President Obama is making a full-court press to patch up his relations with the business community.
The president has named William Daley, a JPMorgan Chase executive, as White House chief of staff. On Friday, he named Gene Sperling, an economist who has done work for Goldman Sachs, to replace Larry Summers as head of the National Economic Council. Last month, he held a peace summit with 20 CEOs. And on Feb. 7, he will address America’s largest business federation, the US Chamber of Commerce, which spent $33 million in the last election mostly to defeat Democrats.
Relations soured early in Mr. Obama’s presidency, with the economy in free-fall and frustration boiling. Obama’s populist rhetoric – see “fat cat bankers” – may have sounded good to some in his liberal base, but it left the business community wondering if he understood its role in helping the economy recover even as financial institutions (and the auto industry) got government bailouts. Health-care reform and financial regulatory reform have also left the business world feeling burdened.
But late in 2010, when Obama went along with a two-year extension on Bush-era tax cuts for top earners, business leaders applauded. At the very least, with the legislation settled, they now know the score and can plan. And with Mr. Daley taking the helm as Obama’s chief operating officer, corporate leaders know they will have someone on the inside who understands their concerns.
“We keep hearing that the corporate world not only feels disconnnected from the White House, but also has a sense that there’s not the level of predictability they need to start making investments,” says Matt Bennett, vice president for public affairs at Third Way, a moderate Democratic think tank. The appointment of Daley is “a signal that predictability is on its way.”
Not that Daley can or will undo policies that the business community doesn’t like. He will do Obama’s bidding – and that means defending health-care reform and the new financial regulations. But going forward, as the Obama administration seeks to promote economic growth and job creation, Daley will be a sympathetic ear to the corporate community.
The White House is eager to see the $2 trillion sitting in corporate treasuries invested in the US economy, and Daley could be instrumental in addressing businesses’ concerns.
“Few Americans can boast the breadth of experience that Bill brings to this job,” Obama said Thursday in introducing Daley. “He’s led major corporations; he possesses a deep understanding of how jobs are created.”
Before becoming a senior executive with JPMorgan Chase investment bank, Daley was president of SBC Communications (now AT&T) and vice chairman of Evercore Capital Partners. He also served as Commerce secretary under President Clinton.
Obama’s push to double US exports by 2015 has also led to more focus on business promotion abroad. The president met with a delegation of US business leaders during his trip to India in the fall. He is pushing for congressional ratification of the US-South Korea free-trade agreement and is working on stalled trade pacts with Colombia and Panama.
On Thursday, the Obama administration made a proposal to end an effective ban on long-haul Mexican trucks from entering the United States. The ban, which Mexico claimed violated the North American Free Trade Agreement (NAFTA), led to $2.4 billion in punitive tariffs on US products imported to Mexico. Resolving the dispute would help US businesses.
Corporate bailouts, which started at the end of George W. Bush’s presidency, left populists on the left and right dismayed with Washington. It was the Obama administration’s mortgage bailout plan that sparked the tea party movement in early 2009.
Now, with Daley moving to the White House, the left is reacting with some chagrin. But a key figure in the labor movement, an important part of Obama’s base, is reacting cautiously.
On MSNBC Friday, when asked to elaborate, Mr. Trumka expressed hope that Daley would reach out to “diverse groups” – not just the business community. The message of the midterm elections, he said, was that “the American public doesn't think that the White House, the Senate, or the House, or the state governments were listening to working people.”
The bottom line for all concerned will be economic growth and job creation. If the numbers head in the right direction, neither business nor labor will have much complaint.