It was hard for this old progressive warrior to see President Obama go give a speech to the Chamber of Commerce. The Chamber was always conservative, but for the last 16 years (since a takeover in 1994 by a hard-right faction), it has become one of the worst institutions in America. With its tens of millions in anonymously funded and blatantly partisan attack ads; its far-right positions on health care, global warming, and taxes; and its blatant selling of its lobbying services for any company that wants to attack legislation but needs a front group, the Chamber has soiled its reputation almost beyond repair.
Having said that, I also think the president is the president for the entire country, and I have no problem with him meeting with anyone, even his political opposition. If I have no problem with Obama meeting with Boehner and McConnell -- which I don't -- I can't see why he shouldn't go give a speech to the Chamber. As long as he understands who they are, and how much damage they want to do to him in most other circumstances, speaking to them is no problem. The other thing is that speaking to them also gives him a chance to challenge them.
Did he do that enough in his speech? Not to my tastes, of course. I wish he would have banged on them -- directly challenging them on things like all the anonymous ads they ran in the 2010 cycle -- a lot more than he did. And I couldn't disagree more with Obama in his extended embrace of "free trade" deals that do damage to American workers and jobs. But there were two important times when Obama did make at least a nuanced argument in direct opposition to the Chamber's ideology. On neither point did he say enough, but I thought both were interesting.
The first is on the debate over regulations. Obama reached out to the Chamber on the issue of regulatory overhaul, but as in the State of the Union, he gave a relatively strong defense of some government regulations as being both necessary and actually helpful to the economy:
So we were just talking about regulations. Even as we eliminate burdensome regulations, America's businesses have a responsibility as well to recognize that there are some basic safeguards, some basic standards that are necessary to protect the American people from harm or exploitation. Not every regulation is bad. Not every regulation is burdensome on business. A lot of the regulations that are out there are things that all of us welcome in our lives.
Few of us would want to live in a society without rules that keep our air and water clean; that give consumers the confidence to do everything from investing in financial markets to buying groceries. And the fact is, when standards like these have been proposed in the past, opponents have often warned that they would be an assault on business and free enterprise. We can look at the history in this country. Early drug companies argued the bill creating the FDA would "practically destroy the sale of... remedies in the United States." That didn't happen. Auto executives predicted that having to install seatbelts would bring the downfall of their industry. It didn't happen. The President of the American Bar Association denounced child labor laws as "a communistic effort to nationalize children." That's a quote.
None of these things came to pass. In fact, companies adapt and standards often spark competition and innovation. I was traveling when I went up to Penn State to look at some clean energy hubs that have been set up. I was with Steve Chu, my Secretary of Energy. And he won a Nobel Prize in physics, so when you're in conversations with him you catch about one out of every four things he says. (Laughter.)
But he started talking about energy efficiency and about refrigerators, and he pointed out that the government set modest targets a couple decades ago to start increasing efficiency over time. They were well thought through; they weren't radical. Companies competed to hit these markers. And they hit them every time, and then exceeded them. And as a result, a typical fridge now costs half as much and uses a quarter of the energy that it once did -- and you don't have to defrost, chipping at that stuff -- (laughter) -- and then putting the warm water inside the freezer and all that stuff. It saves families and businesses billions of dollars.
So regulations didn't destroy the industry; it enhanced it and it made our lives better -- if they're smart, if they're well designed. And that's our goal, is to work with you to think through how do we design necessary regulations in a smart way and get rid of regulations that have outlived their usefulness, or don't work.
I also have to point out the perils of too much regulation are also matched by the dangers of too little. And we saw that in the financial crisis, where the absence of sound rules of the road, that wasn't good for business. Even if you weren't in the financial sector it wasn't good for business. And that's why, with the help of Paul Volcker, who is here today, we passed a set of common-sense reforms.
The same can be said of health insurance reform. We simply could not continue to accept a status quo that's made our entire economy less competitive, as we've paid more per person for health care than any other nation on Earth. Nobody is even close. And we couldn't accept a broken system where insurance companies could drop people because they got sick, or families went into bankruptcy because of medical bills.
