Two years ago, Bloomberg ran a survey of American investors. Three-quarters of them believed Obama was against business. Ivan Seidenberg, the CEO of Verizon, was moved to declare the president hostile to investment and job creation.
Today, it’s a different picture. The president, after blasting fat cats and the self-interest of Wall Street for years, has made a landmark move in his relationship with companies: he is taking corporate donations to fund the parade and parties of his second inauguration. Someone has to pay for the party, so you might as well invite the people with money.
Granted, it’s an uneasy detente: Obama’s team made it clear that it is only accepting the filthy lucre of corporate America because their old donors are tapped out. And there’s an arm’s length aspect, too: the Obama campaign is warily posting the names of all donors on the web, and it won’t accept sponsorships of any kind or donations from lobbyists.
Still, what a turnaround. If you add the inauguration pivot to the president’s other recent contacts with the business world, you get something that looks almost like friendliness.
In the past few weeks, the president has called the members of the Business Roundtable “patriots.” He seemed to renounce his previously disdainful stance toward CEOs, saying: “I realize in the first four years my relationship with the business community was skewed.” He even told Bloomberg TV: “There’s a lot of confluence between my agenda and the business community’s,” which makes one think: really? When did that happen?
Add to that the fact that the White House has an open door for the pinstriped suits of Wall Street financiers and corporate CEOs if they want to talk about the fiscal cliff. It’s so comfortable between the White House and CEOs that watchdogs are worried, in fact, that the president is ceding too much power to corporate interests.
What happened to the old bile, on both sides? Shrug and call it bygones.
That leaves the question: are these approaches and blandishments the tentative beginnings of a new pragmatism emerging in Obama’s relations with business leaders?
It looks that way. The president used to be criticized by his Republican adversaries as having a “glass jaw.” He was relatively new and sensitive to the low blows and body slams of partisan politics. But his management of the fiscal cliff discussions, so far, show that he may be finally learning some good old-fashioned Washington jiu jitsu.
There is no better way to drive a stake in Republican negotiators on the fiscal cliff than to woo their most beloved base: the business community. Obama has recognized that, when it comes to the fiscal cliff, the rift between him and corporate leaders is shallower than that between him and Republicans.
The calculus is clear: Obama’s single-minded, most often-stated goal in the ongoing debt debacle is to raise taxes on the top 2% of earners. Republican leaders draw a hard line against that proposal. CEOs – surprise! – aren’t so resistant. This is where Obama is trying to drive a wedge between corporate leaders and the Republican leadership.
It’s not as if he has to pound that wedge very hard. Business leaders desperately want to be wooed by Obama; they have spent an unaccustomed time wandering in the political cold as the financial crisis, recession and weak recovery weakened their negotiating position.
In October, about 80 CEOs of major companies – backed by the fiscal cliff duo of Alan Simpson and Erskine Bowles – tried to send a love letter to Obama. They agreed that “higher revenue” has to be a part of a plan to avoid the fiscal cliff. In Washington patois, “higher revenue” means higher taxes. That armed Obama admirably to start reaching out to Wall Street and corporate America: if business leaders are willing to pay higher taxes, after all, why are Republican leaders still refusing? These CEOs wafting through the White House provide Obama with a valuable bargaining chip.
Like all Washington power plays, this one has complications. Obama needs business leaders to help him win the fight on the fiscal cliff – but it doesn’t help his image with his die-hard fans. Those voters who support Obama and are still angry with Wall Street after the financial crisis may regard this new partnership with complicated feelings.
The support of those CEOs doesn’t come without strings: those business leaders don’t love Obama’s economic policies, nor are they for raising taxes willy-nilly. Instead, they largely like the Simpson-Bowles plan, which cuts programs like Social Security and Medicare. The President opposes any cuts to those programs.
Over time, those business leaders will also want to bend the president’s ear for a greater purpose: they will want tax breaks not for themselves – they can handle that with savvy accountants – but for their companies.
Many corporate leaders support the idea of a tax holiday that would allow them to bring back cash currently trapped in their overseas divisions. They promise that this cash, once “repatriated,” would go into the economy. It’s a hard sell: that tax holiday was tried once, and the corporations just kept the extra cash for themselves.
This big thaw between Obama and CEOs may also freeze up after the CEOs cease to be useful to the president. As many CEOs could have learned over the past four years, any line to the White House is better than a closed line. They just have to see whether they can hold his attention for the next four years.