by Rob Schwarzwalder
March 26, 2010
According to Reuters, White House Secretary Robert Gibbs is unconcerned with the reports today by two leading American manufacturers that the newly enacted Democratic health system legislation will hit them hard financially.
John Deere and Caterpillar report a combined anticipated earnings loss of $250 million given the new tax provisions of President Obama’s just-imposed regime of federal health care management. This will affect their ability to hire, promote and provide benefits. It will affect the cost of the goods they sell and their ability to compete in domestic and international markets. It will hurt their ability to work with subcontractors and pay for retirement benefits.
In fact, Business Week notes the business consultancy of Towers Watson estimates a loss of $14 billion in corporate profits due to the Obama health regime-change (“Obama Taxs $14 Billion Charge Starts at Caterpillar,” March 25, 2010).
But, hey - to Robert Gibbs, all of this is worth one modest shrugging of his shoulders. Here’s what he said on Air Force One when asked about the hit Deere and Cat will have to take due to his boss’s new medical system overhaul:
So basically, they get a subsidy and what amounts to two deductions. They get the subsidy that’s not counted as income, then they get to write off the spending. This bill, our bill, simply closes the loophole.
Similarly, Commerce Secretary Gary Locke responded, “The rules…and a lot of the regulations on how this will affect large businesses haven’t even been published yet. So for them to come out, I think, is premature and irresponsible.”
I see: The Obama people are just closing tax “loopholes,” but it’s irresponsible for companies to estimate what the de facto taxes will cost them. How silly - a company ponders the affects of a tax hike and it’s irresponsible for letting its investors know its cost estimates. Guess I missed that lucid economic principle somewhere along the way.
Ask the families of people who are about to lose their jobs because President Obama and his congressional allies couldn’t care less about the private sector. Many of the President’s senior aides and appointees (including Mr. Gibbs) have never held jobs in the open market. They have never actually created a job, met a payroll, worried about opening a new store or burned the midnight oil experimenting with a new product.
In showing contempt for individual and corporate taxpayers, Robert Gibbs and Gary Locke reveal the true heart of the current Administration: Elitist, dismissive, arrogant and fundamentally ignorant of the American system of entrepreneurship, enterprise and market-based competition.