antagonized his people to the point of revolt. He insulted their intelligence with that mock election deliberately, shot a few of them and the rest now know how to be ruled. He has carte blanche beyond even what he had.

    What POSSIBLE reason could Obama have to hide his birth certificate but to antagonize patriots? (patriots being dissenters in Obama’s book).

    Everything I watch him do falls into deliberate antagonizm. Even the media has fallen into it by his design. Sotamayor was chosen precisely because she has no concept of “blind justice”, the cornerstone of jurisprudence.

    His FIRST act was to export abortion. A purely personal and internal quagmire.
    He didn’t author the bill, but he reenstated it in order to “God damn America” on schedule.

    Bleeding jobs to China in particular.. no accident. Shutting down coal and Nuke power was designed to starve us. Turning IPCC loose here was sabotage planned years ago when the anti-Bush propaganda campaign started as a mere springboard into Obama “change”.

    Borrowing our way into debt w/ China to the point of making us tenants.
    Flooding a market with perfect counterfeits is what’s done to ENEMIES.

    Maybe the libiot left are stupid enough to think this is business as usual Chicago racketeering and power-grabbing, but Obama means to utterly destroy the U.S. as does every militant Islamist.
    They’ll say “that’s enough Obama, we own them now” but he’ll keep sabotaging.

    I plan to send them a “Declaration of Individual Independence” as can can’t in good conscience pledge allegiance to this unconstitutional ‘Republic’. The more of us simply withdraw, the more peaceful the revolution.
    If wrong? If I’m a nut-job? Where the harm in a wake up call to the feds?
    It’s about time either way!

    “Hey Obama. Here, look through these binoculars, big guy. See that hopscotch court just past the 78 football fields?
    That`s our Constitution. The one you guys are supposed to be playing inside.
    Step outside again and we cut the money off again that same day.”

    I appreciate the article, thank you.

    -Mark

  2. Michael Eden Says:

    Mark,
    And I appreciate your extremely insightful comment. If you haven’t read the book by another Mark – Mark Levin, Liberty and Tyranny – I suggest you do so. He too defends the view that what liberals are doing now is not “accidentally stupid.” It is part of the mindset that is willing to trade prosperity for massive government control. John Holdren, the new “science czar,” wrote in a book that massive forced abortion, massive imposed sterilization without the people’s consent, might be in order (see here). So realize: the Obama liberal mindset is willing to gut the economy and even result in massive die-off in order to reshape American society into his version of utopia.

    That’s what the Cloward-Piven strategy called for (written by leftist professors and CALLING for a deliberate destruction of our society in order to use the emergency to create a new order.

  3. John K Thompson Says:

    How in God’s name is he getting away with distroying our once great and proud Country?? Is there no stopping him?? Where are the C.I.A and F.B.I in all this?? Why was he not properly ‘vetted’ in the first place?? He was’nt even born on American soil!! Is this really the end of The United States Of America??

  4. Michael Eden Says:

    I am watching the movie ’300′ as I write.

    You see a powerful society on the verge of annihilation due to an unholy religious system and due to political intrigue from within. And a noble king – Leonidas – recognizing what needed to be done, risked himself to save his society.

    With Obama, it is different. Because Obama IS and REPRESENTS the betraying elements that are undermining our society.

    In this time, we were betrayed by our national dependence upon “media,” “news,” and “journalism” that have been every bit as ideological and propagandistic as Joseph Goebbels and the Nazi propaganda machine. And we were betrayed by a government-unionized apparatus that has become an elite in its regard to its selfish demand that the people serve THEM, rather than the other way around.

    If we survive this travesty under Obama, we must reveal the media for the dishonest fraud that they are. We must put an end to the unionized government apparatus that seeks its own interest rather than the interest of the American people. That is to say, we must put an end to our ruling class, and return to the idea that free men rule themselves. Just take a look at the benefits that government employees give to themselves to see the need that this be done!

    Let us hope that there are a remnant of Americans who can stand against the destructive cultural wreckage of liberalism as the Spartans who stood at the Battle of Thermopylae.

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