NY Times Op-Ed January 27, 2011 Obama and Corporate America President Obama is smart to extend an olive branch to American businesses. Our economic success depends on businesses investing, growing and creating new jobs. From expanding exports to improving infrastructure, government and businesses share important goals.
From a purely pragmatic political standpoint, reaching an entente with corporate leaders will make it easer to defuse the hostility he has faced. Some of it has been purely partisan and ideological, from groups like the United States Chamber of Commerce, which deployed millions to unseat Democrats in the Congressional elections last year. Still, Mr. Obama must take care not to let his agenda be taken over entirely by corporate interests. They do not belong to the only constituency he serves. Appointing William Daley to be a business-friendly White House chief of staff seems a good idea; so does drafting Jeffrey Immelt of General Electric to lead his Council on Jobs and Competitiveness. It’s fine to promise to weed out stupid business regulations, though past administrations that have done the same have found that most of the regulations aren’t stupid. But Mr. Obama should keep in mind that the interests of corporations and their bosses are not necessarily always aligned with those of the country. All he needs to do is look at the pile of uninvested cash on which nonfinancial businesses are sitting — nearly $2 trillion — while the national unemployment rate remains above 9 percent. Satisfying business interests can be tricky. Mr. Obama wants, for example, to reduce the 35 percent top corporate tax rate. That might sound like music to corporate ears, but it could easily run into powerful opposition. That’s because the president has rightly linked the reduction in the marginal tax rate to closing the loopholes in the tax code that allow many corporations to pay much less in taxes than they should. Despite the high corporate tax rate, taxes on corporate income only raise an amount equal to 2.1 percent of the gross domestic product. That is way below the 3.5 percent of G.D.P. raised, on average, across the Organization for Economic Cooperation and Development. It puts the United States near the bottom of industrial nations. Even the most promising areas for cooperation — like increasing exports — are tricky. Business groups are right to urge the administration to obtain Congressional approval for the trade agreements with Colombia and Panama that were signed during the administration of George W. Bush. But Mr. Obama has been unwilling to face down trade unions and has placed the deals on the back burner. President Obama should bring his party on board and pass the trade agreements. He should consult closely with business on his plans to invest in public infrastructure. But this is a two-way street. Some business lobbying groups have fought Mr. Obama on ideological, not policy grounds, opposing major initiatives tooth and nail, including health care reform. As Mr. Obama reaches out to them, corporate interest groups must abandon the politics of division and gridlock and reach back out to him. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
