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Sanjay Sanghoee Headshot

Will President Obama Please Stand Up to the Business Sector?

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Anyone who reads my blogs knows that I am a Democrat. They also know that I am a big supporter of President Obama. I do not agree with him on everything, but I believe that he is doing the best job that he can under extremely trying circumstances and against an unprecedentedly mean and morally bankrupt opposition.

Despite this, however, I am deeply disappointed in the president's latest move to exempt businesses from paying a fine if they do not provide health care coverage for their employees till 2015. It is an unnecessary gesture towards a constituency that would not be satisfied even if he reduced their obligations to zero, and an indirect acknowledgement of the power of money.

Obamacare was a necessary measure in the face of exploding healthcare costs, widespread corruption in the insurance business, and exorbitant greed on the part of big drug companies, medical device manufacturers, hospitals, employers, and even some doctors. It was not a whimsical law passed for the sake of passing a law but the next stage in our evolution as an advanced nation. And Obama, whose name is now indelibly attached to the law, should stand firm in the face of naysayers and back up his achievement to the fullest. There is no need for compromise and no need for back-tracking, regardless of what some feckless Republican Governors might threaten.

But then that is the strange track record of this administration. When they are good, they are great, but when they are bad, they are awful.

A while ago, when the Supreme Court was about to rule on the constitutionality of the healthcare law, I wrote a piece that advocated the public option. In my opinion, the public option would have made a real difference to the skewed healthcare system in our nation. By providing real competition to the insurance companies, and by extension healthcare providers who thrive on the inefficiency of the system, the White House would have been able to rein in excessive greed and abusive practices. However, the public option was dropped almost immediately in response to pressure from the insurance lobbies.

That was the first big mistake of the Obama administration. The second is the one that the president is making now, offering businesses a Get-Out-of-Jail-Free card for no better reason than because he wants to be perceived as a friend of the business community. In the political world, that might still make sense, except that just a few weeks ago, Federal Reserve Chairman Ben Bernanke announced that the Fed will likely raise interest rates because the economy is much healthier than it was before.

Let's look at that again in slow motion.

The economy is recovering and healthier than it was before, so the Fed is willing to raise rates, but if the economy is so strong than why does the White House need to offer the business sector a break on Obamacare? It is an irrational and indefensible decision that will jeopardize the welfare of the people that the Affordable Care Act is meant to serve - those not covered by health insurance.

It is bad enough that the architects of the subprime mortgage fiasco, despite wiping out 39 percent of our nation's wealth and nearly destroying the global economy, are still not in jail for their blatant fraud and were even allowed to keep their ill-gotten gains; it is bad enough that the ratings agencies and market watchdogs who ignored their responsibility were never really taken to task; it is bad enough that the Dodd-Frank financial reform bill is being gutted by the banking lobbies; it is bad enough that the top 1% of Americans own 40 percent of our national wealth, the US has the highest level of income inequality in the world, major corporations game the tax system every chance they get, and employers routinely make end-runs around the minimum wage... but now we also have to tolerate an olive branch to CEOs and business owners who are more likely to pocket the savings from the Obamacare extension than to invest them back into their companies?

I recognize the need for pragmatism, but this is not that. This is capitulation to people who are hijacking our economy, and it is time that Barack Obama, a man whom I deeply respect and admire, stopped letting himself be bullied by powerful business interests and showed them who is really in charge.

SANJAY SANGHOEE is a political and business commentator. He has worked at leading investment banks and hedge funds, has an MBA from Columbia Business School, and is the author of two financial thrillers, including "Killing Wall Street", a fast-paced book about an ordinary citizen's revenge against corporate greed. For more information, please visit www.killingwallstreet.com