Obama’s ‘we’ philosophy collides with capitalism’s ‘me’
TheGlobeandMail.com – Politics/Ideology – Business leaders accuse President of using failures of a few to justify expansion of government regulatory authority
Published on Friday, Jul. 09, 2010. Washington — Konrad Yakabuski
When Barack Obama tours a factory these days, it’s usually because it makes one of four things: solar panels, biofuels, wind turbines or batteries for electric cars.
So, it was no surprise on Thursday when the President showed up at a former jet-engine repair shop in Kansas City, Mo., that has been transformed into a plant that makes electric delivery trucks, thanks to a grant from the Obama administration’s $860-billion (U.S.) stimulus package.
After he praised the factory’s 50 workers for “building the economy of America’s future,” Mr. Obama reminded them that, owing to his administration, the U.S. share of global battery manufacturing capacity for electric and hybrid vehicles will go from 2 per cent to 40 per cent by 2015.
This is state capitalism, Obama-style. His is a vision of a virtuous clean-energy economy nurtured by government. It is benevolent, ordered and seemingly devoid of egos, obvious wealth or crude self-interest.
It is also largely at odds with the prevailing concept of American capitalism as a messy, chaotic and utterly selfish pursuit of happiness that rewards risk-takers and equates the national dream with getting rich.
“We can’t compete as a nation if the irresponsibility of a few on Wall Street can bring our entire economy to its knees,” Mr. Obama charged last month at Pittsburgh’s Carnegie Mellon University in a seminal speech that provided the clearest outline yet of his economic philosophy.
The President’s relentless criticism of the “me first” version of the American dream – on Thursday, he again called the recent recession “the culmination of a decade of irresponsibility” – has put him on a collision course with business, big and small alike.
Wall Street and BP are hardly paragons of capitalist virtue. But U.S. business leaders accuse Mr. Obama of piggybacking on the failures of a few to justify a massive expansion of government regulatory authority. For many, his unprecedented jawboning of BP into creating a $20-billion compensation fund for victims of the Gulf of Mexico oil disaster (thereby ceding its due process rights) smacks of dangerous authoritarianism.
Mr. Obama has “convinced the markets that he is an American version of [Russian Prime Minister] Vladimir Putin, willing to harry firms into doing their bidding,” The Economist recently mused.
“Most of the business leaders I spoke to had voted for Barack Obama. They still admire him,” Newsweek columnist Fareed Zakaria writes in the magazine’s current issue. “But all think he is, at his core, anti-business.”
For Time’s Mark Halperin, Mr. Obama’s advocacy for the financial reform bill set to pass Congress and his handling of the BP spill is proof enough for business that the President is “a serial scapegoater of large corporate interests.”
Mr. Obama is not the first president to mop up after the destructive excesses to which unfettered capitalism has occasionally exposed the country. But not since Franklin Roosevelt have circumstances and personal convictions put any president on such antagonistic terms with the American business establishment.
It is one reason American companies are sitting on record stockpiles of cash, instead of investing it in new plants or hiring workers, as they contemplate the consequences of government overreach in everything from financial services and health care to tax reform.
“We have reached a point where the negative effects of these policies are simply too significant to ignore,” Ivan Seidenberg, chairman of the influential Business Roundtable, the U.S. equivalent of the Canadian Council of Chief Executives, charged last month. “By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses.”
Like FDR, Mr. Obama seems to believe his policies are needed to save American capitalism from itself. Roosevelt’s Depression-era reforms – which included the creation of the Securities and Exchange Commission, Social Security and unemployment insurance – smoothed capitalism’s edges, tempered its downturns and ultimately increased its legitimacy.
It hardly went unnoticed, nor did Mr. Obama apparently want it to, that his bedtime reading as President-elect in 2008 consisted of a book on FDR’s first 100 days in the Oval Office. (Mr. Obama was so impressed, he granted the author, Newsweek’s Jonathan Alter, privileged access to the West Wing to chronicle the first year of his presidency for his new book, The Promise.)
For McGill University political historian Gil Troy, Mr. Obama’s attacks on business put him well within a presidential tradition that goes back at least as far as Andrew Jackson in the 1830s. But they also betray his particular world view and a career spent entirely outside the private sector.
“Not only does Barack Obama lack corporate experience, but his defining experiences were as a community organizer, public interest lawyer and law lecturer,” Prof. Troy said in an interview. “That puts him ideologically, structurally and professionally in opposition to business.”
Mr. Obama, Mr. Troy continued, is “trying to convince Americans of the efficacy of government. He’s enough of a [Ronald] Reagan baby to know that is not necessarily the easiest sell to make. So, if [the economic crisis] is not a God-given opportunity, it’s at least a Goldman Sachs-given opportunity to make that sell.”
Mr. Alter notes in The Promise that the new President considered one of his earliest mistakes to have been “not focusing more on George W. Bush’s legacy, the way Roosevelt savaged Herbert Hoover’s record and Reagan kept punching Jimmy Carter long after taking office.”
In recent months, though, Mr. Obama has more than made up for it. His Carnegie Mellon speech dwelled on the failures of Reaganomics and its Bush-era imitations.
“They gave us tax cuts that weren’t paid for to millionaires that didn’t need them. They gutted regulations and put industry insiders in charge of industry oversight,’’ Mr. Obama asserted. “And despite all their current moralizing about the need to curb spending, this is the same crowd who took the record $237-billion surplus that President Clinton left us and turned it into a record $1.3-trillion deficit.”
The venue for this no-holds-barred attack on supply-side economics was telling in itself. Andrew Mellon, the university’s one-half namesake, was a wealthy banker and industrialist who became treasury secretary in three Republican administrations, including Hoover’s. More important, Mr. Mellon was the father of the “trickle down theory” that inspired the Reagan and Bush tax cuts.
The Depression, like the economic collapse of 2008, came on the heels of a quarter century during which the gap between rich and poor in the United States was widening to unprecedented levels. The American Dream is built on the idea of social mobility; but in 1930, and again in 2008, an American born into poverty was less likely to climb the income ladder than a poor person almost anywhere else.
FDR’s New Deal set about to change that, ushering in a long era of rising incomes for all Americans and a golden era of American capitalism. Mr. Obama’s policies, even if the free-market orthodoxy of American political discourse prevents him from directly saying so, are similarly aimed at rebuilding the basis for capitalist growth.
In his view, they are anti-business only in as much as cod liver oil is anti-children.
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