Ivan Seidenberg, chairman of the Business Roundtable, which is the association of chief executives of many of the largest U.S. corporations, recently criticized President Obama and his administration for "creating an increasingly hostile environment for investment and job creation." (Mr. Seidenberg, whom I know well and greatly admire, is the chief executive of Verizon Communications.)
In what has been described as one of the sharpest breaks ever between 'big business' executives and a White House, Seidenberg cited as major problems non-completion and ratification of the pending Korea, Colombia and Panama free trade agreements (FTAs) and the efforts in the financial reform bill to tighten rules on derivatives trading and give shareholders a greater say in choosing company directors. The Roundtable also wants a U.S. corporate tax structure that 'better promotes the competitiveness of U.S. corporations in the global marketplace', which for it simply means no changes in the tax deferral provisions that have been so rewarding to its multinational members.
The Roundtable was immediately joined in this critique by the Business Council, the group chiefly comprising the nation's major multinational manufacturing companies, and later by the U.S. Chamber of Commerce. Tom Donahue, who runs the Chamber, opined that President Obama is following "a pro-union agenda which is burying U.S. businesses in a new generation of regulations and that Washington's trajectory is creating more uncertainty for businesses that will mean more job destruction."
I couldn't disagree more with all three organizations.
Pretty obviously, their expressed desire for 'government to remove itself from the private sector' is only a slightly veiled demand for (1) more (not less) laissez faire regulation, (2) more (not fewer) individual tax policies that favor the wealthy, (3) unlimited (not regulated) derivatives trading such as almost destroyed the U.S. and global economies, (4) diminished (not enhanced) shareholder rights, and (5) more (not fewer) job-sucking FTAs of the sort that Ross Perot first had the courage to identify when NAFTA was being shoved down the throats of American workers.
Much more important to the administration than these self-serving criticisms from the 'Big Business Three' should be the Washington Post/ABC News poll published last Tuesday that found that 54 percent of respondents disapproved of the President's handling of the economy while only 43 percent approved. Sixty-two percent of respondents thought the country as a whole is going in the wrong direction, while only 29 precent had a positive feeling.
Even though the President's chief spokesman says the administration never worries about polls, it had better be worried about this one, since "It's (more than ever) the economy, stupid!"
In life -- and notably in politics -- your virtues are often made most clear by your opponents. If the Roundtable, Council and Chamber had demanded these things of me as the price of cooperation on the job creation front, then I would have felt that "my work here was finished." But obviously not the Obama White House.
The administration hears these demands and instead it immediately asks, "What can we possibly do to get back into your good graces?" This despite the fact that the administration's tepid jobs and trade initiatives to date can hardly be considered draconian or harsh. (It was, after all, the private sector's irresponsibility in many cases, plus ineffective or missing regulation, that together brought us this damnable Great Recession!)
Even though Obama's political advisor David Axelrod set the perfect tone when he said, "We want to continue to work closely with business, but working closely doesn't mean that we...simply turn away from the kinds of corrective measures that are necessary to prevent disasters from happening again," the Obama administration has now embarked on a widely reported 'charm offensive' to woo back big business's support.
Frankly, we would be much better served if the administration set about creating harmony with the business community by orchestrating clearer -- and more certain -- pathways to a resuscitated economy and a more fully employed workforce.
In past recessions, CEOs eventually created out of their own courage and convictions the certainty, and confidence, they needed to move their companies forward. The Great Recession of 2007 is so "Great", however -- and the task of quickly creating 22 million new jobs so daunting -- that this time it's going to take certainty of the sort that only large-scale Keynesian-type government intervention in sustained job creation can generate. With CEOs in America already spooked about energy reform, financial reform that still has so many underlying regulations unsettled, and globalization run amok (especially our trading with China), they are not otherwise going to start hiring in meaningful amounts and investing the staggering $2 trillion in cash reserves which, in the aggregate, they have accumulated.
If the Obama administration really wants to help businesses of all sizes, then there are a host of policy initiatives, from one end of the economic spectrum to the other, which the White House should embrace and advance through to adoption, all intended to level the global playing field and immediately boost American businesses and jobs.
It seems odd to say this at this late date, but first and foremost the administration needs to acknowledge the sheer magnitude of real unemployment in the country -- it's 29.7 million out-of-work Americans, not 14.6 million, and it's 18.5 percent of total workers, not 9.5 percent -- and it needs to stop saying, as it did again just last week, that it hopes this summer's "infrastructure boomlet" will be effective enough to help achieve the goal of having "saved or created" 3.5 million jobs by the end of this year. There is no such category as "jobs saved," and the only relevant number is the 22 million new jobs we are missing today and need to create in order to have full real employment.
