September 4, 2010
— When it comes to the economy, White House senior adviser Valerie Jarrett wants to remind everyone: Her boss inherited this mess. She said so numerous times during a less than 20-minute interview in the West Wing Thursday on the Obama administration's on-again, off-again relationship with big business.
Since then, she said, "enormous progress" has been made. Of course, things are "not where they need to be," and the "new rules of the road" — administration-speak for "regulations" — have created a "predictable" period of "temporary" uncertainty, Jarrett said. But every step has been designed to strengthen the economy, she insists.
"We share the priority of the business community that the way to create long-term, sustainable growth in the United States is through private-sector jobs," said Jarrett, President Barack Obama's liaison with the business community and the former chief executive of Habitat Co., a Chicago real estate development company. "And so we will be exploring a range of ways in which we can feed that long-term growth."
Jarrett's assurances haven't given much comfort to CEOs. Instead of hiring, nonfinancial companies are sitting on $1.8 trillion in cash, Fareed Zakaria pointed out in a widely read July column in the Washington Post. That's roughly 25 percent more than at the recession's start. Meanwhile, chief executives are criticizing the government's intervention in the economy and reportedly spending record amounts on lobbying to weaken financial and health care reform and kill pro-union card-check and climate legislation.
Given that the business community seems to have all but forgotten the $787 billion stimulus package Obama championed, one might think Jarrett would be itching to call up someone like Jamie Dimon, the outspoken JPMorgan & Chase Co. chief executive, and tell him to back off.
But "no, no, no," Jarrett said. In a smooth-as-silk voice, she responded with words that could have been printed in a junior high civics textbook: "It's important for people to speak up so that Congress is informed. Part of what makes the United States a great country is there's freedom of speech."
No wonder those on the left are disillusioned. They wanted a fighter and got, well … let's just say, when it comes to the economy, no one is happy.
But instead of leaving corporate stalwarts to stew, Jarrett invites them over for dinner. And the administration is going on what's been described as a "charm offensive," shifting the focus to shared goals, chiefly easing export restrictions and inking free-trade agreements.
"Now we're talking about exports and trade reforms and incentives for businesses, and we welcome that," said Boeing CEO James McNerney, who heads Obama's export council. "That's one of the reasons I volunteered for this job, because I think it's a place where the administration and business can come together. However, most of us wish this agenda had been promulgated earlier."
McNerney and Motorola co-CEO Greg Brown say they've never seen this much interaction between the White House and business leaders. Brown called Jarrett while she was on vacation in Martha's Vineyard to thank her for federal investments in high-speed broadband networks and to update her on Motorola's performance. He left a voice-mail message saying the matter was not urgent.
She returned his call from vacation.
"If I ever need to call the White House to have a discussion, I don't hesitate to do so," Brown said. "And I consistently get a quick response."
Still, he said, more needs to be done, including making the research and development tax credit permanent. Doing so would give technology companies more confidence about spending cash reserves, Brown said.
"The administration was focused on stabilizing the economy and avoiding a severe depression," he said. "And I actually think overall they did a very good job, but now we need to go from stabilizing the economy to growing it."
But health care, said David Chavern, chief operating officer of the U.S. Chamber of Commerce, was "the big break."
"They've certainly made some recent moves that have been helpful," he said. "But it's been pretty late in coming frankly."
In recent administrations, no one has appeared publicly tasked with outreach to corporate executives. That's because the West Wing was filled with former ones. But when the administration listens so intently and then doesn't take action, it leaves the impression no one understands how their policies are creating uncertainty, Chavern said.
"Business leaders have had an opportunity to make their point, but it didn't seem to have any effect," he said. "Eventually, people get it, that while the administration might have you over for dinner, it doesn't necessarily improve their policies."
Another factor, said William Daley, the former U.S. Commerce Secretary and now Midwest chairman of JPMorgan, is the rhetoric.
Exhibit A: President Obama tells NBC's "Today" show that he has consulted with experts, so he knows "whose ass to kick" for the Gulf oil spill.
"On a host of issues the rhetoric implies more regulations and more oversight, and that frightens business leaders across industries," Daley said.
Here's what is known. A food-safety bill is likely, but the climate-change bill is dead.
When asked why it died, Exelon CEO John Rowe, a chief proponent, said, "The president put the health care bill first and cap-and-trade second. And the health care debate cauterized Congress."
Democrats also are at risk of losing control of the House of Representatives, giving opponents more of a reason to wait things out.
"The folks in D.C. are not enjoying life right now," Rowe said.
Rep. Daniel Lipinski, D-Ill., has supported many of the administration's policies, such as aid for automakers; he wishes they'd done more, including a transportation spending bill; ; and he opposed health care reform.
But after all of that activity, more than a year and a half's worth, Lipinski said he is sure of one thing: Blaming the last guy "isn't going to fly anymore."
Melissa Harris can be reached at email@example.com or 312-222-4582.
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