Another president pleaded with business titans to hire people. Unsuccessfully. His name was Herbert Hoover, another smart, well-meaning, self-made man who was overwhelmed by discontinuity. As President Obama meets with some top CEOs today, it’s difficult to characterize him as “anti-business,” or at least anti-big-business. He bailed out the too-big-to-fail banks and left their risky practices in place. He backed down on letting the Bush tax cuts for the rich expire — which produced some of the worst growth in decades — and is retreating on new emission standards by the EPA. Corporate profits are at an all-time high. Still, that’s the meme.
Some things we can be pretty sure won’t be discussed today at the summit:
1. How a secret elite of nine bankers controls the market in derivatives, the often dangerous, often value-less instruments that continue to pose a risk to the financial system.
2. The overstated fear of “uncertainty,” and its supposed effect on hiring. In reality, many companies, especially big ones, used the recession as an excuse to radically reduce American payrolls, and they can make historic profits with a much smaller American workforce. So why hire?
4. The need to address offshoring of American jobs and stagnation of average wages. Do these masters of the universe think there will be the means to buy their product if most Americans see their living standards keep falling.
5. Growing evidence that world oil production has peaked (the International Energy Agency says in 2006) and the need to prepare for a high-cost energy future instead of subsidizing fossil fuels and supporting dictatorships of oil-rich states.
6. Is there any room in their “business models” for the common good? A purist would say no: These companies simply exist to make a profit. Then why resist regulation to keep the market healthy and competitive, and investment in education and infrastructure to keep the nation competitive? The cigar-chomping grandees in the Hoover years thought such “Utopian” schemes were hooey. And now…
Oh, we’re not having this conversation.
Today’s Econ Haiku:
Not just at Pacific Place