Obama and Big Business Trade Blame on the Economy
Kenneth T. Walsh
The war between the White House and big business is getting worse. Tom Donohue, CEO of the U.S. Chamber of Commerce, fired the latest salvo last week when he warned that President Obama's policies, including new government regulations and vast government spending, are slowing growth and stalling job creation. Like many other business leaders, Donohue argues that the administration is meddling too much in the economy and creating uncertainty that is causing executives to cut back on expansion and hiring. "Taken collectively," he says, "the regulatory activity now underway is so overwhelming, and beyond anything we have ever seen, that we risk moving this country away from a government of the people to a government of regulators." He particularly objects to proposed tax increases on individuals and businesses, and to the expanding federal role in healthcare, finance, energy use, and consumer protection.
These comments follow the remarks of Verizon CEO and Business Roundtable Chairman Ivan Seidenberg, who said that by "reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses. And General Electric CEO Jeff Immelt told the Financial Times that government's overregulation was hurting economic recovery and that "business did not like the U.S. president, and the president did not like business."
Overall, says a prominent Republican strategist who is advising congressional candidates, many business executives were willing to give Obama the benefit of the doubt at first, hoping he would turn out to be a pragmatic centrist like Bill Clinton. Now those doubts are gone. "The administration's approach to business is radical and punitive," he says.
The administration is fighting back. In a letter to the chamber, White House Chief of Staff Rahm Emanuel and White House senior adviser Valerie Jarrett said business leaders are being too harsh and divisive. "The stakes are far too high for us to be working against one another," the two White House officials argued. "That is why we were surprised and disappointed at the rhetoric we have heard from some in the business community." Their letter added: "We will not, however, accept a return to the lax regulation of the financial industry that contributed the worst economic crisis since the Great Depression. And we will not stand by while oil and gas companies continue to fight needed changes to the outdated regulations that are partially responsible for one of the worst environmental crises in American history" -- the massive oil leak in the Gulf of Mexico.
For his part, Obama has been aggressive in condemning what he considers abusive or unwise practices by big business, especially Wall Street investment houses, the insurance industry, and, of course, oil companies like BP, which is responsible for the catastrophic mess in the Gulf. He did this in his recent fund-raising appearances for Democratic Senate candidate Robin Carnahan in Missouri and for Senate Majority Leader Harry Reid in Nevada. White House aides say he will take the same approach right through the November 2 elections.
But Obama isn't expected to wage an all-out campaign against business interests. "He isn't the kind of guy to pick fights," says a friend. "His instinct is to find compromise." In fact, on the same day that the chamber was blasting him, Obama was meeting at the White House with billionaire investor Warren Buffett to discuss ways to bolster the economy.
One fear among Democrats is that corporate America will greatly increase its spending in this fall's campaigns, funneling what White House Press Secretary Robert Gibbs predicts will be "tens of millions of dollars" against Democratic candidates. This could turn key races toward the Republicans and might even cost the Democrats control of the House or the Senate.
But there's another complication. Many liberals, a core constituency of the party, want more government pushback against big business, not less, and they are disappointed that the White House isn't being tough enough. Their argument is that the government has given bailouts to Wall Street, auto companies, and irresponsible mortgage holders, and spent billions on pork-barrel projects, while middle-class Americans who play by the rules have gotten short shrift.
If those activists stay home in a snit in November, the Democrats will suffer enormous losses.
- Bernanke Carries Extra Burden for Economic Recovery
- Downward Pressure on Home Prices Mounts
- Dirt-Cheap Mortgage Rates: Here for How Long?
- Weak Demand & Tight Credit Keeps Builders On Sidelines
- Obama and Big Business Trade Blame on the Economy
- Why Start-ups Could Make or Break the Job Recovery
- Before the Wall Street Crisis, There Was 'Poverty, Inc.'
