- The Washington Times - Monday, January 4, 2010


Americans must face the grim reality that President Obama’s stimulus package has not and will not create the millions of jobs promised. Yes, the Troubled Asset Relief Program money has helped stabilize the financial markets, but in the long run it won’t be enough to sustain it.

When will this administration proclaim that, only through the business community (large and small), can the economy be truly stimulated and create jobs for the long term. Industry leaders are speaking vociferously on how this administration’s economic policies are severely undermining free enterprise in America. They are hoping that the Obama administration will have an epiphany sooner rather than later — before the crisis is insurmountable.

If Mr. Obama truly wants America’s financial community to help accelerate the recovery, he should stop publicly blaming it for the recession and unemployment. Instead, he should praise it for creating the most effective financial system in the world and make it his partner in the recovery.

Currently, the president is sending the financial community mixed messages. On the one hand, he is correctly reminding our banks that the government helped stabilize the financial meltdown by bailing them out. As a result, the banks owe an extraordinary effort to help accelerate the recovery by increasing lending to small and medium-sized businesses.

On the other hand, the administration’s bank regulators are forcing the banks to tighten credit standards so they make fewer risky loans. In addition, the regulators are requiring banks to write down performing loans on their balance sheets that are collateralized with devalued property. This write-down reduces a bank’s capital and its ability to make additional loans. Therefore, it should not be a surprise that government policy is contributing to a reduction in bank lending.

The demand for bank loans by small and medium-sized businesses has also declined because of the toxic political environment in Washington. Small and medium-sized businesses are reluctant to invest borrowed money in risky projects and hire additional employees given the political overhang. This overhang includes: a probable 10 percent increase in income taxes on the wealthy and small businesses in 2011; a significant but unknown increase in health-care costs; the prospect of more unionization through card-check; an expected increase in energy costs through cap-and-trade and the president’s Copenhagen commitments; increased financial regulation; and anti-banking and -business rhetoric from both the Democrats and Congress.

Instead of using Wall Street as the whipping boy for the economy’s ills, the president should note that there is no other country in the world where capital is so easily available to small and medium-sized businesses. There is no other country where capital is so readily available to consumers for homes, cars and major appliances. Better yet, capital is readily available to put people through higher-education institutions that not only elevates their status, but also the overall competitiveness of the American labor force. This is capital that the American people can’t afford to live without.

Mr. Obama and his economic lynch squad seemingly have no mercy as they seek to punish all of those that don’t fit into some piece of their greater agenda. Unfortunately for the American people, this blame is being foisted upon venture capitalists, one of the great features of our modern economy and a major reason why the American economy is so far ahead of our competitors.

For the most part, they are known for providing funding and invaluable business savvy to companies that show high growth potential in industries such as health care and technology. Venture capital has been behind some of the great companies of our time; such as Google and Compaq. And yet, Treasury Secretary Timothy F. Geithner and his thugs want them to be regulated by the Security and Exchange Commission, which would cripple potential start-ups nationwide.

What has to be even more confusing to the American people and the banking industry is that our government has not accepted its role in this crisis. A large part of this crisis is the result of what happens when government manipulates the market in order to serve its political ends.

Fannie Mae, a pseudo-government entity, has long been a place where Democrats have put their constituents in jobs in exchange for support for their candidates. It also was the political agenda of Democrats that gave mortgages out as a form of welfare that put people in homes they couldn’t afford.

Yet with all of this, our government doesn’t want to accept what can happen when bureaucracy and agendas spill over into the market, which results in these market decisions have been polluted. Instead of letting the pollution work its way out of the system, regulators and market overseers are causing more damage by piling regulation upon regulation onto an already fragile system.

This regulation will not only increase the cost of doing business, but it will stall the development and release of new products upon the market. This extra activity is exactly what America needs in order to fuel the jobs that will put dinners on tables in homes across America. The leaders of our country shouldn’t be doing everything in their control to stifle economic growth in a moment when the people of our country need it stimulated most.

If the president truly wants to accelerate the economic recovery, he should ask the bankers on Wall Street to be his partner in the economic recovery. As part of this partnership he should ask them, not tell them, what they should do to accelerate economic recovery.

The banks and Wall Street have a good, if not perfect, track record of financing America’s business and creating jobs. I am unaware of the president’s track record on job creation. Personally, I would rather trust the judgment of experienced job creators than that of the untested. If Wall Street is the president’s partner in the recovery, he may be surprised at how quickly the economy recovers.

“The Armstrong Williams Show” is broadcast on XM Satellite’s Power 169 channel from 9 p.m. to 10 p.m. weeknights.

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