Back in early 2008 when the primaries were heating up between Hillary Clinton and Barack Obama, a friend with contacts in high corporate places whispered a secret in my ear. The secret he told: Money sources will tighten and corporations will hoard cash in an effort to make whichever Democrat is elected a one-term wonder.
At the time I shook it off as wishful thinking. After all, he's one of those corporate guys, and saw the handwriting on the wall. Knowing he wouldn't get another Republican administration for awhile (If I had my way, it would be forever), he was just whispering silly scare threats in my ear to suppress any enthusiasm I might have had for a Democratic President.
Fast forward to July, 2010 and his words practically scream at me. Anyone who doubts what is happening in this country right now should go read Fareed Zakaria's column about why corporations are hoarding cash. Hoarding to the tune of nearly 2 TRILLION dollars, by the way.
Economic uncertainty was the primary cause of their caution. "We've just been through a tsunami and that produces caution," one told me. But in addition to economics, they kept talking about politics, about the uncertainty surrounding regulations and taxes.
Note to those who insist on Obama's corporatist stature: Corporations aren't happy. They're kind of angry, actually, because after all the years of freedom from regulation, they're being regulated. And they're being regulated by a Democratic administration, which means they're actually being effectively regulated.
Some have even begun to speak out publicly. Jeffrey Immelt, chief executive of General Electric, complained Friday that government was not in sync with entrepreneurs. The Business Roundtable, which had supported the Obama administration, has begun to complain about the myriad laws and regulations being cooked up in Washington.
Awww, and listen to what they're saying:
One CEO told me, "Almost every agency we deal with has announced some expansion of its authority, which naturally makes me concerned about what's in store for us for the future." Another pointed out that between the health-care bill, financial reform and possibly cap-and-trade, his company had lawyers working day and night to figure out the implications of all these new regulations.
Now, the CEOs have some core beliefs, and Obama just doesn't fit the mold of the corporate go-to in the Oval Office for these guys.
But all think he is, at his core, anti-business. When I asked for specifics, they pointed to the fact that Obama has no business executives in his Cabinet, that he rarely consults with CEOs (except for photo ops), that he has almost no private-sector experience, that he's made clear he thinks government and nonprofit work are superior to the private sector. It all added up to a profound sense of distrust.
To restate their concerns: There are no CEOs in his cabinet, he has no private sector cronies, and he believes in good government. See? Those are core Democratic values. Republicans, on the other hand, worship at the Altar of the Bottom Line, think CEOs should run the country and the world, and DROVE US INTO THE DITCH WITH THEIR BUDDIES CHENEY AND BUSH.
Anyone who thinks the unemployment situation is a product of poor governing on the part of this President can't recognize a class war when they see it. The real issue on the table here is corporate power and control.
Consider the recent Luntz-style attacks on the unemployed. Rather than addressing the reasons for the stubbornly high unemployment rate, they choose to demonize those who are unemployed. We're too stupid, too lazy, or we want to be paid too much to rehire.
Of course, none of these things are true, but they offer cover for CEOs to duck the true questions about why they'd rather simply sit on the cash and forego expansion for now. They'd rather do it because they can. Because they can afford to wait until they have a puppet in the oval office who will do their bidding, who will call off the regulatory dogs, and who understands unique corporate challenges.
So what are we to do? Well, one possibility is looking to (or creating) small businesses. The problem there is that small businesses are concerned about hiring people when consumers aren't buying anything. And consumers aren't going to buy anything if they have no money because they have no job and their unemployment benefits have run out.
It looks to me like it's time for the President and the Congress to start listening to Paul Krugman. After all, what is government for if not to be the safety net for people when out-of-balance power players such as the top 500 corporate CEOs decide they're going to outwait the unemployed until they write the rules?
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