Aims to reassure CEOs
Donald Lambro (Contact)
Sunday, March 15, 2009
told executives of big business last week that he believed in free-market economics, capitalist risk-taking, wealth creation and possibly lower corporate taxes - terms he rarely, if ever, uttered in his stump speeches for the presidency.
In an address Thursday before the Business Roundtable, a powerful lobbying organization made up of America's richest blue-chip corporations, Mr. Obama sounded at times like a cross between Ronald Reagan and free-market crusader Jack Kemp as he sought to win over titans of industry, many of whom are skeptical about his economic policies.
In the course of his fence-mending speech and question-and-answer session, the president also sought to erase the impression he is too pessimistic about the economy by sounding much more optimistic about its future. He said contrary to his critics, he doesn't want the government poking its nose into every business and running its affairs.
"I've always been a strong believer in the power of the free market. It has been and will remain the very engine of America's progress - the source of a prosperity that has gone unmatched in human history," Mr. Obama assured business leaders.
"I believe that jobs are best created not by government, but by businesses and entrepreneurs like you who are willing to take risks on a good idea. And I believe that our role as lawmakers is not to disparage wealth, but to expand its reach; not to stifle the market, but to strengthen its ability to unleash the creativity and innovation that still makes this nation the envy of the world," he said.
Mr. Obama's upbeat speech, in which he defended his proposals to reform health care, energy and education policies, came in the midst of a well-timed and long-awaited four-day bear market rally on Wall Street that gave the Obama administration the lift it needed at a time when almost all of the economic data showed the economy sinking deeper into recession.
"I'm amused sometimes when I read sort of, this talk of, well, you know, the Obama administration wants to get government in everybody's business. I don't. I want you guys to do your thing," he said.
Roundtable supporters came away from the meeting feeling more confident about Mr. Obama's friendlier, pro-business tone, but others took a wait-and-see attitude.
"There's a misperception, I think, in some people's minds that the relationship between business and the Obama administration is like, well, oil and vinegar. That couldn't be further from the truth," said Harold McGraw III of the McGraw-Hill Co.
Indeed, Mr. Obama struck what was seen as a pragmatic note on taxes and his cap-and-trade energy tax in his responses to questions from beleaguered businessmen struggling to survive a recession that has battered their companies here and abroad.
When asked about the 35 percent corporate tax rate that is the second-highest in the world, next to Japan's, the president said that he was open to reconsidering his opposition to lower rates as part of offsetting reforms to close business loopholes. "That's a very appealing conversation to me, and I'd like to pursue it," he said.
When Weyerhaeuser CEO Daniel S. Fulton expressed concern for his company and "a number of us in the business community" that the administration's proposed carbon-emission pricing plan "will effectively be a tax that would impose significant costs on energy-intensive industries," Mr. Obama said he was flexible on how the pricing would be structured.
Mr. Obama agreed, saying "you're right, if it's so onerous that people can't meet it, then it defeats the purpose - and politically, we can't get it done anyway. So we're going to have to find a structure that arrives at that right balance."
Many in the business community worry that Mr. Obama's emphasis on the economy's troubles has needlessly provoked fear that has caused consumers to rein back on spending and worsened the recession.
"We're in a battle in this country now, and maybe in the world, between confidence and fear. And it's important that confidence win," said Richard Parsons, chairman of trouble-plagued Citigroup bank, who asked him to "drive home that point."
Mr. Obama was happy to comply, saying "this is the most dynamic economy on earth, and our capacity is undiminished," ticking off small improvements in housing-inventory decline, business innovations and even in the hard-pressed banking industry. "The vast majority of banks are going to be doing fine and in a position to make profits," he said.
He wanted the business community to know, he said, that "I'm not somebody who - I've never bought into these Malthusian woes: Chicken Little, the earth is falling - I tend to be pretty optimistic."
"We just want to make sure that everybody understands, you know what, you don't have to stop in your tracks here. Things are going to get better," he said.
By the day after his speech, the Dow Jones industrial stock average had risen 9 percent for the week, putting in its best performance since November.
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All I can say is action speaks louder than words..