President Obama's off-the-cuff remark that the "private sector" is "doing fine" wasn't so much a misstatement as a rare admission that despite his anti-Big Business rhetoric, White House policies to date have brought record profits to Wall Street and corporate America while leaving most of Main Street dangling on a string.
His remark -- and his awkward attempt hours later to "walk it back" -- also reflect a deep underlying tension between the progressive and conservative wings of the Democratic party and a corresponding tension in the way that the White House is positioning Obama in a neck-and-neck political race with GOP candidate Mitt Romney that culminates in fewer than 150 days.
On the one hand, Obama wants to convince mainstream American voters -- the nation's beleaguered "middle class" -- that he's on their side, and that the nation's economic problems, including widening income inequality, are a reflection of the staunchly pro-business policies favored by his Republican predecessor and the current GOP.
On the other hand, Obama also wants political credit for having staved off a second Great Depression and for having restored a favorable domestic investment climate -- even if he largely accomplished these feats by pursuing economic policies even more "pro-business" than those of George W. Bush.
Can the president really have it both ways?
Perhaps, but only if Main Street is seeing benefits on par with Wall Street. But with job growth sputtering, and the jobless rate still hovering well above 8 percent, time is running out. Obama now faces the bumpiest road to reelection of any incumbent president since Jimmy Carter in 1980. And the entire Democratic party is teetering on the edge of panic, with some former high-level supporters defecting to the GOP, while a string of top surrogates, from Newark mayor Cory Booker to former president Bill Clinton, speaking out in thinly-veiled defiance.
How "pro-business" a president has Obama turned out to be? Corporate after-tax profits, at $1.7 trillion, already far exceed the historic high ($1.3 trillion) reached under George W. Bush in 2007. And Wall Street banks, whose unregulated speculation precipitated the stock market crash and drained the nation's wealth, are booming again. Obama not only bailed out the banks, on generous terms, but at the urging of Treasury Secretary Timothy Geitner he failed to extract significant concessions, squandering his enormous leverage.
Partly as a result, even the Dodd-Frank bill, touted as a major step forward in financial regulatory reform, provides only limited added transparency and does little to restrain the banks from future excess, leading experts to predict that another major financial crisis could be only a matter of time.
Obama, despite his populist rhetoric, also backed a private sector approach to health care reform. Not the completely "privatized" survival-of-the-fittest reform agenda advocated by Republicans, of course, but not the fully socialized single-payer "public option" strategy advocated by his base, either. Obamacare's biggest economic winner is the private health care industry, especially insurers who managed to convince the president to embrace the individual mandate, which guarantees insurers millions of new health care consumers -- and with them, the opportunity to reap millions of dollars in new profits.
Won't most Americans also end up with cheaper, more affordable health care? It depends. In the short term, probably. But once market forces really come into play starting in 2014, people with employer-based coverage may well lose it, and insurance premiums could well rise, not fall. Over time the cost of health care for the middle class could actually rise, vitiating one of the chief rationales for Obamacare. Either way, private industry will end up the big winner.
Another area of massive Obama support to the business sector is energy. Here again, GOP rhetoric, attacking Obama as a "big government," "anti-free market" president, has tended to obscure the reality of the president's policies. For example, "big oil," a favorite Obama target of late, has never had it so good. Domestic oil production has expanded dramatically since Obama took office, including vastly expanded offshore drilling and unprecedented new explorations into the hitherto sacred Arctic Reserve.
Obama has certainly tried to balance his pro-oil policies with greater concern for their environmental costs, as well as a greater reliance on "renewable" energy sources, including solar and wind power. However, he has also dramatically expanded bio-fuels and natural gas exploration, in effect, vastly expanding the energy private sector. One recognized expert, writing in the Houston Chronicle last year, called Obama "our most pro-energy president in decades."
And finally, let's not forget Obama's enthusiastic embrace of free trade. The historic US-South Korea free trade agreement passed last year easily rivals the NAFTA agreement of 1993 in its potential scope and importance. On paper, the agreement suggests that South Korea will be buying a lot more US automobiles -- and, in fact, the US auto industry, thanks to Obama's 2009 auto bailout, is booming again, with GM recording record profits.
However, the effect of the new free trade agreements on US labor over time could well be devastating. When Obama secured the bail out, he saved 1.4 million jobs -- but to secure the deal, labor bargained away most of its rights, and real wages -- which are continuing to decline nationally -- are likely to fall in the auto sector, too.
It's not clear what the president's high-level critics would have him do, but the message seems to be that Obama's "class warfare" anti-business rhetoric is antagonizing potential financial backers and undermining Obama's ability to break through with suburban independent voters. It's also weakening the position of House and Senate Democrats facing their own tough re-election battles, so much so that a growing number are distancing themselves from the president.
Obama seems increasingly trapped politically. By alternately extolling and lambasting the business sector, he's left himself vulnerable to GOP. charges that he's "anti-business." He's also ceding the mantle of successful economic stewardship and forward-looking vision that his record, on balance, reflects.
If this keeps up, don't be surprised if more voters turn to Romney's breezy optimism and hollow constancy as a welcome relief from a president who seems besieged and adrift, and increasingly confused about what his real message is.
Mike Lux: Bad Week for Bain-onomics
 |
 |
|
| Obama | Romney | |
|---|---|---|
| Electoral Votes (270 to win) |
332 | 206 |
| Obama | Romney | |
|---|---|---|
| Total | 65,899,660 | 60,932,152 |
| Percent | 51.1% | 47.2% |
| Democrats* | Republicans | |
|---|---|---|
| Current Senate | 53 | 47 |
| Seats gained or lost | +2 | -2 |
| New Total | 55 | 45 |
| Democrats | Republicans | |
|---|---|---|
| Seats won | 201 | 234 |
The "private"sector is not doing fine, because the private sector is not simply the CEOs and Wallstreet, the "Private Sector" also includes "Mainstreet", and mainstreet is hurting badly right now, and Obama is to blame.
