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Obama And The Anti-business Slander

The following question is getting all the attention from Business Week's recent interview with Obama, and it strikes me as utterly ludicrous:

A lot of business leaders consider you to be antibusiness. I was struck when I attended the Aspen Institute Ideas Festival. [Council of Economic Advisers member] Austan Goolsbee was speaking, and he hit a fairly hostile audience. These are wealthy, fairly progressive older people who had tended to support you, but they seemed very upset about corporate taxes, individual taxes, card check, all sorts of things you're doing that they perceived as not helpful to them. What can you say to those people?

What Obama should say to those people is get some frickin' perspective, which he eventually did (albeit more politely):

Let's look at the record. I've been in office six months. So far my only tax policy has been to cut taxes for 95% of working people. I haven't signed a bill that's raised taxes yet. To the extent that we have put in place policies, they've all been directed at helping businesses. A number of those who think we're antibusiness seem to forget that it was just three or four months ago when, at great political expense, we yanked them out of the fire. And they still—at least if they're in the financial sector—are enjoying a whole bunch of government guarantees that are propping up their business models. So it's hard for me not to be a little skeptical when I hear that somehow we've been antibusiness. ...

My working assumption has always been, if the market could do it better, have the market do it. I have very little confidence in, as I said, some sort of command-and-control regulatory regime. I think businesses create jobs. And I'm a big believer in the profit motive and think free-market pricing is the best way to figure out how to distribute goods and services in a complex economy. ... I just think it's a sign of how far our ideological pendulum has swung that the things we suggest are somehow deemed antibusiness. And if we suggest that after the worst financial crisis since the Great Depression, maybe we should strengthen regulations in the financial system; if we propose not a single-payer health-care plan, but a plan that builds off the existing employer-based system, but has some insurance reforms in it and squeezes some efficiencies and incentivizes better care for lower prices, that that's somehow seen as this radical step. You know, if we think that we should make sure that the tax code is not encouraging the exporting of jobs, and if there's a way of doing it—at least creating a level playing field so the companies who invest here at home are doing at least as well—those aren't real radical propositions. And so there's, I guess, going to need to be some sort of cultural adjustment over the next couple of years.

I'd put it a little more starkly. If someone told you a few years ago that we'd see the financial sector gobble up 40 percent of all corporate profits, that it would secure these profits by using massive leverage to take enormous risks on various debt securities--risks strongly encouraged by the structure of employee compensation--and that, when the downside came, it would trigger the deepest recession and worst financial crisis since the 1930s and require a $700 billion bailout... And that, after all this, we weren't going to do demand any major structural reform--we weren't going to chop up big complicated banks, we weren't going to force public companies that place bets in the financial markets to become partnerships (i.e., gamble with their own money), we weren't going to place limits on the volume of exotic financial products these companies could trade--would you call that response anti-business? 

I'm not saying we should do all these things. (Some of them make intuitive but not practical sense.) I'm just saying they fall squarely into the category of reasonable responses to the circumstances I just described. Which makes it really hard to see how something significantly less ambitious could be described as "anti-business."

--Noam Scheiber