Conservatives and corporate leaders routinely blame President Obama's policies and proposals on progressive taxation and new regulations for the current weak state of the economy. Such claims were reheated yesterday with a fresh blast of hot air from Wynn Resorts CEO Steve Wynn.
Wynn chose an odd moment to attack the President's handling of the economy -- during a conference call touting a higher than expected $200 million profit in the second quarter of 2011, in part due to the rebounding tourist industry in Las Vegas.
Yet despite his own financial success during the Obama presidency, Wynn accused the President of smothering business and stoking "fear" with "socialism":
...I'm afraid to do anything in the current political environment in the United States ... this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it. And I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems -- that keeps using that word redistribution.
Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration. And it makes you slow down and not invest your money.
Everybody complains about how much money is on the side in America. You bet. And until we change the tempo and the conversation from Washington, it's not going to change. And those of us who have business opportunities and the capital to do it are going to sit in fear of the President.
And a lot of people don't want to say that. They'll say, "Oh God, don't be attacking Obama." Well, this is Obama's deal, and it's Obama that's responsible for this fear in America.
The guy keeps making speeches about redistribution, and maybe we ought to do something to businesses that don't invest or holding too much money. We haven't heard that kind of talk except from pure socialists...
...I'm telling you that the business community in this company is frightened to death of the weird political philosophy of the President of the United States. And until he's gone, everybody's going to be sitting on their thumbs.
Yet minutes before Wynn smeared the President as an anti-business socialist, he praised Communist China as "absolutely delicious."
September will be our fifth anniversary in the People's Republic of China in Macau, and we love it there. We are so grateful to be part of that market and to be allowed to participate in that community.
We find the political environment, the regulatory environment, the human resource environment that we're in to be absolutely delicious. Life is quite straightforward in China. The government is predictable.
Why would Wynn praise Communist China while attacking the American president as a socialist?
His own stated argument doesn't make any sense.
President Obama -- who has never characterized his policies as "redistribution" despite Wynn's claims -- has compromised to keep taxes low on the wealthy longer than he would like. Whereas China recently cut taxes on low-wage earners and raised them on the wealthy in an explicit attempt to reduce income inequality.
Furthermore, China's top income tax rate is 45%, while America's top tax rate is now at 35%, and would only go up to 39.6% if the Bush tax cuts for the wealthy are allowed to expire under current law as the President supports.
Regarding corporate taxes, China's corporate tax rate of 25% is technically lower than America's. But it is well known that the US code is so loophole-ridden than we actually have the fourth lowest effective corporate tax rate among developed countries. And President Obama has long supported cutting the corporate tax rate in exchange for the closing of loopholes.
China isn't exactly a free-market paradise when it comes to regulations. As Time reported last year: "Foreign businesses in China are voicing growing frustration about the country's heavily regulated market — a bureaucratic maze many say is designed deliberately to hamstring non-Chinese players to the advantage of their local competitors."
So how can it be that President Obama is a socialist pining for redistribution and China is a delicious business paradise?
Most likely, China's regulations aren't getting in Wynn's way. There's no local casino industry the Chinese government is trying to protect. And China is quite willing to relax environmental and labor rules when it serves its short-term interests. So China is treating Wynn just fine.
That is the point. Wynn's fact-free concerns are not about the larger economy. They are about his own self-interest.
Such short-sighed selfish whining about regulation and taxes from American CEOs is what led to decades of deregulation and the Bush tax cuts, which led to a lost decade of job growth and a gigantic financial market crisis.
Wynn's rant is not straight-talk from the business community. It's just more of the same nonsense that got us into this mess.
