President Barack Obama’s speech to the Chamber of Commerce
(video
&
transcript) on Monday morning offered the
latest example of a man who wants to appear to be moderating while
remaining “same guy” he’s been for two years (or for his whole
adult life), to support business while refusing to back away from
Obamacare, the most job killing legislation in generations, and to
want to cut government spending while offering reductions in
discretionary spending that over the course of a decade save barely
a quarter of this year’s federal budget
deficit.
It was a speech full of the internal contradictions
necessary from a man whose mindset has always been anti-capitalist
and anti-compromise, and who is trying to reconcile those traits
with the “shellacking” his party took in November.
The president began by acknowledging his tense
relationship with the Chamber: “Maybe we would have gotten off on a
better foot if I had brought over a fruitcake when we first moved
in.” Polite but unimpressed laughter ensued, as if the attendees
knew what was coming next.
After two years of leaving business out in the cold during
every major policy discussion costing a few hundred billion dollars
or more, Obama claimed to have “exchanged ideas” and “sought advice
from many” of the Chamber’s members. He claimed to have found
“common cause” with the Chamber on the “Recovery Act” aka the
“Stimulus” aka “Porkulous,” but couldn’t name any other legislation
passed under his Administration that the nation’s leading business
organization supported, noting that “on other issues, we’ve had
some pretty strong disagreements.” You don’t say.
Obama lapsed into a brief history of economic competition
and globalization, noting that “these forces are as unstoppable as
they are powerful” before injecting the first evidence that he
was
telling the truth to Bill O’Reilly when he
said “I haven’t” when asked whether he’s “moving to the center”:
“[Americans] see a widening chasm of wealth and opportunity in this
country, and they wonder if the American Dream is slipping away.”
While
recent polls emphasize huge declines in
public satisfaction with both government and major corporations,
there is no evidence of the sort of class warfare jealousy
regarding a “chasm of wealth” that Barack Obama himself has
currently accepted (as demonstrated by his words to Joe the Plumber
and a later statement that “at a certain point you’ve made enough
money”).
Obama’s anti-capitalist view informs every policy
preference and tinges even his most blatant attempt at economic
“moderation” on his part.
It’s also worth noting that the decline in satisfaction
with government is down more than satisfaction with corporations,
and that much of the current fad of bashing companies comes from
the anti-business cheerleaders at the White House and within the
Democratic caucus in Congress.
The president then lapsed into the primary theme of the
speech: a bland rehashing of the State of the Union address with
another call to “out-innovate, out-educate, and out-build our
competitors” in order to “win the future” — a phrase which Charles
Krauthammer suggests will be Obama’s 2012 campaign bookend to “Yes,
we can!” and the acronym for which, WTF, Sarah
Palin cleverly appropriated.
And here is where the real Obama comes through.
He claims that “winning the future” is “a job for all of
us,” completely missing the point that what most businesses really
want is for government to get out of the way, not “help” as it did
with, for example, the residential real estate market or with
Obamacare’s massive cost and impending regulatory burdens, or with
his EPA’s desire to control most of the economy through regulating
carbon dioxide, a non-toxic substance almost entirely naturally
occurring, the primary use of which is as plant food.
Strangely, for a man who just a few minutes earlier had
said that “businesses can now open up shop, employ workers and
produce their goods wherever there is Internet connection,” Obama
then proposed “connecting 80 percent of the country to high-speed
rail,” a boondoggle so large that it could dwarf even the massive
money pit that is “green energy.” He also wants to “make it
possible for companies to put high-speed Internet coverage in reach
of virtually all Americans.” Perhaps he doesn’t realize that that
possibility already exists — and that government had almost
nothing to do with it (except for our undying gratitude to Algore
for inventing the Internet). As always with Obama, the answer is
government.
But the worst part of Barack Obama’s speech was his
attempt to channel President John F. Kennedy — the man who gave
America its single
largest federal income tax cut as a percentage of
GDP (1.9%) and as a percentage of the federal budget
(8.8%).
Warning businesses that they “also have a responsibility
to America,” Obama patronized: “But ultimately, winning the future
is not just about what the government can do to help you succeed.
