Katherine Kersten: Obama & Co. are obstacle to recovery

This Labor Day weekend, work is in short supply. Unemployment is almost 10 percent, and higher when you include those who have given up seeking work. The economy grew at a snail-paced 1.6 percent in the second quarter of 2010. Many economists fear that third-quarter growth will actually be negative.

President Obama assures us that he and Congress have been working overtime to get Americans out of this hole. He points to his nearly trillion-dollar stimulus -- which, astonishingly, exceeded the cost of the entire Iraq war, according to the Congressional Budget Office. He points to costly bailouts, to loan guarantees, to "cash for clunkers" and to his $8,000 tax credit for housing. But this avalanche of taxpayer money -- and the staggering national debt it's producing -- weren't enough, it seems. What now? Obama tells us we may need another stimulus.

As the Wall Street Journal put it last week: "Never before has government tried to do so much and achieved so little."

Americans know that the Obama/Pelosi plan to create jobs by expanding government isn't working. In fact, they believe -- increasingly -- that Obama's tactics are actually killing jobs. At the Technology Policy Institute's recent Aspen Forum, Intel CEO Paul Otellini issued a clarion call to face the economic facts that Team Obama is ignoring.

America is at a turning point, Otellini warned. Unless government policies change, he predicted, "the next big thing will not be invented here. Jobs will not be created here. And wealth will not accrue here." Our nation's legal and political environment is now so hostile to business, he said, that we can expect "an inevitable erosion and shift of wealth -- much like we're seeing today in Europe. This is the bitter truth."

America's combined state and federal corporate income tax rate -- at about 38 percent -- is the second highest in the industrial world, said Otellini. (The industrialized-nation average is 18.2 percent.) "It is precisely these high statutory corporate rates that punish the most dynamic and innovative firms and hinder their ability to compete globally," he said. Congress has compounded the problem by repeatedly failing to make an R&D tax credit permanent.

"I can tell you definitively that it costs $1 billion more per factory [out of $4 billion] for me to build, equip and operate a semiconductor manufacturing facility in the United States," Otellini said. "Ninety percent of the cost difference" is the result of tax and incentive policies. "With such policies," he asked, "are we surprised that companies are investing overseas?"

No one knows how the blizzard of new --and potential -- laws and regulations will affect the future costs of hiring and doing business. The resulting uncertainty has paralyzed the economy.

Obamacare is already killing jobs, though it does not go into effect fully until 2014. For example, Assurant Health recently laid off 130 workers at its offices in Milwaukee and in the Twin Cities suburb of Plymouth to prepare for the new law's costly mandates. Small-business owners fear adding workers -- in part because of Obamacare's red tape, which includes a requirement to file an IRS 1099 form for every vendor from whom they buy $600 or more in goods. All this before the regulations that spell out Obamacare's details are even written.

The Dodd/Frank financial regulation law is another unknown. It requires "no fewer than 243 new formal rule-makings by 11 different federal agencies," according to the Wall Street Journal. Their content is anyone's guess.

On taxes, confusion reigns. Will the Bush tax cuts be allowed to expire at the end of this year? If so, we will face the largest tax rise in at least 16 years. Will Congress raise the payroll tax? Pass a value-added tax? No one knows.

Obama seems oblivious to the havoc he and his allies in Congress are wreaking. The president has staffed his administration with ideologues who are big on academic theories but woefully short of real-world experience. Few have ever operated a business, or have made a payroll, or have been held accountable for the real-world consequences of their actions.