Thursday, December 16, 2010

Obama and the CEOs

President Obama met with a group of 20 corporate CEOs on Wednesday. The CEOs were positive about the meeting going into it, as reported by Mike Dorning and Mark Drajem Obama Meeting CEOs Today Shows Business President Who Delivers Their Gains Bloomberg 12/15/2010:

"It’s a great step he’s taking, meeting with CEOs," General Electric Co. CEO Jeffrey Immelt, 54, who will attend the session, told reporters yesterday after an investor meeting in New York. The tax cuts and CEO gathering together "are real positives."
After the meeting, a couple of the CEOs talked to the PBS Newshour's Gwen Ifill, good buddy of Condi-Condi Rice.

Motorola's Greg Brown and Honeywell's David Cote agreed that they had a pleasant meeting with the President. And they said, to paraphrase a bit, we expect the little punk to keep doing what he's told. Brown elaborated:

The good news is, it appears the Bush tax credits will go through. The good news is beginning free trade agreement with Korea, with, hopefully, Panama and Colombia and the transpacific partnership to follow.

What we're saying is, that's good, and that takes uncertainty, some of it, off the table. But in the meantime, we still have a spending problem. And things like entitlement reform and reining in our government spending is absolutely fundamental. And I think that we're involved in those discussions.
So, as long as Obama's keep delivering tax cuts to CEOs, passing job-killing trade agreements and flushing Social Security down the drain, they'll keep patting him on the head and praising him for doing a good job.

Obama's meeting with the CEOs Wednesday reminded me of this observation by David Bromwich in Diary/The Establishment President London Review of Books 05/13/2010:

Once again, Obama is choosing to leave behind the popular base of the Democratic Party and build an ecumenical consensus which starts in his head.
Just for fun, try to guess which political issue he's talking about there. It's not easy, is it? There are more to choose from all the time.

The process seems to be intuitive, and to explain it one can only fall back on psychology. Obama sees himself as the establishment president. If a populist insurgency on the right presses hard against his legitimacy, if disappointed supporters stop giving money or knocking on doors, still he has the confidence of a leader whose standing is buoyed up by corporate leaders, by a famous general and the chairman of the joint chiefs of staff, by a decent preponderance of Wall Street, and by the mainstream media, whose resources he deploys and channels with a relentlessness no other president has approached. Barack Obama, in the first 392 days of his presidency, put himself on public view for photographs, interviews, ceremonies, or mingling with the public in one way or another on all but 27 days. He gave more interviews in his first year than Bill Clinton and George W. Bush combined. His approval rating, which stood at 70 per cent a year ago, now hovers around 45 per cent, but it is possible for a president of doubtful popularity to win re-election if the mainstream voices rally to his side and the opposition lacks credible talent. Many people who voted for Obama in 2008 were voting against McCain and Palin. The same people are capable of voting that way again.

Obama's calculations, then, are plausible and may pay off; yet he has made mistakes nobody would have predicted. The truth is that he did not come into office a fully equipped politician. He was new to the national elite and enjoyed his membership palpably. This came out in debates and town meetings where he often mentioned that the profits from his books had lodged him in the highest tax bracket. It would emerge later in his comment on Lloyd Blankfein and Jamie Dimon, the CEOs of Goldman Sachs and J.P. Morgan: 'I know both those guys; they are very savvy businessmen.' One can't imagine Franklin Roosevelt or John Kennedy saying such a thing, or wanting to say it. They had known 'those guys' all their lives and felt no tingle of reflected glory. Obama has not yet recognised that his conspicuous relish of his place among the elite does him two kinds of harm: it spurs resentment in people lower down the ladder; and it diminishes his stature among the grandees by showing that he needs them.
I'm guessing Wednesday's meeting with his CEO friends was yet another step in that continuing process.

In The New Era of Cooperation Between the White House and Big Business 12/15/2010, posted before Wednesday's meeting, Robert Reich notes sourly:

Jamie Dimon, chairman and CEO of JPMorgan Chase & Co., praises the President’s agreement with Republicans to extend the Bush tax cuts. ...

Dimon’s compensation over the last three years has averaged $21,991,394 a year. The tax deal agreed to between President Obama and the Republicans will give Dimon and extra $1,179,000 next year, according to an analysis by Citizens for Tax Justice.

The bank Dimon heads was also the beneficiary of the giant Wall-Street bailout of 2007 and 2008. JPMorgan Chase & Co, along with other Wall Street banks, also poured millions of dollars into a lobbying campaign to water down the financial reforms Congress considered earlier this year.
The political elite of both parties are seriously out of touch with the needs and concerns of the majority of the public. It's not CEOs with whom Obama most urgently needs to meet.

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