Reports from the Economic Front

a blog by Marty Hart-Landsberg

Obama–The People’s President?

Here is a link to a recent Business Week interview with President Obama.

Some highlights:

BW: Every American President in the last 30 years has had a major CEO as a member of the Cabinet in the inner circle. You don’t so far. Why is that?

It just has to do with who the particular individuals who were needed at a time of crisis. I thought it was very important to have Larry Summers and Tim Geithner as two of my key economic advisers early on because they had gone through significant global economic crises before.

But I think it is a legitimate point to say that we want and need more input from the corporate community, if nothing else, just so that we can communicate to the corporate community and to the business community the fact that, if you look at our actual policies, as opposed to the speculation around our policies, they have been fundamentally business-friendly.

BW: Let’s talk bonuses for a minute. Lloyd Blankfein: $9 million. Jamie Dimon: $17 million. Now, those were in stock and less than what some had expected. But are those numbers O.K.?

First of all, I know both those guys. They are very savvy businessmen. And I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.

I do think that the compensation packages that we have seen over the last decade, at least, have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs.


BW: Seventeen million is a lot for Main Street to stomach.

Listen. $17 million is an extraordinary amount of money. Of course, there are some baseball players who are making more than that and don’t get to the World Series either, so I am shocked by that as well.

. . .

The last point I want to make with respect to just our policies on business, generally, and this goes to your first question about the perception of us being anti-business: This year I will sign legislation that will cut corporate taxes by about $70 billion— their tax obligations will be reduced by about 10% because of bonus depreciation and some other steps that we intend to take. This notion, somehow, that we have been putting this enormous tax burden on business is just not true. It is not supported by the facts.

And even some of the more controversial proposals that we have put forward, like health care, if you actually analyzed what’s on the table there, certainly small businesses are a net winner, one of the biggest winners. Because it would provide significant subsidies to them to provide insurance for their workers and allow them to pool with other small businesses and individuals to get a better rate. Large businesses who are already providing health insurance to their employees would end up benefiting from significant changes in delivery systems that would promise to lower costs over the long term.

You would be hard-pressed to identify a piece of legislation that we have proposed out there that, net, is not good for businesses.

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