Before he died, Apple CEO Steve Jobs reportedly told President Obama to adopt more business-friendly policies, because "regulations and unnecessary costs" had made it difficult to build factories in the United States. If he didn't change course, Jobs warned, "You're headed for a one-term presidency."
Jobs' words resonate now as the campaigns of Obama and his Republican rival, Mitt Romney, lob accusations of "outsourcing" back and forth. Obama claims Romney was a "pioneer in outsourcing jobs" because Romney's old private equity firm, Bain Capital, invested in some companies that created jobs in foreign countries. Romney claims Obama is the "outsourcer in chief" because billions in economic stimulus dollars went to foreign companies.
Both of these charges miss the bigger question: Whose policies make it easier for all businesses to create jobs here in America? Whose policies make it more profitable for companies to move operations elsewhere? On these questions, Obama has a clear record -- and it isn't good.
The World Bank recently began publishing an annual "Doing Business Report" that ranks 183 national economies on 10 economic factors. As recently as 2008, the World Bank ranked the United States the fourth best country in the world in which to start a new business. Today, the U.S. has fallen to 13th place.
The biggest factor dragging the U.S. down is its complicated tax system, which ranks 72nd in ease of compliance -- slightly better than Madagascar but slightly worse than Djibouti. Under Obama, the U.S. corporate tax rate became the highest in the world when Japan cut its rate recently. True, the effective rate that companies actually pay is slightly lower, but only by investing millions in lawyers and accountants to manipulate the tax code. Every dollar that firms spend avoiding high taxes is a dollar they are not spending on research and development or capital investments.
The World Economic Forum has also downgraded the Obama economy. Its annual Global Competitiveness Index surveys more than 14,000 business leaders in 142 economies and ranks them on 12 "pillars of competitiveness." When Obama became president, the United States ranked 2nd. Now we rank 5th. The GCI explains the Obama era decline in terms of increased government debt and concerns over "the government's ability to maintain arms-length relationships with the private sector." The survey also notes that "[i]n comparison with last year, policymaking is assessed as less transparent ... and regulation as more burdensome. ..."
In other words, Obama's crony capitalist policies have eroded trust in the business community, his record-breaking number of new major regulations have made it more expensive to do business and his failure to contain spending has increased fiscal uncertainty. That is what is driving American jobs overseas.