The Obama-Was-Anti-Business Myth
Editor’s Note: The weakened Democratic political position has sent President Obama scurrying over to the U.S. Chamber of Commerce to plead for help on the economy, while the U.S. media pushes the narrative that last fall’s “shellacking” has forced Obama to retreat from his anti-business attitudes of his first two years.
However, the notion that Obama was anti-business in 2009-10 was more a political myth invented by the Right than anything based in reality, as Kevin Zeese points out in this guest essay:
The unrelenting narrative from the corporate media – that Obama must mend fences with American business – is disconnected from the reality of Obama’s policies and appointments.
It also is inconsistent with the rise in the stock market, the record profits, and the hordes of cash that big business is sitting on.
There is no question that small businesses are still being choked by the unavailability of credit -- and that the lack of job creation is preventing a real economic recovery -- but the businesses that Obama spoke to when he visited the Chamber of Commerce are not in that category.
In recent years, the national Chamber has evolved into a spokesperson for transnational corporations, not Main Street America’s businesses. The Chamber's key constituents have pushed U.S. job killing policies that send jobs overseas so transnational corporations can reap the biggest profits from the cheapest labor.
Rather than scolding the Chamber for killing American industry, Obama bowed to them. It seemed to be a conscious political strategy as he seeks to raise $1 billion for his re-election campaign and neutralize opposition from concentrated corporate capital.
As a result his promises to the Chamber represented a policy agenda that will likely fail to ignite the U.S. economy but will continue to grow the power of concentrated corporate interests, especially transnational corporations.
Key elements of the business agenda Obama that promised may be good for big business interests but they are bad for the U.S. economy, workers and small business interests. The agenda included:
--A freeze on domestic spending for five years, excluding the military and national security.
This McCain campaign promise -- opposed by Obama during his campaign -- will result in austerity budgets for programs that attempt to meet the needs of Americans while the military and national security budgets continue to devour more and more federal spending.
In fact, Obama failed to mention the urgent need to dramatically reduce the rapidly rising military and intelligence budgets, which make up more than half of federal discretionary spending. He apparently didn’t want to offend the Military-Industrial Complex.
--Obama reprised the falsehood that Social Security and Medicare are the driving force of deficit spending, when in fact both are contracts with American workers for essential health care and retirement services funded by payroll taxes.
This contract, paid for by American workers, must be honored. Social Security, in particular, had built up over $2.5 trillion worth of Treasury bonds at the end of fiscal 2009. These produce more than $100 billion annually in interest.
Social Security will remain solvent by merely raising the cap on the Social Security tax so the wealthy pay their share. That simple step will ensure that retirement security continues long into the future.
To really control debt the U.S. must lower health care costs. But the Obama-supported health reforms, passed in 2010, will not do this because health insurance remains in the hands of giant profit-making insurance companies.
Only improving and expanding Medicare to cover all Americans will accomplish the objective of lower costs. If you are concerned with deficit spending, you should support single-payer health care.
--Obama promised to reduce the corporate tax, another McCain campaign proposal that the Obama campaign called a “gift basket” for corporate America.
In fact, 72 percent of foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.
Revenue from the corporate income tax fell from between 5 and 6 percent of GDP in the early 1950s to 2.1 percent of GDP in 2008. While corporations are seeing record profits and sitting on huge cash reserves of $2 trillion – and are failing to hire Americans – Obama gentle plea for them to start investing that money and creating jobs was inadequate.
--Obama promised less regulation, pledging to reduce regulation without pointing out that the deregulation era that began with Ronald Reagan and continued with every president, Democrat and Republican, was a primary cause of the economic collapse, as even Alan Greenspan, the former libertarian-leaning Federal Reserve Chairman has admitted.
--Obama promised more corporate trade agreements with developing nations.
These types of trade agreements have created a huge trade deficit and the net loss of 5.1 million manufacturing jobs and 43,000 factories since America started its experiment with the current trade model in the 1990s. The Korea pact which Obama trumpeted is projected to cost another 159,000 U.S. jobs.
The Chamber speech and Obama’s recent appointments have the media claiming that he has embraced a new business agenda.
His recent appointments of William Daley, a JP Morgan executive and former board member of the Chamber of Commerce, as his chief of staff; Gene Sperling, formerly with Goldman Sachs, to head Obama's National Economic Council; and Jeffrey Immelt, CEO of General Electric, to head the Council on Jobs and Competitiveness, are certainly pro-business.
The latter selection is particularly disturbing since GE has cut 10,000 jobs in the U.S. while creating 30,000 jobs in India in the last decade.
But these appointments are consistent with the appointments in his first two years.
The previous chief of staff, Rahm Emanuel, made millions of dollars on Wall Street as an investment banker with Wasserstein Perella and received more donations from Wall Street than any other member of Congress.
Obama’s Treasury Secretary, Timothy Geithner, was the president of the Federal Reserve Bank of New York where the failure to control Wall Street gambling was a chief cause of the economic collapse in 2008.
Larry Summers was appointed head of Obama's National Economic Council even though he -- as Bill Clinton's Treasury Secretary -- played a large role in deregulating the derivatives market and repeal of Glass-Steagall, two major contributors to the economic collapse.
Before joining the White House in 2009, Summers was paid about $5.2 million from hedge fund D.E. Shaw and collected hundreds of thousands more by speaking to big financial institutions -- while also serving as Harvard president.
Obama’s policy prescriptions also favored mega-corporations. His health reform would give hundreds of millions to the insurance industry in new annual tax subsidies and would strengthen their grip on health care.
The financial reform that he supported in Congress did not confront the chief causes of the collapse and was applauded by many in the financial industry. He also failed to deal with urgent environmental issues and did not even mention climate change in his recent State of the Union.
Meanwhile, Obama has escalated some of the wars that he inherited from George W. Bush, with increased drone strikes in Pakistan and tripling the number of troops in Afghanistan. U.S. combat troops also remain in Iraq. Plus, Obama has produced record weapons and war budgets, record intelligence budgets and record arms sales.
While Obama is a brilliant communicator who suggests a progressive agenda rhetorically, his appointments and policy prescriptions have been consistently corporatist in nature favoring big business over the necessities of the American people.
Thus, the corporate media spin that Obama only now is becoming business friendly is misleading – because he has always been business friendly.
Kevin Zeese is executive director of Prosperity Agenda (www.ProsperityAgenda.US).
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