June 15, 2009
An Anti-Business President At The Helm?
Fred Barnes: In Barack Obama's View, Profit Is Without Honor
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Video Obama Pushes Credit Card Reform President Obama is pushing for credit card reform to help the millions of Americans who can't pay their bills. David Mark, Sr. Editor for Politico, discusses the latest from Washington.
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President Barack Obama (AP)
Is President Obama anti-business? The obvious answer is yes. Yet he insists he's a free-market guy who hates "meddling in the private sector" but has been forced to. So in deciding whether he's anti-business, let's be fair and judge Obama by nonideological and nonpartisan standards. I have four criteria: his appointments, his policies, his decisions, and his own words.
Democratic presidents are not famous for appointing businessmen, merchants, or entrepreneurs to their cabinet or senior White House staff. These are people who have started or run private businesses, created jobs, met payrolls, and made profits. Thus they might be sensitive to how government can help or hurt business enterprises, especially during an economic downturn.
The number of such people appointed by Obama: zero. Members of his cabinet and White House staff come predominantly from government, academia, think tanks, and the law. True, several were business consultants, Defense Secretary Bob Gates and Veterans Affairs Secretary Eric Shinseki served on corporate boards, and White House chief of staff Rahm Emanuel spent four years as an investment banker between government jobs.
But there's no one who ran a company, hired or fired workers, or was an entrepreneur. Obama doesn't qualify either. He worked as a lawyer, law school instructor, and community organizer. As a community organizer, he did many things, but starting a profit-making business and creating jobs weren't among them.
Now it's unfair to conclude solely on the basis of Obama's personnel decisions that he's anti-business. But his administration clearly isn't a hotbed of free marketers--quite the opposite. If any appointees sympathize with business and appreciate how free markets work, their influence has been minimal.
Second, policies. When Obama announced last week the acceleration of his economic "stimulus," he was referring only to programs run or funded by the federal government. He offered nothing, not even a tiny tax incentive, to encourage investment in business and private job creation. This reflects Obama's policy initiatives across the board. They rely entirely on more government spending, regulation, and control. Obama would dramatically expand government's role in health care, energy, the environment, education, and much more. His "five pillars that will strengthen our economy" consist of spending programs, regulation of Wall Street, and imaginary deficit reduction. There's no role for business.
No doubt Obama would love to see the business community produce more jobs. But he and his congressional allies have done nothing to promote this and quite a bit to restrain it, despite the job-killing recession. This amazed Richard Posner. "Re-regulating banking, hauling bankers before congressional committees, passing laws tightening credit card lending, and capping bonuses all impede recovery," he wrote in the Wall Street Journal. "All that is for later, once the economy is back on track."
Never accuse Obama of rejecting incentives. He favors them, just not for investors and business. In his town hall meeting in Green Bay, Wisconsin, last week, he said health insurance plans "should have incentives for people to use preventive services." And he praised "financial incentives" for healthful living. "If you lose weight, you will see an incentive, money in your pocket."
The third criterion is decisions made in carrying out a policy. Take the matter of propping up General Motors and Chrysler. Rather than follow a free-market approach and allow the auto companies to sink or swim on their own, he's kept them alive with taxpayer subsidies and at the expense of their investors, a.k.a creditors. Fine, but he went on to punish GM and Chrysler investors and reward the United Auto Workers, a financial backer of Obama's presidential campaign last year.
We also saw last week how Obama is handling the case of Delphi, the bankrupt auto parts manufacturer funded mainly by GM. His Auto Task Force brokered the sale of Delphi to a private equity firm, absent an auction or open bidding. This, in effect, put Obama in the leveraged buyout business. Lenders to Delphi complained, and a judge ordered an auction.
Once it intervenes, the Obama administration invariably seeks to extend its control. After bailing out banks, Obama sought authority to seize any financial institution whose collapse might be "a systemic risk" to the economy. The Obama administration would decide if there's such a risk.
And now that troubled banks are paying back some of the bailout money, Treasury Secretary Tim Geithner was asked recently by Senator Jim DeMint of South Carolina if those funds would be saved. Not quite, Geithner said. The administration retains the right to use an equal amount in future bailouts, he said.
Finally, what has Obama said as president about business and free markets? Not much that's favorable. In Green Bay, he said doctors who order more tests for patients because they get paid more reflect "a business mentality"--a comment that suggests what Obama thinks of business in general. By contrast, he spoke of "a mentality of, how do we make patients better?" Weeks ago, he denounced Chrysler creditors as "speculators" who refuse to sacrifice as they should.
As best I can tell, Obama loathes the profit motive or at least what he thinks it causes. He's often referred to the years prior to his election as "an era of selfishness and greed." It's not surprising he's capping the pay of CEOs whose firms took bailout money. But he's also studying "the ways in which the means and manner of executive compensation contributed to a reckless culture and quarter-by-quarter mentality that in turn have wrought havoc in our financial system." To decipher that, Obama thinks high CEO pay spurred the economic dip.