- New Finance Bill: Mountain of Legislative Paper; Molehill of Reform
- Financial Reform Another Talking Point for Obama & Democrats
- The Vanishing American Consumer and the Coming Trade War
- Why the Economy Isn't Quite as Bad as It Seems
- 6 Reasons the Housing Market Hasn't Recovered
- Why Everyone Suffers When Job Seekers Give Up
- Depressed About The Economy? Maybe Because You're Earning Less
- Obama's Anti-Business Policies Are Our Economic Katrina
- Republicans' Aversion to Financial Reform Misguided
- Slouching Toward a Double Dip or Lousy Recovery at Best
- 8 Problems That Could Trigger a Double-Dip Recession
- Why Congress Cannot Afford Not to Extend Unemployment Benefits
- Distressed Home Sales to Sandbag Housing Revival
- Home Sales Poised to Drop in Coming Months
- The Economy's Lasting Impact on Your Retirement
- Forget Obama - Fear the Real State Capitalists
- Imperative Need for America to Become an Innovation Nation
- Jobs Bill a Tough Call for Democrats
- What Soldiers at War Can Teach Us About Surviving Financial Warfare
- 5 Things to Know About the Newest Jobs Bill
- New Home Sales Plummet to Record Low
- The Housing Market's Unexpected Drop
- When Obama Trades Jobs for a Higher Priority
- When National Politics and Home-State Economics Collide
- Reasons -- and Ways -- to Splurge This Summer
- What China's Currency Reform Means For Investors
- The Democrats' Economic Vision Problem
- Urban Abandonment
- Coping With China's Financial Power
- Is the Recession Over?
- Managing Debt Remains Key in Face of An Uncertain Economy
- Home Repossessions Hit New Record High
- 2010 Elections Will Turn on Jobs and the Economy
- Chamber of Commerce Aims to Boost Trade With China
- America Has Two Sets of Rules
- Why May Jobs Report is Better and Worse Than it Looks
- Jobless Economic Recovery Remains Issue Number One
- What Financial Reform Means For Consumers
- Financial Reform Legislation Gives Shareholders More Say
- Financial Reform: Win for Wall Street - Cold Shoulder for Main Street
- Fiduciary Provision May Be Most Important Part of Financial Reform Bill
- Unfair Trade Practices Are Wiping Out Jobs
- In a Welfare State How Much Is 'Enough'?
- Should Investors Sit This One Out?
- Why Jobless Teens May Have More to Blame Than the Recession
- What Home Sales Jump Means for Economic Recovery
- Home Prices Have Further to Fall: Here's Why
- Why Housing is Headed for Second-Half Headaches
- Nancy Pelosi Will Lead America to National Ruin
- Financial Reform's Uncertain Promise
- The Way We're Working Isn't Working
- What Gold Can and Cannot Do For You
- Why Some Women Skirt the Wage Gap
- The Crippling Price of Public Employee Unions
- European Union Funding Proposal Is Only the Beginning
- Why Wall Street's Gain Has Been America's Loss
- Euro Crisis has American Fingerprints
- Wall Street Probes: Collateralized Debt Obligations
- Voters See Debt Crisis. Why Doesn't Washington?
- Social Security Inflation Adjustment Debate
- European Debt Crisis Affects Investments
- Greece: Model of Socialistic Excess
- Who Got Hit Worst in the Market Crash
- Expeditionary Economics: Spurring Growth After Conflicts and Disasters
- Why More Diplomacy Won't Keep the Financial System Safe
- Muddling through Greece's Tremors
- Greece Financial Crisis Raises Doubts About European Union
- Bigger Is Better: Case for Transatlantic Economic Union
- European Union: A Fragile Partnership
- Goldman Sachs Testimony Boost for Financial Reform
- A Culture of Criminality on Wall Street
- Greek Debt Crisis May Hurt Latin America Economy
- Why April's Unemployment Rise Shows Workers Hopeful Again
- Smart Moves for Tomorrow's Higher Interest Rates
- Still the Optimist
- The Global Glass Ceiling: Why Empowering Women Is Good for Business
- Life in the Age of 'Much Worse Than We Thought It Would Be'
- What 3.2 Percent GDP Growth Says About Our Contradictory Economy
- Congress Had a Role in the Financial Crisis
- Just a Few Questions for the SEC
- Financial Crisis - Somebody Must Pay!
- Is Latin America Booming? Not Quite Yet
- Guns vs. Butter 2010
- Your Guide to the Goldman Sachs Lawsuit
- Can SEC Beat Goldman Sachs?
- Time to Break up the Big Banks
- Resisting Wall Street Reform
- Shorting The Middle Class: The Real Wall Street Crime
- Obama Edge on Financial Reform
- 10 Cities Facing Double Whammy of Default Risks
- Capitalism vs. Capitalists
- Business Schools' Great Ethics Debate
Obama and Big Business Trade Blame on the Economy
(c) 2010 U.S. News & World Report