Obama Doesn't Get Business

I caught President Obama's smoke and mirror job summit earlier today. A job summit that didn't include major players in the business community. Just the usual academics, politicians and CEO's of big corporations. Small business be damned.

Boy was I glad to snag it. It further confirmed my suspicion he has little grasp of how business works.

Essentially, Obama believes businesses are earning profits but aren't hiring. It's "embedded in their culture" as he put it - whatever that means. And what is his obsession with the word "profit?" He sounds like one of those leftist students constantly thinking in abstracts in a university class. They may be gaining "profits" but it doesn't mean the overall business has a  healthy outlook.

Here's the thing. Businesses can't hire if production is down. Their goal is to survive in a downturn. If you sink, you can't hire, right? One of the major expenditures in a business are salaries. Guess what gets cut first? People talk as if owners do this gleefully. They don't. Less workers means less productivity and this means less on the bottom line. There's nothing "embedded" in their culture. It's a matter of hard business and reality.

I can't help but wonder if he's setting up a straw man by blaming businesses who "refuse" to hire regarding the high unemployment rate. In his mind, the president honestly thought the silly stimulus would magically lead to more employment. Anyone with a modicum of business knowledge knew this wasn't going to happen.

To make matters worse, credit availibility is crucial for businesses that need to expand. Despite an injection of cash to the banks, the reverse happened - credit was tightened.

Businesses, truth be told, are squeezed in the middle. They're the zit on the politic's ugly face and now Obama wants "concrete" solutions to encourage businesses to hire. Is he that clueless?

The only way is if he threatens them with fines or jail time (it's not like this is new to him since his health care reform proposal calls for fines and jail time for people who decide to not purchase insurance). Other than that there's not much he can do.

Oh. Now there's a thought. Get out of the way!

Last, his health care plan is not helping as it's hampering the ability of a business to forecast revenues and expenses. Why? One of the keys of success is to know your cost structure. It helps you set up supply chains and make long-term deals.Naturally, businesses will prudently step off and watch how this will unfold because they have no idea how much of the cost will impact them.

Obama is not part of the solution as it stands. He's part of the problem.