The 'full employment and high individual consumption model' that America adopted after World War II has been completely wiped out by the greatest income inequality since 1928 and by decades of stagnant real incomes for most wage-earners -- as Martin Wolf just identified in the Financial Times, of every $1.00 of real income growth that was generated in the past thirty years, 58 cents went to the top 1 percent of households. In response, one way or another President Obama needs to be the alchemist behind a new grand bargain between true Progressives, who are committed to creating those millions of new jobs and oppose slashing the programs that millions of Americans now depend on more than ever, and Conservatives, who seem to almost always support big business and always favor lower corporate and payroll (and individual) taxes.
Progressives need to concede that a good economic and tax system, with readily apparent certainty, is one that encourages investment, growth and jobs, not one that intrinsically soaks the rich and punishes corporations. Conservatives, in turn, need to concede that additional government revenues need to be raised by taxes that least distort economic decision-making, such as a value-added-tax that at least 139 nations already have, which would more honestly meet the Roundtable's objective of a "U.S. corporate tax structure that better promotes the competitiveness of U.S. corporations in the global marketplace".
In the end, all that matters now -- for businesses and workers alike -- is restoring vibrancy to the middle class, and bringing back to all families and workers the American Dream of equal opportunity and fair employment. A vibrant American middle class growing from the bottom up has always been the very best thing for American business.
Using a pro football analogy, it's past time for the President to rethink his economic game plan, change some of his key players if need be, and call some audibles, lots and lots of audibles, until he finds most of those missing jobs and greatly reduces the plague of persistent income inequality.
Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.
With a reformed Value of Labor established, and a new Labor Standard that makes economic transfer units equitable and just, Money will be replaced with a new mechanism that can't be hoarded, misappropriated, manipulated, used on any black market, borrowers charged usurious interest rates and excessive fees, and the like. That will be the true Dawn of Abundance, and Jobs.
But Leo, Robert, and others likely know it will only occur after the Last and Greatest Nicholas Taleb
Black Swan of all. Even Nouriel Roubini, Jim Rogers, and Robert Schiller don't want to go public with their inner thoughts, but this Black Swan is the Elephant in the whole SocioEconomicPolitical
House (eco means house) today.
Obama Admin has to stop telling us how many jobs he saved vs how many jobs he created through his policies.
I really don't know how things will change. The democrats and republicans are either not as bright as we would hope the leaders of the world should be or are puppits of other forces that want them to have consistent messages to get votes for even dumber political groups that need a formula to vote: such as christian, anti abortion, pro constitution (what ever that means), no spending on social programs except the 75% of the budget ? that we spend on Medicare and Medicaid, and social security, because cutting those is political suicide, being anti gay, pro Sarah palin or at least pro tea party, pro tax decrease, anti free trade because they are not playing fair, and pro immigration reform with walls, exportation, etc.
So how do we create jobs.
1. Increase manufacturing in USA
2. Discourage companies from leaving country by giving enough incentives
3. Make college more affordable and give competition to big schools who demand ridiculus tuition with no ability to secure employment for graduates
4. Link business with universities through federally supported internships that share the cost to train and secure jobs for students
5. Reduce debt by slashing defense, getting out of Aftghanistan and Iraq. Declare victory and go home
6. Put big money into major national infrastructure projects like coast to coast Maglev trains"
or a left-wing totalitarian communist dictatorship with Obama leading the way, and John Holdren deciding who to sterilize, and Kathleen Sebelious implementing State mandated dietary consumption and outlawing cigarettes, what we have to realize is this. It's all going to lead us to the same place if we continue to allow the corruption in Washington to go unchecked.
Meanwhile, the elitite bankers who own them all, and BOTH political parties, don't really care how we sort it all out. They just try and keep it from going nuclear and hurting all of their commodities and investments. In the end, they'll still be in ultimate control of the government no matter what form of government we have. They simply don't care. They'll be at the top of either scenario that plays out.
But it seems like you're calling for less regulation?
Always a confusing statement, especially now, with the gulf all but poisoned by an unregulated company (that we give subsidies to???) and with the guy running in Wisconsin wanting to now drill for oil in the Great Lakes. When the EPA told british petroleum to stop using the dispersants they were using because of the toxicity involved, and british petroleum decided to continue using it, anyway...which sounds like we need MORE regulation with Sharper Teeth.
Or are the regulations you're speaking of the non-regulated throwing away of jobs and lives here in the United States of America, to start buying product (say the engineered drop down masks of passenger airplanes and the components that make it work) from Indonesia? There already is a lack of regulation.
Of course businesses want to pay less taxes.
They also want to diet by eating ice cream and cake while sitting around on the couch watching home shopping network (because they don't have commercials)...
(http://www.humortimes.com/durst1.htm)
Regulations like the highways? They have specific designs to conform with, and the car manufacturers are feeding on those, but...they were designed for the middle of the last century. It's time for some major overhauls, and obviously, big business isn't willing to enter into "TODAY".
