The idea that President Obama is anti-business broke into the mainstream this week.
It has long been a widely held view on the right that Obama’s rhetorical nods to the free market and American business were little more than that. But as Washington slowly staggered back to work this week following a long July 4 weekend, discussions of Obama’s troubled relationship with the private sector popped up with surprising frequency.
Newsweek’s Fareed Zakaria wrote Monday that after speaking with numerous corporate executives, most of whom voted for Obama, he found that “all think he is, at his core, anti-business.” Tuesday, the Washington Post reported on a 65 percent decline from two years ago in donations to Democrats from Wall Street, due to the financial regulation bill nearing passage in Congress.
On Wednesday, the Daily Beast’s Lloyd Grove reported from the Aspen Ideas Festival in Colorado that New York Daily News owner and publisher Mortimer Zuckerman said the Obama White House has a “hostility to the very kinds of [business] culture that have made this the great country that it is and was.”
Steve Pearlstein of the Washington Post noted: “There is no denying it — bad blood has developed between big business and the Obama administration, and that’s not a good thing.” Pearlstein argued that businesses could do much more to pull their weight on improving the economy rather than blaming the administration.
Even Bloomberg News Washington editor Al Hunt, in an op-ed arguing that Obama is not anti-business, said that “Obama should realize that’s what he too often conveys.”
Complaints about economic uncertainty created by Obama’s health care bill and the financial regulation bill have already been percolating for a few weeks. Much of this was kicked off by an explosive indictment of Obama’s policies by Verizon CEO Ivan Seidenberg – who has been a key business ally of the president’s – in late June.
And though the White House feels that it has true free market believers such as Treasury Secretary Tim Geithner and National Economic Council director Larry Summers in key decision-making positions, many top business leaders see the two – who have both been in government or academia their entire lives – as poor substitutes for men or women with actual business expertise.
“One of the concerns in the business community writ large is that this administration has no former CEO – manager of a business enterprise – anywhere in this administration,” said R. Bruce Josten, a top official at the U.S. Chamber of Commerce who oversees its government affairs division.
Josten eschewed the “anti-business” label for Obama.
“I have said instead that if they want to move this economy forward then they should certainly be embracing a partnership and be more pro-business,” Josten said in an interview.
Obama has moved of late to try and blunt the growing notion that he is antagonistic toward the private sector. On Wednesday, he spoke at the White House on what he characterized as a “relaunch” of a commitment to promoting trade with other countries. He said last week that he hopes to present a free trade agreement with South Korea to Congress for ratification early next year.
“The Administration’s belated recognition of the link between trade expansion and economic growth through its newly announced support for the pending FTAs with Korea, Colombia and Panama is welcome,” said Daniel M. Price, a top international economics adviser to former President George W. Bush, in an interview.
And on Thursday Obama will visit Kansas City, Missouri to tout a $32 million grant to help Smith Electric Vehicles build all-electric trucks. He will also once again defend his broader economic policies.
Jared Bernstein, a top White House economic adviser who is on Vice President Joe Biden’s staff, said Wednesday that “President Obama is obviously deeply pro-business, pro-markets.”
“I’d absolutely reject the premise that somehow there is an opposition there,” Bernstein said in a conference call with reporters to preview the president’s trip to Kansas City.
Bernstein said that “some of this discussion of uncertainty reflects a transition out of the deepest recession since the Great Depression, a downturn that was caused by a financial meltdown that absolutely had to be addressed, and the president’s financial regulation agenda … is critical in that regard.”
He also argued once again that Obama’s health care overhaul, which passed into law in March, is a dramatic step toward putting the country on a sustainable path. He cited numbers from the Congressional Budget Office to support this argument, even though the CBO director has directly contradicted Bernstein’s assertion on this point.
“The long term fiscal challenges this nation faced had to be addressed through health care reform,” Bernstein said. “If you look at the CBO score on that you see the tremendous impact that has on helping to deal with the long term fiscal constraint which any business person will tell you is essential for creating a positive economic climate.”
“The rising costs of health care will put tremendous pressure on the federal budget during the next few decades and beyond,” Elmendorf wrote on May 28. “In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.”
Obama backers also like to point out that corporate profits are expected to be 65 percent higher in 2010 than in 2008. But that fact needs two pieces of context. First, 2008 was the year the market nearly collapsed and profits took a nose dive. And second, businesses are not using profits to hire but are instead sitting on a collective $1.6 trillion in cash reserves, mostly due to uncertainty that many believe has been created by massive regulatory regimes created in the president’s health law and the financial regulation bill.
“The business community understands that this president has very little regard for what it takes to succeed in a competitive economy today,” said Tony Fratto, a former Bush administration Treasury and White House spokesman, in an interview by e-mail. “They have led a regulatory assault, a tax assault, an assault on capital, on profits, on compensation — even a rhetorical assault, and they sit in the White House and wonder where the jobs are.”
Even in Obama’s remarks on trade at the White House Wednesday, one economic expert noticed an attempt by the president to continue sounding populist notes even while casting himself as on the side of business.
“Too much government regulation and spending can stifle innovation, hamper confidence and growth, and hurt business and families. But a government that does too little can be just as irresponsible as a government that does too much,” Obama said. “After all, in the absence of sound oversight, responsible businesses are forced to compete against unscrupulous and underhanded businesses, who are unencumbered by any restriction on activities that might harm the environment, take advantage of middle class families, or, as we’ve seen, threaten to bring down the entire financial system. That’s bad for everybody.”
The economic expert, who spoke about the president’s speech on the condition of anonymity, said Obama’s rhetoric was “an effort to mend fences following the relentless demonizing [of business] he found expedient for health care and financial reform.”
“On the one hand he is making nice to business and on the other explaining why government intervention is necessary, but this time couched in terms of protecting ‘good’ business from ‘unscrupulous’ business,” the expert said.
Bernstein defended the president’s criticisms of business.
“When the president has felt that folks from any sector of the economy have acted in ways that are hurtful to the majority of the American people, he’s called them out on that,” he said.