Obama and Business: Time for a “January Thaw”?

20 Jan, 2011

By Doug Pinkham
Public Affairs Council President

January 20, 2011

President Obama felt misunderstood.

Early last year the president complained in a BusinessWeek interview that he didn’t deserve his reputation for being anti-business. “We are pro-growth,” he insisted. “We are fierce advocates for a thriving, dynamic free market.”

When asked why the reputation persisted, his response was “I think that is a good question.” Obama placed much of the blame on special interests misrepresenting his intentions. If only CEOs realized how much his policies would help the economy and corporate growth, he said, they would be more supportive of his agenda.

Part of the president’s problem, as I wrote at the time, was that the White House seemed unaware of how much bad feeling and uncertainty his harsh rhetoric about corporations had created. His attempts to placate the left wing of the Democratic Party had needlessly alienated companies that could have been allies for his policy priorities.

Plus, vague statements about growth, innovation and prosperity don’t do much for business people. CEOs don’t expect government to side with them all the time, but they want to see tangible signs of support now and then. And they certainly don’t appreciate over-the-top speechifying about evil corporations.

It’s clear that Obama is trying again to establish his credibility with business leaders – and this time he is taking specific steps and choosing his words carefully. First, he compromised with Republicans to approve an extension of the Bush-era tax cuts – a move that pleased small businesses, gave a boost to the stock market and showed his willingness to compromise.

Then he tapped former Commerce Secretary Bill Daley as his new chief of staff. Why Daley? “He’s led major corporations,” said the president at the welcoming ceremony. “He possesses a deep understanding of how jobs are created and how to grow our economy.”

This week, the president ordered a government-wide review of regulations to be sure new rules preserve safety, health and the environment while also promoting economic growth. At the same time, the order is designed to remove outdated rules that stifle job creation and make the U.S. economy less competitive.

The order was newsworthy for two reasons: for Obama’s acknowledgement that sometimes regulations conflict with one another, don’t pass a cost-benefit test or are, in his words, “just plain dumb;” and for the venue he chose to announce the executive order – the op-ed pages of The Wall Street Journal.

While it’s tempting to dismiss such pronouncements (Presidents Bush and Clinton issued similar executive orders) it’s worth noting the change in tone coming from the White House:

But creating a 21st-century regulatory system is about more than which rules to add and which rules to subtract. As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends-giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices. And it means making sure the government does more of its work online, just like companies are doing.

Yes, the president just said he wanted more input from businesses and that federal agencies should act more like companies. This is the same White House that told the Commerce Department and other agencies in 2009 that registered lobbyists (advocates with valuable expertise on issues such as trade) were no longer permitted to serve on federal advisory boards.

Reaction from the business community to the president’s executive order has been generally positive, though the directive is mostly symbolic. As The New York Times reports, the order won’t apply to independent federal agencies such as the SEC and the Federal Reserve, which are writing new bank regulations, nor to the Federal Communications Commission, which has a huge regulatory mandate. What’s more, the White House has said the order won’t cover the work being done to draft healthcare reform regulations.

And yet, just as Obama’s words caused him unnecessary trouble with the business community last year, this rhetorical shift – especially if it is accompanied by a genuine openness to question old assumptions – could set the stage for a “January thaw” in his relationship with corporations. Given the political challenges facing the White House and Congress this year, that would be a smart move.

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