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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

October 26, 2010 at 10:20 AM

President Obama and business: What went wrong

Here’s some red meat to get you partisan commenters going. If the mid-term elections go heavily Republican, as the conventional wisdom predicts, how much of that will be because President Obama and the Democrats lost the business vote? It’s a complicated vote because there is no single “business community” with a single viewpoint. Nevertheless, much of big business has proven hostile to Mr. Obama and spent heavily to swing the Congress to the GOP. This ranges from the Koch brothers and U.S. Chamber of Commerce to industries bailed out by the Obama administration. Most of these donors are secret.

It doesn’t seem to make sense at first look. Mr. Obama preserved many Bush programs, including TARP, which bailed out the financial giants largely on their terms. His Attorney General, a corporate lawyer, has pushed no major prosecutions of the banksters and their widespread frauds. He led a successful rescue of General Motors and Chrysler. The Obama stimulus, while too small, benefited thousands of big and small companies. He has continued spending on the national security economy. Nothing has been “nationalized.” Unions have been kicked to the curb on the Employee Free Choice Act. Google’s $60 billion tax loophole and all the others — still in place. The health-care reform, heavily modeled on that of Massachussetts Gov. Mitt Romney’s work, is a big boost to insurers. The sweetheart deal in Medicare Part D for big pharma remains untouched. Much of the stim was taken up by tax cuts. George W. Bush at least talked about peak oil; not Mr. Obama. This is an abbreviated list.

I don’t get it. Whatever the work of the past year-and-a-half, it has not been that of a “liberal” president.

Some insights come from a New York Times Magazine piece, “The Education of a President”:

As he made a round of corporate job interviews after stepping down as White House budget director, Peter Orszag was stunned to discover how deep the gulf between the president and business had become. “I’d thought it was an 8, but it’s more like a 10,” he told me. “And rather than wasting time debating whether it’s legitimate,” he added, referring to his former colleagues, “the key is to recognize that it’s affecting what they do.”

And:

When Obama addressed the Business Roundtable this year, he left after his speech without much meet-and-greet, leaving his aides frustrated that he had done himself more harm than good. He is not much for chitchat.

Like one of his models as a “transformative” president, Ronald Reagan, Mr. Obama has a coolly self-contained and shielded personality; unlike Mr. Reagan, he doesn’t conceal it well. It seems clear that Mr. Obama didn’t work hard enough to connect with the big business leaders who had the clout and cash to defeat his agenda.

Many will say Mr. Obama didn’t push a real progressive agenda that would quickly benefit average people, and he had trouble getting any credit for his genuine accomplishments from a hostile corporate media. They will point to the Supreme Court’s watershed Citizens United decision, which allows unlimited political spending by corporations and unions (the latter heavily outspent by big business). And they will wonder, with income inequality at 80-year highs and corporations capturing regulators, if America has become a plutonomy.

I’ll leave it to others to make the “socialism!!” argument. I suspect Mr. Obama was at the wrong place at the wrong time, and will be blamed by many for fundamentally broken economy, little of it his fault. This also, along with the Democrats inability to craft a coherent message, caused unpredictability, which business hates. Many titans may have benefited from the Obama policies, but they think they can get more from the GOP. Some were hostile from the start, whether for ideological reasons or self-interest, such as wanting to head off any chance of addressing climate change.

It looks like they’ll get more of what they want, including, perhaps, as Sen. Mitch McConnell said, making Mr. Obama a one-term president.

Today’s Econ Haiku:

Delta waves off Boeing

Wait ten years on those new planes

That’s a lost decade

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