It’s about what you can do to help America succeed.”
It’s a telling statement, so desperately wrong in its
underlying premises that the assembled CEOs must have wondered
whether an American president could actually be so clueless. Well,
they might have wondered had they not lived through the past two
years.
First, future success should be as little about government
as possible; Obama’s phrasing makes it clear that he believes
government is at least as important as business in national
economic success. Second — and I know our liberal friends and even
some conservatives won’t like to hear this — businesses have a
responsibility to their shareholders and employees. They don’t have
a duty to the nation other than to abide by its laws. Instead, the
actions of government should be such that they engender rational
economic loyalty to the nation, much as Hong Kong and Singapore
have among businesses domiciled there.
Obama spent minutes lecturing the CEOs that they should
start spending the cash they’ve been hoarding due to regulatory and
economic uncertainty that Obama has made much worse, not better. He
jawboned them to hire more workers, implying that his efforts to
rationalize America’s self-destructive corporate tax code would be
conditioned on business acquiescence. After all, Obama knows that
if the unemployment rate is 8% or higher in November 2012, our next
president is very likely to be a Republican.
In speaking about lowering the corporate income tax rate,
Obama specified that it would be in a deficit neutral way, meaning
that many current loopholes would be closed. Eliminating the crony
capitalism embedded in our tax code is a worthy goal. The problem
is that the static modeling used by the CBO and all Democrats when
discussing taxes means that they’ll ignore the economic growth —
and thus the additional tax revenue — caused by lower corporate
tax rates and thus not cut the rate as much as it should be cut.
Given the power of each industry group’s lobby and the different
treatment of each industry in our tax code, it will take a heroic
effort to accomplish serious reform of the corporate tax system. It
is, however, one of the few areas in which we should wish Obama
success.
The president also spent time talking about “remov[ing]
outdated and unnecessary regulations,” continuing his
sad-if-it-weren’t-so-damaging missing the point that nobody has
contributed more damaging regulation in such a short period of time
as he has (not that George W. Bush has anything to be proud of in
this area).
But continuing to prove that he is indeed “the same guy,”
after giving a few examples of potential streamlining of
regulation, Obama touted the virtue of regulation, from air and
water rules to financial markets to “buying groceries” and
essentially demonizing anyone who opposes regulation as ignorant
child abusers. In other words, regulations should be simpler, but
not that many fewer, and claimed good intentions trump all
else.
A point that supporters of capitalism must keep in mind is
that big business is not always, and perhaps not even most often, a
champion of free markets. Unlike small businesses, which survive
based on delivering a superior product or service for a given price
— in other words, by competing — big businesses work hand in
glove with government to crush competition (e.g. Net Neutrality) or
funnel taxpayer money to themselves (e.g. the government’s ban on
incandescent light bulbs, so that Obama’s friend Jeff Immelt of
General Electric can sell us more overpriced, underperforming,
toxic-if-they-break compact fluorescent bulbs). In short, do not
assume that Chamber of Commerce or a major corporation’s approval
of a government policy makes it a good idea — although it’s likely
to be a better idea with their approval than without it if it
originated in the Obama Administration.
Finally, as if to prove not only that he is economically
clueless but that he idolizes such ignorance, the president closed
his speech by lauding President Franklin D. Roosevelt’s “new
partnership with business.” Roosevelt is the second-most
anti-capitalist president in our nation’s history (second only to
our current president). His willingness to experiment (an approach
he took explicitly) with the nation’s economy is, according to many
who study economic history, what made the Great Depression so
“great.” Had Roosevelt not attacked corporations at every turn, the
U.S. would likely have come out of the Depression much faster — as
most of Europe did.
If Barack Obama’s economic role model is FDR, then we
really are lost — for two more years. Given that Obama has said
explicitly that he is not moving to the center, that he is “the
same guy” he’s been all along, betting odds are strong that if the
Administration does anything right in economic policy it will be
despite, and over the objections of, the developed world’s most
economically illiterate chief executive.
While Barack Obama probably intended his speech
“to
be seen over there [as] moderating,” instead he
simply proved to everyone that his rhetoric is mostly insincere and
completely uninformed by history or economic common
sense.
