It's official. The president's stroll to the Chamber of Commerce marks the handing over of the keys to the future of the middle class to the business world (not to mention the complete airbrushing out of the entire economic picture anyone considered poor). And it really has happened with not much struggle.
For those who didn't catch the news:
Mr. Obama will address the chamber on Monday as part of a post election effort to improve relations with business and, he hopes, accelerate economic recovery
Tellingly, the President is not dropping in on the AFL-CIO, which is literally around the block from the Chamber... that's a joke...
What is most astonishing, in all seriousness, from my perspective, is the spin that has taken hold at this moment. That is, the spin that that the president has been really hard on business in the first two years of his Administration, and, now, he's pulling back.
You have to be kidding.
From the outset, going back to his days as a candidate for office, Barack Obama has been a business-friendly, economic centrist. I don't think he would take offense at that description -- it's a truth. He surrounded himself with Robert Rubin and a whole set of the corporate leaders of America -- partly for fundraising reasons but also because he truly frames himself as a "free market", "free trade" advocate.
Instead of pushing for a single-payer health care system, which is actually the only system that can relieve the economy of the crushing costs of health care, the president pushed for a system that essentially handed the insurance industry windfall profits of hundreds of billions of dollars over the next decade and beyond.
Instead of breaking up big banks, or demanding that any financial institution receiving government bailouts remove its leadership or cutting down the size of Wall Street, the president supported mostly tepid reforms in the power and influence of Wall Street, including meaningless compensation reforms that Wall Street has already figured out to circumvent, promising even better times for the financial industry.
Instead of demanding that corporations start paying a fair share in taxes, the president hired, from the get-go, people like Larry Summers and Rahm Emanuel -- both of who were deeply entrenched in the financial world, and has now turned to the point person on NAFTA for the Clinton Administration -- Bill Daley -- to be his chief of staff and asked a CEO who aggressively helped General Electric become "the best in the world" at avoiding taxes to lead a "Council on Jobs and Competitiveness".
And what is the truth about corporate taxes, which, at a time of large budget deficits, the president now appears to be setting the stage to cave on that issue as well:
First, the U.S. only taxes corporate profits generated in the U.S. (or repatriated to the U.S.) so that it is mostly up to foreign countries to tax the profits these corporations generate offshore, and yet some people are referring to worldwide taxes U.S. corporations pay on their worldwide profits when they discuss the U.S. corporate tax system. The worldwide effective tax rate includes taxes that a corporation pays to all governments in the world. But to understand how the U.S. corporate income tax is working, one must focus on U.S. taxes paid on U.S. profits. No one expects Congress to do much about taxes that U.S. corporations pay to the governments of France, Germany, or Japan!
Second, to get a sense of what a corporation pays each year, we should include the current U.S. taxes paid, but not the deferred U.S. taxes. "Deferred" is a euphemism for "not paid." Corporations can defer (delay) paying taxes if, for example, they enjoy tax breaks for accelerated depreciation, which allow them to take deductions for capital investments sooner than they would if the rules were simply based on the actual life of the investment. A company could eventually pay taxes that it has "deferred." But that doesn't happen very often.
At the behest of Republicans, some Democrats and the business community, the president has ordered a review of government regulations -- even though it will likely cost more to conduct the review than any likely savings to come out of the process, and even though the meme of government "over-regulation" that has seized hold of the political debate in the past 30 years was a contributing factor to the de-regulation of the financial industry... well, we know how that turned out.
On trade, what has the Chamber actually had to complain about? From his first days in office, the president made it clear he would push for so-called "free trade" -- which I and others have argued is a principal reason for the worldwide decline in wages.
From where I sit, the main complaint from the Chamber of Commerce's members seems to be that the president described some of them as "fat cats." Well, folks, these two stats say it all:
First, "CEO pay in 2009 more than doubled the CEO pay average for the decade of the 1990s, more than quadrupled the CEO pay average for the 1980s, and ran approximately eight times the CEO average for all the decades of the mid-20th century."
Second, "A chief executive officer of a Standard & Poor's (S&P) 500 index company was paid, on average, $9.25 million in total compensation in 2009.At the same time, millions of workers lost their jobs, their homes and their retirement savings in the worst financial crisis since the Great Depression."
They are fat-cats -- and, worse, many of them are failure, incompetent fat-cats.
There are endless more examples.
The surrender happened with almost no fight.
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