NEW YORK ( TheStreet) -- The Obama administration's words are speaking louder than its actions when it comes to boosting business activity and stimulating job growth.
This week, the president scored a major political win by pushing yet another stimulus bill through a spend-weary Congress. The goal: Using $42 billion in tax and loan incentives to spur banks to lend and businesses to grow and hire.
But the bill comes at a bad time for success.
Populist rhetoric has heated up ahead of midterm elections, creating a culture where businesses must cloak their success. Meanwhile, the legislative agenda has been working against the notions of free-market capitalism that entrepreneurs tend to embrace.Established business leaders who could most help President Obama's economic agenda are fed up with the "fat cat" soubriquets he has hurled in their direction. They're also unsure how sweeping regulatory changes - from health care to energy to the financial markets to tax policy - stand to impact their businesses and customers. "It's clear that the range of Washington policy risks is dampening the business activity," says David Malpass, economist and president of Encima Global, who has served in senior roles at the U.S. State Department and U.S. Treasury departments. "Companies are hesitant to go to the bank because they don't want to be turned down for a loan. They are hesitant to hire a new worker because of potential health care liability. They're hesitant to put in their aging parents' money into their business because the after-tax return as tax rates go up won't be worth it." Malpass argues that while the small-business bill is meant to help the little guys on Main Street, its passage actually stands to hurt economic growth. He thinks Obama's policy goals have cost corporate America more, restrained hiring, hampered lending and sapped confidence from the already-edgy investor community. "It's another harmful bill because it gives the private sector the clear proof that Washington intends to control every aspect of credit flows, income flows and job flows," says Malpass. "We've got Washington controlling autos, mortgages, finance, health care and now small businesses." Not everyone agrees with that view - there's a strong debate over the root cause of the recent economic pause. Some lenders, economists and observers insist that activity has slowed because there's simply not enough demand. Others place the blame squarely on the uncertainty coming from Capitol Hill.