His "tax the rich" mantra stifles business and increases unemployment, business owners are NOT hiring, they do not know one day to the next if they are going to be taxed & regulated, to the point of destruction. No business owner is going to expand as long as the unknowns of Obamacare costs are there, nor are they going to hire while Obama is threatening to tax them simply based on their success. Obama's "tax the rich" has been a moving target from the start, one day it is a $1 million target, then $500k, then $250k, $200k, and the changes go on, As a business owner seeing this moving target combined with environmental regulations popping out of DC without warning from an Obama EPA that makes up rules as it goes, I am going to sit on my capital. If I am making $100k, I am going to wonder when he'll drop the limit down to include me in his definition of "rich". Until this uncertainty and uncertain President are gone, I won't be hiring anyone, and only when certainty returns to the system will I go back to business as usual, and start hiring.
He was completely correct worrying about the public sector. I wish he'd use the bully pulpit more - if he'd just say that hiring more public sector workers, like Reagan, Bush I and Bush II all did, would give us an unemployment rate just over 7% and the GOP is the one that's been systematically cutting government jobs, it would be a start...
This is where he, and you, fail.
The "private sector" IS Main Street. It's shoe stores, and hot dog carts, and steak houses, plumbers, and delivery folks.
Huge "private sector" corporations may do doing fine, but the REST of the private sector ISN'T.
The view on insurance companies and the invidual mandate is a good example. Insurance companies twisted the arm of a president who is supposed to be so confident and has all the answers? How about a little dose of the real world. Everyone with a brain would know that you have to have the mandate to make the scheme work, otherwise healthy insureds would get huge rate increases after un-healthy folks without insurance were let in the system. We need the healthy people without insurance to come in too. If there is no individual mandate and you can get insurance when sick,,why would you pay for insurance when healthy? If the supreme court strikes down the mandate the whole scheme falls like a house of cards.Duh.
As you may recall, Obama campaigned against the mandate, and called for a "public option." it was left unclear how he planned to fund it. But after he won, yes, he saw the light. Tom Daschle, who had amassed a small fortune representing the health insurance lobby since he lost his Senate seat in 2004, was one of the high-level Democratic emissaries sent to Obama to convince him to reverse his opposition - and to support the mandate.
It's not clear that the system falls apart if SCOTUS only strikes down the mandate based on the Commerce Clause. Too many sections of the law are extremely popular, and Congress will likely have to find a way to preserve the law. The provisions in the law governing repeal are highly onerous to say the least. Repeal can't just be done with a stroke of a pen, or a vote by Congress.
In any event, the mandate doesn't account for all of the funding for Obamacare.
Although unusual for the feds to step on the what is normally under the regulatory power of the States (small group and individual - fully insured health insurance) you could easily keep the "popular" pieces of healthc care reform, i.e., - 100% coverage for preventative care and coverage to age 26, etc,,that can easily be kept without the rest of the legislation. Covering everyone who is not covered, especially those with pre-ex conditions, unfortunately I cant see a way to do that without a mandate. In Minnesota we have had 100% coverage for preventative care and dependant coverage to age 25 and many other provisions found in the federal health reform for over 20 years. So here it is not that big of a deal. We also have non - profit insurance companies only. Thanks.
This is the direct result of President Obama trying to be all things to all people at all times.
It is the end result of compromise. Not in a political sense but in terms of belief and integrity.
While Romney is flogged by the punditry for his flip flops, the only apparent difference between a Romney flip flop and an Obama one is that Romney had a track record to judge by.
Obama has flipped and flopped his way through most of his first term sending shock waves of uncertainty through the economy with fear of tax increases, unsure energy policies and mixed messages on everything from war to the legalization of marijuana.
To date, there are few concrete policy matters that anybody could attribute to President Obama and with a 3+ year track record of fleeting convictions and populist rhetoric minus tangible results his election chances are dwindling daily.
The president of course thinks about this exactly backward, and he would be right if we did not already have a record of deficits that ballooned under Bush.
You mean the "Politically-Connected Big Business Private Sector Management" - not the remaining 99% of the private sector.
A couple that went from 130,000 a year to 15,000 a year and is voting for Romney probably sees a greater likelihood for reduced uncertainty under a new regime. In that respect, they are not voting against their own best interests. They probably have a much more realistic view of the complexity of our economic situation than you do. If you truly (and mistakenly) believe our problems of decades-long credit expansion, financialization and globalization came about simply "because of People like Romney", then your logic makes sense. Otherwise, it doesn't.
I understand that Obama did not make things better fast enough, and I am one of those on the left that hates the way he is always tacking to the center as soon as the first Republican wind blows. But to forget, in just 3 or 4 years, who got us into this mess, and to refuse to see the Repubs for the obstructionists they are, is maddening.
http://www.mediaite.com/tv/david-letterman-to-brian-williams-what-more-do-we-want-obama-to-do-for-us-honest-to-god/
We live in a capitalist system and both parties and their representatives are part of this system. At best, we have two different versions of how to manage this system - with Obama's reflecting more balanced growth and benefits. However, you still have to get private business to act of its own accord, to make the outlays to create more jobs, not simply reap the windfalls they are reaping now, on the basis of largely the same work force.
Obama's policies have gotten the country out of a recession faster than any administration previously has. We have seen more job growth in 3 years than George W. Bush created in 8 - by a factor of about 4. However, he also raised expectations of a recovery very high when he took office, and he is suffering the consequences of having gotten to year 4, and finding that he hasn't managed these expectations well.