Jan. 25 (Bloomberg) -- Who says President Barack Obama didn’t get the message of the 2010 midterm elections?
In the last few weeks alone, the president reconfigured his inner circle to look less like America and more like Bill Clinton’s White House.
He appointed one of those formerly disparaged “fat-cat bankers,” William Daley, as his chief of staff. Daley was Clinton’s Commerce Secretary and hails most recently from JPMorgan Chase & Co.
He retooled the President’s Economic Recovery Advisory Board, led by former Federal Reserve Chairman Paul Volcker, into the President’s Council on Jobs and Competitiveness, elevating General Electric Co. Chief Executive Jeffrey Immelt to the helm. “Jobs” and “competitiveness” are the new buzzwords, to be featured prominently in what is surely the most previewed State of the Union address in history this evening. (Jobs were supposed to be “the No. 1 focus in 2010,” according to Obama’s speech last year.)
In keeping with the new message -- “I get it” -- Obama signed an executive order instructing all federal agencies to review regulations and remove those that stifle job creation and reduce competitiveness. He unveiled his initiative in a Jan. 18 op-ed that appeared in, of all places, the Wall Street Journal. Not the New York Times or Washington Post, but the Journal, whose editorial page bills itself as the voice for “free markets and free people.” How symbolic.
Obama’s business outreach trickled down to the office of the vice president, where Joe Biden tapped former Clinton aide Bruce Reed, head of the centrist Democratic Leadership Council, to be his new chief of staff.
The president’s efforts, including his capitulation on an extension of the Bush tax cuts for all Americans, have paid off. His approval rating jumped to 49.8 percent this month, up from 45.6 percent at the time of the election, according to the Real Clear Politics average.
So is this just a public relations gambit designed to win back independents and assuage business concerns to ensure money and votes in 2012?
Of course it is. The real question is will there be any follow-through?
A careful reading of Obama’s words suggests he’s still stuck in a central-planning mindset. Obama introduces each new appointee as someone who knows how to “grow the economy” and create jobs. The president has been pressing his economic team to come up with job-creating ideas “that excite me,” according to Peter Baker’s cover story in the New York Times Magazine on Sunday.
Conflict of Interest
Clearly the 3.5 million jobs “created or saved” by Christy Romer’s econometric model (Romer was chairman of the president’s Council of Economic Advisers until September) didn’t convince anyone. Now Obama wants real jobs, more than the 1.3 million private-sector positions created in 2010, to buy him real votes.
Of course, Obama could have elevated Richard Trumka, president of the AFL-CIO, from his economic advisory committee to the top spot instead of Immelt, who has regular business before the administration and received a $16.1 billion Federal Reserve bailout in 2008. But why create the appearance of conflict of interest?
Obama doesn’t need any more advisers to tell him the U.S.’s 35 percent corporate tax rate, among the highest in the world, puts the nation at a competitive disadvantage. Or that taxing overseas profits when they’re repatriated to the U.S. doesn’t encourage businesses to bring that money home and invest here.
On the regulatory front, Obama’s intention to submit all federal rules and regulations to a cost-benefit analysis sounds nice, but what bureaucrat has ever declared himself redundant and written himself out of a job?
It reminds me of a joke about the tourist who goes to visit the Agriculture Department. As he’s walking down a long, empty hallway, he hears the sound of crying coming from an office. The tourist peaks his head in and asks the employee, sobbing at his desk, “What’s the matter?”
“My farmer died,” the employee replied.
The Department of Agriculture, like any government agency, never willingly cedes a part of its fiefdom.
In the 1700s, the U.S. was an agrarian nation with 90 percent of workers engaged in farming, according to Veronique de Rugy, senior research fellow at George Mason University’s Mercatus Center in Arlington, Virginia. Today the U.S. economy has highly productive agribusinesses employing less than 2 percent of all (legal) workers. Yet “the federal government continues to subsidize agriculture,” de Rugy said. “Spending for the Department of Agriculture in real terms went from $95 billion in 2000 to $142 billion in 2010.”
Obama’s major legislative initiatives -- health care and financial reform -- left it to regulators to write the rules necessary to implement the laws. To order a review of federal regulations in the face of so many to-be-written laws is talking out of both sides of your mouth.
So nice try, Mr. Obama. You’ll have to do better than executive orders and executive appointments to convince us you have the wherewithal of a business executive.
(Caroline Baum, author of “Just What I Said,” is a Bloomberg News columnist. The opinions expressed are her own.)
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