In recent months, President Obama launched a widely advertized "charm offensive" targeted at America's corporate and financial elites. He named Bill Daley, a former executive for JPMorgan Chase who oversaw corporate lobbying, as his chief of staff. He nominated General Electric CEO Jeffrey Immelt to chair a new Council on Jobs and Competitiveness. He held publicized meetings with CEOs in the White House.
The charm offensive bizarrely culminated with a trip across Lafayette Park to address the U.S. Chamber of Commerce, which, under the cover of being a business association, runs a right-wing lobby operation selling services to entrenched corporate interests (health insurance companies, Big Oil, drug companies, multinationals) that prey on taxpayers. In his Chamber speech, Obama promised to reduce regulation, reform and lower corporate taxes, and pass corporate trade accords. And, of course, he turned his focus to deficit reduction, beginning with a five-year freeze on domestic discretionary spending, reducing it to a relative size not seen since the Eisenhower years.
In fairness, the president did also urge the Chamber to support his call for investment in infrastructure, education, and research. He defended his health-care and financial reforms, noting that they would save money for business. Perhaps most important, he voiced a central insight about this economy: "If we're fighting to ... help you compete, the benefits can't just translate into greater profits and bonuses for those at the top. They should be shared by American workers ... We cannot go back to the kind of economy -- and culture -- we saw in the years leading up to the recession, where growth and gains in productivity just didn’t translate into rising incomes and opportunity for the middle class."
It is utterly true that we can't go back to the old economy, which was plagued by destabilizing extremes: a Gilded Age concentration of wealth, America’s national economy borrowing $2 billion a day to cover unsustainable trade deficits, and Wall Street capturing some 40 percent of all corporate profits, while the financial elite made wilder and wilder bets, until they blew up the economy.
The president's initial reform efforts confronted entrenched interests with a huge stake in the old order. Wall Street mobilized to fend off real financial reform. With the help of the Chamber, Big Oil blocked the move to new energy and health insurance corporations weakened health-care reform. The multinationals made adherence to the old trade policy, which fuels unsustainable trade deficits, a measure of being "good to business." China and Germany scorned the administration's pleas for global trade rebalancing.
The scope of the president's retreat in the face of this onslaught became apparent when, during his Chamber speech, the president fell back on simply inviting corporate executives to "ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation."
This charm offensive offends reason. First, the premise that corporate America needs concessions is wrong. Business and Wall Street may be irritated with the White House, but corporate profits are up; Wall Street bonuses are setting new records.
And, while the president is suing for peace, the old economy is reasserting itself. The banks are more concentrated than ever, with financial profits back up to nearly 30 percent of all domestic corporate profits. The trade deficit is over $1 billion a day again.
Clearly, the White House decided that with the president headed into a re-election battle where he seeks to raise $1 billion, and with Citizens United legalizing unlimited corporate "independent" campaign expenditures, it was time to sue for peace. But a jobless recovery, with stagnant wages and growing insecurity, will threaten the president's re-election. Worse, it will threaten America's future.
Robert L. Borosage is co-director of the Campaign for America’s Future.