That is not someone apologizing for the need to regulate just a wee little bit; that is a fairly robust argument in favor of an active regulatory role for the federal government. At a time in our country's history when Republicans and most business executives think of regulations as the ultimate dirty word, and a time when one of the biggest bank's spokesperson brags that "the bank CEOs have been collaborating with the Fed" on their regulatory policy, for the president to give that kind of vigorous defense in terms of the need for regulations in front of the Chamber is a very positive thing.
By the way, in case you didn't think you were reading that quote right because a bank spokesman couldn't possibly be that arrogant, or that perhaps I was taking it out of context, you are wrong. The Bank of America and their CFO Charles Noski really did happily admit that the biggest bank CEOs "collaborate" with regulators on their regulatory policy, in this case on the swipe-fee issue, an issue I have been following closely while working with retailers and consumer groups. Hopefully the Fed will "collaborate" just as closely with all the small businesses and consumers impacted by swipe fees as they are doing with bank CEOs. This is the environment we are in right now, though; bankers feel no need to hide their blatant attempts to seduce and capture regulators. Given that environment, the president standing up for certain strong regulations is a very positive thing.
The second area of the president's speech that I loved was about the social compact. When I first heard that Obama would be speaking to the Chamber, as soon as I stopped cursing, my first thought was this: I hope he makes the case for the social contract, or as he called it, compact. That old but still central idea, totally rejected by the kind of selfishness-is-a-virtue, Ayn Rand conservatives who dominate in too many corporate board rooms and the modern Republican Party, is that there is contract between our country's citizens, government, and private sector, that much is given to each of us but much is required in return. As President Obama said:
But we have to recognize that some common-sense regulations often will make sense for your businesses, as well as your families, as well as your neighbors, as well as your coworkers. Of course, your responsibility goes beyond recognizing the need for certain standards and safeguards. If we're fighting to reform the tax code and increase exports to help you compete, the benefits can't just translate into greater profits and bonuses for those at the top. They have to be shared by American workers, who need to know that expanding trade and opening markets will lift their standards of living as well as your bottom line.
We can't go back to the kind of economy and culture that we saw in the years leading up to the recession, where growth and gains in productivity just didn't translate into rising incomes and opportunity for the middle class. That's not something necessarily we can legislate, but it's something that all of us have to take responsibility for thinking about. How do we make sure that everybody's got a stake in trade, everybody's got a stake in increasing exports, everybody's got a stake in rising productivity? Because ordinary folks end up seeing their standards of living rise as well. That's always been the American promise. That's what JFK meant when he said, "A rising tide lifts all boats." Too many boats have been left behind, stuck in the mud.
And if we as a nation are going to invest in innovation, that innovation should lead to new jobs and manufacturing on our shores. The end result of tax breaks and investments can't simply be that new breakthroughs and technologies are discovered here in America, but then the manufacturing takes place overseas. That, too, breaks the social compact. It makes people feel as if the game is fixed and they're not benefiting from the extraordinary discoveries that take place here.
So the key to our success has never been just developing new ideas; it's also been making new products. So Intel pioneers the microchip, then puts thousands to work building them in Silicon Valley. Henry Ford perfects the assembly line, and then puts a generation to work in the factories of Detroit. That's how we built the largest middle class in the world. Those folks working in those plants, they go out and they buy a Ford. They buy a personal computer. And the economy grows for everyone. And that's how we'll create the base of knowledge and skills that propel the next inventions and the next ideas.
The president didn't challenge the Chamber, or the American business community, enough in his speech. I sure would have banged on them some for sleazy anonymous attack ads paid for by secretive, and possibly foreign, corporations. I would have been more direct in my criticism of too many companies not creating more jobs while making record profits last year, and in outsourcing jobs and escaping taxes through phony offices in foreign countries. But it was good to see him make a strong case for the role of regulation, and for the importance of the social contract. To go before a group like the Chamber and make those arguments required some guts, and I appreciated that he did it.
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