The president's commencement address at Arizona State University in May, largely ignored by the media, was suffused with animus toward the profit motive. He said those who seek "short term gain" display "a poverty of ambition." And he characterized "the formulas for success that have been peddled so frequently in recent years" this way:
You're taught to chase after all the usual brass rings; you try to be on this "who's who" list or that top 100 list; you chase after the big money and you figure out how big your corner office is; you worry about whether you have a fancy enough title or a fancy enough car through material possessions, through ruthless competition pursued only on your own behalf -that's how you will measure success.
That's a brutal caricature of the way most people seek to get ahead in life, support a family, and gain financial security. Obama did tell business majors to "go start a company," then quickly added, "Or why not help our struggling nonprofits find better, more effective ways to serve folks in need." It's clear which path Obama prefers.
Given the evidence, rendering a verdict on Obama and business is easy. Anti-business may be too crude a label. But this we can conclude: Obama doesn't trust free markets, he prefers government over business, he thinks Americans are too concerned about money, and he has a dark view of profits. A follower of Adam Smith, he's not.
By Fred Barnes
Reprinted with permission from The Weekly Standard
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See all 30 CommentsThis excess money going into fewer and fewer hands has led to a government for sale, excess deregulation (especially in offshore and international accounts), and, frankly, Great Depression II. It means that NEITHER party is anti-business. There's just the pro-business party and the RABIDLY-GO-GO-CORPORATIST party. Nowhere is this more obvious than in healthcare reform, where NEITHER party is promoting the obvious solution, and one adopted by nearly all our capitalist trading partners, the one that would save us $400 billion a year (immediately) in administrative costs, which is single payer. Even the PROGRESSIVE wing of the 'anti-capitalist' party, which once smiled on single-payer, has been bought off and now frowns on it. This is the final result of 40 years of corporate welfare: the country is now officially a corporatocracy, NOT a democracy. And nowhere is that plainer than in the fact that the healthcare solution that polls say 70% of the people want is NOT EVEN IN CONSIDERATION by our 'peoples representatives'.
Hang it up Barnes--you're ancient history, and irrelevant to boot.
There is such a thing as earning an honorable profit which keeps the company going and results in jobs and pay raises, BUT the line between profit and GREED has been blurred by the Republicans and by Wall Street.
When Jesus was conducting His ministry, he had a small treasury that hardly had any money in it, and who was it he put in charge of that treasury? JUDAS!!!!!!
HAIL OBAMA?????
What exactly is an 'honorable profit'? What's the margin? Is 7-9% too much (like what the oil companies make)? Is 40-50% too high (like what the big computer companies make)? What about the margins that Microsoft makes? Is it fair that they make so much money? What about Oprah? Is it fair that she make BILLIONS sitting on a couch talking to people?
I've been in the workforce for 30+ years and have yet to work for a poor person. Profit is good. It's Greed that is bad - there's a difference...
Don't be so quick to blame the Republicans for all our troubles. There's enough blame to go around...
It took Yahoo! about 10 years to turn their first profit. In the meantime, they hired over 10,000 employees.
You talk about RESPONSIBILITY - "If you promote spending money you don't have, buying things you can't afford, you will pay in the future." Do you think this administration knows that? Isn't BHO spending like a drunken sailor? 600 BILLION in NEW taxes in order to pay for his TRILLION dollar 'Healthcare'. BHO truly believes that if you have your health you have everything - that's because we'll have nothing left! He'll tax the crap out of everyone - even the unborn of the unborn! Even the CBO can't verify his numbers - which is why he's going to use the White House numbers. Now there's transparency we can believe in...
Do you think BHO wants the regular person to get ahead? Remember when Joe the plumber asked him that? BHO said "I just want to spread the wealth around." Yep - that sounds like he wants the 'regular' guy to get ahead. Only he decides who is 'regular' and how much he'll take.
Please do us all a favor - grow up and pull your head out of your Obama!
don't you ever tire of this crap? What writting this stuff day after day must do to your mind..well I don't have to imagine; it's on display right here. Fred Barnes is crying for Bush and the Bush policies. He's like one of three people in the country still missing his old pal.
No, that is NOT what that means. It means that, with CEOs, playing with other people's money is not a win-or-lose proposition, it's a win or break EVEN deal with no risk to them. They have a great incentive to take risks that they would find personally unacceptable, but since it isn't their money, we get a "what the heck" attitude. With hundreds of tangled, indecipherable derative deals, and arrogance that would make a Caeser or Pharoh blush, small wonder the industry went down the toilet and took the rest of the economy with it. Barnes himself would do well to get off of his soapbox and go get a real job for a couple of years - he might learn something.
It's just so easy to be hateful and nasty because somebody else has something you don't and you want it and think you have the right just to DEMAND that somebody else work and hand it to you.
If you want it, get up and earn it, or else be satisfied with your own stagnation.
Well, NO, it wasn't. Where we went wrong was to start supporting lazy bums that won't educate themselves out of poverty and just started throwing money at them instead of making them take care of themselves.
It's just so easy to be hateful and nasty because somebody else has something you don't and you want it and think you have the right just to DEMAND that somebody else work and hand it to you.
If you want it, get up and earn it, or else be satisfied with your own stagnation
I vote we just stick a pen in the rich guys hand make him write a check. If he refuses we tie him to an innertube and push him out to the 7 seas. In response to what you have written as far as I know an education costs alot of money. Money we do not have. I would like to have an education but there is no way to get one.
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