They like business as usual.
These are points I write to the Whit House about.
I LOVE being able to do that.
These are just the "regulatory" end. I have some really mean things to say about our less than aware car manufacturers...but, I figured, I'm not actually a business major.
Maybe I should just keep my feet in my mouth?
Thanx for reading, though.
(Did you check out Durst's editorial? I think it's OK, if you promise to then come back to HuffPost afterwords. That guy is a riot!)
Theodore Roosevelt and Woodrow Wilson, both Progrssives sowed the seeds of the the US depression and Franklin Roosevelt, another Progressive spent us into a deeper depression and was rescued by Capitalists patriots in the WW II effort. Did we learn nothing from our prior failures or the failures that have been documented over the past 50 years and the current failures of the collectivists. Even China says we need to stop spending. Now that is irony.
In the Great Depression the stock market worked on 100 to 1 margin, in this last go around the banks were given around $100 for every $1 they had, it seems to me that that is some kind of magic disintegration point. 100 mythical dollars for every real dollar. I was taught in our fine schools that it was the banks that started the landslide into the depression by calling in 30% of there loans and making margin calls. Hey if I am wrong educate me.
http://www.thenation.com/article/36893/unjust-spoils
Now if the corporations want more control of the nation with absolutely NO accountability, well I'm afraid they are in for a fight! Already they own both houses in Congress. They are responsible for the depression that our nation is in,corporations are responsible for the deaths of 11 BP workers along with the destruction of the Louisiana wetlands and the Gulf of Mexico, corporations have been granted "personhood" by their lackeys on the Supreme Court, so what more could they possibly want?
No Mr. Hindery, President Obama has not been aggressive enough when it comes to the out of control corporations and most Americans know this! I am afraid unless he suddenly grows some, he will NOT be relected in 2012 and that will be his reward for being so "reconciliatory"!
- The Fed that kept interest rates too low for too long
- Freddie/Fannie that lowered lending standards to unsustainable levels
- Banking regulators that didn’t do their job
- Rating agencies like Moody’s that rated garbage CDOs as AAA
- Mortgage brokers that misrepresented loan details and applicant information
- Prospective homeowners that lied about their income
- Households that used their home equity as an ATM
- The very large group of households that went on a spending orgy and lived beyond their means
There is an ethics and value crisis in this country but it is across the board.
A loan portfolio that is closed to new loans, the CDOs and MDOs become liquidating portfolios. The delinquency rate increases over time even in good ecomonic times. In this case the delinquency rate increase has been exacerbated by the unknowns of the mortgages that had no historical base to forecast a liquidation rate. Some homeowners sell and buy new homes, some sell and move to apartments. The fact is that 10 years into a 30 year portfolio delinquency will be higher. Any one who had ever worked in lending could have told these pinheads in DC or the economists who did the analysis that this would happen.. Oh, they did, just no one listened. Progressives to the rescue-NOT.
The master-slave mentality of only seeking the biggest bang for the buck ignores the cycle of work-to user. It isn't rocket science. They still do not grasp that simple concept. I call that ignorance, The Midas Complex.
2. "Socialist" Germany has higher taxation than America, universal health care, a 7.7% unemployment rate, and 96 people per US dollar millionaire.
3. "Socialist" Switzerland has higher taxation than America, universal health care, a 3.9% unemployment rate, and 34 people per US dollar millionaire.
America has 107 people per US dollar millionaire and an unemployment rate of 9.5%.
So "socialist" Germany and Switzerland have more dollar millionaires per capita than America while all 3 "socialist" countries mentioned above have much lower unemployment rates than America.
Source: CIA World Factbook, The Economist magazine, and CapGemini World Wealth Report 2010.
I just want to say thanks for the heads up, it is fairly obvious that unbridled Capitalism is inevitably the most evil form of economy devised to date it is just lately that their greed has revealed just how ugly they are.
We need less consumption and more investment and production. The trade deficit represents consumption in excess of production as America buys products overseas for consumption. The only real long term solution to employment is to produce the things we consume here in America with products produced in America. Step two is to produce more products folk overseas want to buy.
The solution is simple. Kill the government's industrial policy designed to kill industrial production in America. This means deregulate manufacturing and reduce the permits required to start a business. One should not have to spend a year or more and millions of dollars on permits and environmental impact studies before a factory can be built and production can get started. Part two, end all the tax incentives to move jobs off shore, so the jobs stay here.
http://www.TheAngryGrapes.com
Reagan reduced taxes (for the rich) and started to get rid of regulation (finished off by Clinton and Bush).
How do you suppose that more of what you propose (the same as Reagan) will get us out of the mess those same proposals created?
Obviously you have learned nothing from history.