An eye-opening article by John Merline appeared last night in Investor’s Business Daily. In his piece, Merline interviews a man who knows a thing or two about creating jobs: Home Depot’s co-founder, Bernie Marcus. As Merline notes, Marcus and his partners founded Home Depot during a period of economic malaise similar to today’s: 1978 at the height of the Carter years. Since taking the company public in 1981, Merline has literally created over a hundred thousand jobs and is certainly qualified to comment on President Obama’s economic policies and their effect on job creation. In Merline’s interview with Marcus, they discuss, among other things, the impact of the Obama Administration’s explosion of regulations on small business:
IBD: What’s the single biggest impediment to job growth today?
Marcus: The U.S. government. Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we’d tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It’s become stifling.
In other words, Marcus’ assessment is that the business climate was better during Jimmy Carter’s tenure than it is during Obama’s. Indeed the disparity is significant enough for Marcus to conclude that he wouldn’t have been able to succeed had he encountered as hostile a business environment then as small businesses are facing now. On top of this today’s job creators and potential job creators are being treated to the spectacle of Obama claiming to be concerned by the debt crisis after having spent the past two and a half years creating it. Given this nebulous grip on reality, is it any wonder so many entrepreneurs and their cash are sitting on the sidelines? Also discussed is the, shall we say, contradiction between what Obama says and what he does regarding the regulatory environment his administration has foisted on the private sector:
IBD: President Obama has promised to streamline and eliminate regulations. What’s your take?
Marcus: His speeches are wonderful. His output is absolutely, incredibly bad. As he speaks about cutting out regulations, they are now producing thousands of pages of new ones. With just ObamaCare by itself, you have a 2,000 page bill that’s probably going end up being 150,000 pages of regulations.
And that’s just Obamacare. Who knows what the eventual impact of Dodd-Frank and all of Obama’s other regulatory schemes will be, but I think it’s fair to say that it won’t be a net positive for job creation. The most telling exchange in the interview, I think, is when Merline asks Marcus what advice he’d give Obama regarding job creation:
IBD: If you could sit down with Obama and talk to him about job creation, what would you say?
Marcus: I’m not sure Obama would understand anything that I’d say, because he’s never really worked a day outside the political or legal area. He doesn’t know how to make a payroll, he doesn’t understand the problems businesses face. I would try to explain that the plight of the businessman is very reactive to Washington. As Washington piles on regulations and mandates, the impact is tremendous. I don’t think he’s a bad guy. I just think he has no knowledge of this.
Marcus makes an excellent point here, and one Governor Palin has made many times herself: How can we expect rational economic policies to originate from an administration whose chief executive doesn’t understand — or trust — the free market and who’s never managed so much as a lemonade stand? The short answer is we can’t, of course, and that’s why the Carter economy doesn’t look as bad as it once did when viewed through the prism of the Obama economy. The only thing that will get the moribund economy moving again is a 180 degree change in policy from Washington. Unfortunately, given Obama’s glaring incapacity for understanding how markets work, we’ll have to wait until January 2013 for that. Read Merline’s entire interview with Marcus here.