Is Obama Anti-Business?

Albert R. Hunt defends the administration against the charge made by Verizon chairman Ivan Seidenberg. (Part of the reason for Seidenberg’s charge is the FCC’s aggressive push to regulate the Internet without apparent statutory authority.) Hunt’s defenses of Obama are as follows:

President Barack Obama rejected calls last year to nationalize the big banks, opting instead for market-based stress tests and injecting more private capital; he disappointed liberals by turning down a government-run national health-care program, and assists the struggling U.S. automobile industry to survive as a private enterprise.

In the face of the worst economic crisis since the Depression, corporate profits since Obama took office have soared 40 percent, and the stock market, despite the recent slump, has risen more than 27 percent.

The U.S. corporate tax rate is the second-highest among major industrial countries, the Verizon CEO correctly noted. He neglected to point out that the effective marginal rate paid by corporations, according to a study by the administration of President George W. Bush, is within the average of these countries because of all the loopholes championed by business interests.

So almost all of Hunt’s defenses of Obama’s record have to do with the fact that his administration (and to be fair, the one before as well) is willing to use the power of the federal government to pick winners in the marketplace. That’s certainly “pro-particular businesses,” but one can see how those overlooked for special treatment might be miffed. The final point left is the rise in corporate profits. Given that Obama took office at the nadir of the worst postwar recession, I hardly think this trend can be credited to his account. Finally, we would do well to remember the distinction between being pro-business and pro-market. No, Obama’s not a socialist ideologue, but his administration is reintroducing old-fashioned industrial policy to the American political economy in a big way.

4 thoughts on “Is Obama Anti-Business?

  1. i always find it troublesome whenever someone brings up the stock market as a barometer for the president’s performance.

    sure, the market’s up quite a bit over its low. the low was also under obama’s administration (march of 09).

    claiming that the president has that much control over things like aggregate demand, commercial/residential housing prices, and interest rates is risible.

    naturally, the obama cheerleaders will use it when it fits their agenda. and larry kudlow will use it when it fits his.

  2. Yes, a President’s responsibility for the economy is grossly exaggerated in the popular mind. Now, I do think that when Congress and the President are of the same party, you can attribute some responsibility for the economic situation to the policies of the incumbent party, but with plenty of caveats – you have to compare to other similarly situated countries, adjust for the business cycle, and consider the lags between policy change and the economic consequences.

  3. Loopholes in the tax code are mostly the product of Congress, and not really relevant to an assessment of a Presidential administration.

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