Mort Zuckerman's recent opinion piece in the Financial Times, "Obama needs to stop baiting business," is a tawdry, sorry spectacle. Paul Krugman's already explained how Zuckerman, the publisher of US News & World Report and the New York Daily News, distorted the President's words with a little Andrew Breitbart-style editing. While Zuckerman's proclivity for truth-twisting isn't a complete surprise, here's what is: If he's not lying about how he and his fellow CEOs are managing their businesses, then he and his friends are also incompetent executives.
In fairness to Zuckerman, let me be clear from the outset: I don't think he's an incompetent executive.
That would mean he's not telling the truth when he says that, for "employers" -- that is, CEOs like Mort Zuckerman -- "worries over taxes and increased costs of new regulation are holding back investment and growth." Here's the implication of that statement: Businesses would hire and invest if not for Democratic policies. They have customers who want to buy, but they won't meet the demand because they're afraid of some hypothetical tax increase or new regulation.
The logic is ridiculous. Zuckerman's saying that corporate executives are refusing to make money because the President scares them. Any executive who misses an opportunity to make money should be fired on the spot.
Zuckerman's reportedly a friend and mentor to Daniel M. Snyder, owner of the Washington Redskins. Their "lack of confidence" didn't prevent Snyder from picking up Donovan McNabb, or Trent "Silverback" Williams, or new coach Mike Shanahan. They're all big-ticket items. The Redskins - who were my hometown team long enough for me to develop a lifelong Dallas Cowboys allergy - are the second-highest grossing team in football, and I'll bet even a close friendship with Mort Zuckerman won't prevent Snyder from hiring all the vendors he needs to feed the fans.
The climate of fear Zuckerman describes is a hoax. To hear to him tell it, the titans of American enterprise are tremulously quivering in their boardrooms, unable to summon the courage to make money today because of what might happen tomorrow. In the real world, if CEOs really believed they were about to be buried under new taxes and regulations, they'd hire and invest like crazy so they can post as much profit as they can before the Bolsheviks seize the means of production.
Zuckerman's talking points echo those of a recent Fareed Zakaria piece (which we discussed here) in which he Zakaria allegedly interviewed a series of CEOs about the business environment. They all spoke with one voice ... a voice curiously like Fareed Zakaria's ...saying that they, like Zuckerman's cohort, had "lost confidence" in the President.
Which means that at one point they had confidence in the President. But, where Zakaria's alleged informants remain anonymous, Zuckerman drops a few organizational names: The Business Roundtable, the US Chamber of Commerce, and the National Federation of Independent Business. These are the places where, says Zuckerman, "disillusion has spread."
The Business Roundtable and the US Chamber are shills for large corporations - and, in the memorable words of JPMorgan Chase CEO Jamie Dimon, "large corporate America is in very, very, very, very good shape." It's hard to give much credence to Zuckerman's claims that these groups are "disillusioned" and have "lost confidence," since there's no evidence they had illusions or confidence about Obama in the first place. Zuckerman's allegiance is clearly to these large businesses, too - and to Jamie Dimon, since Zuckerman serves on JP Morgan's National Advisory Board.
By choosing the National Federation of Business (NFIB) to represent smaller employers, Zuckerman decided to select a small business organization that stands to the right of many others. NFIB broke with the Main Street Alliance, a national network of small business groups, over that organization's support for health reform. Polling by groups like Small Business Majority paint a different picture of the business attitude toward Democratic policies. But even NFIB can't maintain the facade Zuckerman would have them maintain. It publishes a monthly "Optimism Index," precisely the kind of "confidence" indicator you would think interests Zuckerman. Despite the NFIB's fierce antigovernment rhetoric, the actual figures in their latest report (July 2010) belies their own argument (and Zuckerman's): Only 12% of respondents based their negative "expansion outlook" on the political climate, while 43% attributed it to "economic conditions."
Utimately, even the right-wing rhetoricians who summarized the NFIB survey's findings were forced to acknowledge the obvious: "What businesses need are customers, giving them a reason to hire and make capital expenditures and borrow ..." That's exactly right, the opposite of the conclusion Zuckerman would have us draw about the marketplace. Which raises the question, "Who put the 'fib' in NFIB?"
What medium and small businesses also need is credit. As the NFIB survey reports, "regular NFIB borrowers .. (are) at a record low (and) continued to report some difficulties in arranging credit." That's not surprising, given that bank lending to small business has fallen 9% since TARP began. And Republicans supported by the US Chamber and the Business Roundtable just blocked a $30 billion program to aid lending to small businesses, even though they and not the Zuckerman/Chamber/Roundtable large businesses, are the engines of employment growth.
Zuckerman says some other silly things, too. He says "America's get-up-and-go entrepreneurial culture outlived the frontier," even though he represents the kinds of big business/government combines that attacked small businessmen and ranchers on our frontier. If we're all actors in a 21st Century Western, Zuckerman is speaking for the bad guys.
Zuckerman pushes some other old, tired right-wing canards, too. He says it's not fair that people "lay all the blame for our difficulties on the business community and the financial world. This quite ignores the role of Congress in many areas, most glaringly in forcing Fannie Mae, Freddie Mac and the Federal Housing Administration to make loans to people who could not afford them." He's saying that the real problem is that liberals forced reluctant financiers to sell mortgages to low-income, unqualified black and brown people. Unfortunately for Zuckerman, the highest rate of mortgage default is for homes worth more than a million dollars. Oops.
There's more silliness, but you get the gist.
Want to know who corporations have really lost confidence in? Banks. The Wall Street Journal reported that "In the darkest days of late 2008, even large companies faced the threat that they wouldn't be able to do the everyday, short-term borrowing needed to make payrolls and purchase inventory." One of the reasons companies keep cash on hand is out of fear that could happen again. And it could -- if anti-regulation types like JP Morgan Advisory Board Member Mort Zuckerman get their way.
It's understandable when CEOs like Zuckerman push for the lowest taxes they can get. That's their job. But Zuckerman's s a newspaper and magazine publisher, and he shouldn't be allowed to let journalistic integrity become another one of those "damaged traditions" he claims to lament. Zuckerman and his fellows mega-corporate leaders seem to have adopted the dishonest, cut-and-paste deception of the extreme Right. They're beginning to sound less like titans of industry and more like Tea Partiers with private jets. Remember, those private jets are purchased with company profits - profits that Zuckerman claims are being left on the table because of a lack of "confidence," as in "I'm scared." That kind of fear-driven leadership would be nothing more than managerial incompetence.
And I don't think Mort Zuckerman is incompetent.
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light.
He can be reached at "firstname.lastname@example.org."
Website: Eskow and Associates
How will Donald Trump’s first 100 days impact YOU? Subscribe, choose the community that you most identify with or want to learn more about and we’ll send you the news that matters most once a week throughout Trump’s first 100 days in office. Learn more