I discussed President Obama’s CEO “summit” today with David Callahan, the author Fortunes of Change: The Liberal Rich and the Remaking of America. CNBC hosts are Melissa Francis, Sue Herrera and Michelle Caruso-Cabrera. Here is a transcript:
Michelle Caruso Cabrera: A big day in Washington, a big day at the White House. On the agenda – spending some of the cash that US companies are hoarding and hiring new employees. But is the President really trying to do more for business, or is this just for show? Politics as usual? Peter Flaherty is President of the National Legal and Policy Center. David Callahan is a Senior Fellow at Demos and author of Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America. Peter I am going to start with you. Do you believe anything is going to happen from this? Is the President going to take some advice and listen to them or is this just for show?
Peter Flaherty: They will get some good TV coverage off of it. This is political stagecraft. The President is perceived to be anti-business. It hurt his party in the elections. It really comes down to jobs. You can’t be perceived to be anti-business and pro-jobs at the same time – so we have this event. I do wish that he had invited some CEOs who are actually critical of his policies. If you go down the list it is a pretty tame group. It is the liberal rich. You have Penny Pritzker who was the chairman of his campaign fundraising committee and then his golfing buddy Bob Wolf of UBS.
Michelle Caruso Cabrera: David Callahan, your response to that? Are they going to get anything done here? Is this an appropriate move for the President to make?
David Callahan: Well I hope that what those CEOs are doing is lining up to thank Barack Obama for being such a great President for them. I mean corporate profits are up thirty one percent since Barack Obama took office. Corporate American just had its best quarter ever. I mean these people are rolling in dough. Obama has been a great President for business. He pledged during the campaign that he would push to make it easier to form unions – promptly put that in the closet. He said that he was going to crack down on off shore tax shelters that these corporations use – promptly put that on the back burner. You know, I mean, this President gave to big Pharma during the health care debate…
Sue Herera: So David, I understand your concerns and your point of view, but the President doesn’t really have a choice does he? If he wants to create jobs he has to go to the companies that create jobs. Right? He has to convince them to spend the money to create jobs and to hire.
David Callahan: That is right. I mean, they are sitting on a lot of cash. They have used this downturn as an opportunity to cut their operations, fire people and increase their profits. They have not been willing to spend the money to create jobs and Obama needs to push them to do that.
Michelle Caruso Cabrera: Peter Flaherty, what do you think about what David Callahan just said?
Melissa Francis: Yes.
Michelle Caruso Cabrera: Are companies doing well because of the President or despite him?
Peter Flaherty: Well, corporate American over the years has tightened its belt. It has become more efficient. Government under President Obama has gone exactly in the other direction. One thing that was missing from this meeting today were any representatives of small businesses. They are the people that create jobs. Those are the people who have the biggest problems grappling with the costs and requirements of the new regulatory regimes with health care and any number of other things. If Obama was really serious about being pro-business he would call off the dogs. He has these activists in his Administration who view business as the enemy. The Solicitor at the Labor Department is named Patricia Smith. She just circulated this memo explaining how she is going bully business on employment wage and hour issues.
Melissa Francis: David, what about that? I mean has he been as friendly to small business?
David Callahan: Well he has done a number of things for small business with those tax credits. You know what we are hearing a lot now is what Obama needs is some CEOs hanging around the office there at the White House. He needs to put a top business leader in charge of economic policy at the White House. Lets not forget what happened the last time we had CEOs at the White House.
Melissa Francis: So what is the solution then, David? I mean you are saying that companies that it is not right that they have tightened their belt and that they need to get off this cash and start hiring people. I mean what would get them to do that? How would we do that?
David Callahan: Yeah, I think that they certainly need pressure from the President. I mean it is not clears how you can force them…
Melissa Francis: You can’t bully them.
Peter Flaherty: They should not be forced.
Melissa Francis: You can’t force them.
Peter Flaherty: Investment and hiring should be economic decisions not political decisions.
Sue Herera: So how do you give them the economic incentive to do that?
Peter Flaherty: Well you reverse Obama Administration policies. It is not going to happen because of them.
Melissa Francis: Like what? Tell us the specifics.
Peter Flaherty: Well the tax deal has its problems but for Obama it was a step in the right direction and there are any number of other things he can do. Regulation, we could spend a couple hours talking about all the regulations that business is facing. Government has become a leading actor in energy, financial, housing economies. We have got to get the government out of all of these things. That’s why CEOs have to flock to Washington to gain the favor of the President because the government is too big and involved in too many things.
Michelle Caruso Cabrera: David, what struck me about what you said was that the President should put pressure on them. I mean this always seems to be the argument that I hear from certain sides of the aisle that say – government says it, it decrees it, therefore it must be so and it will happen. That isn’t how the world works. That is not how the global economy works.
David Callahan: The bottom line is that the businesses are not going to start to really hire until they feel that the economy is coming back.
Michelle Caruso Cabrera: That’s right. It is not going to have anything to do about pressure from the President.
David Callahan: But to make that happen I think we need some more stimulus because we are really stuck in a trough here.
Michelle Caruso Cabrera: All right. Peter Flaherty, David Callahan thanks for being with us.
Here are some additional points that I did not get a chance to make:
I question whether CEOs and the President can have a frank discussion about anything because government now intervenes in so much. CEOs have criticized Obama at their own risk because of the government threat to their own businesses. I hope that CEOs can now be more outspoken.
A number of the CEOs have companies that are increasingly dependent on its government. There’s John Lechleiter of Eli Lilly, one of the big pharma companies that made a deal with the White House to support ObamaCare. I am not sure he will tell Obama what he needs to hear.
Also you have Eric Schmidt of Google. The FTC recently dropped an investigation of the WiSpy scandal after Obama attended a fundraiser by another Google executive.
Related:
‘Capitalism is Good’ Says ‘Pro-Biz’ Bam (New York Post)