President Obama is putting the nation’s economic woes on the backs of businesses, urging them to start hiring in an effort to grow the economy. In a speech to U.S. Chamber of Commerce members, Obama stressed to business members that “we can and must work together” to promote economic growth, adding that “businesses also have a responsibility to America.”
Obama encouraged businesses to take the nearly $2 trillion in cash on their balance sheets and invest it in America. “Ask yourselves what you can do for America,” he said. “Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation.” He told business owners in attendance that his administration will “help lay the foundation for you to grow and innovate” by investing in infrastructure and education and removing tax codes, regulations and other “barriers that make it harder for you to compete.”
Although the president was somewhat vague on how the government would help businesses recover and begin hiring in this weak economic climate, he did criticize the “burdensome corporate tax code” and promised to lower corporate taxes by eliminating tax loopholes. And although he promised to further trade deals with Colombia and Panama to help U.S. businesses expand, he failed to provide any timetable on getting the pacts approved. “I am eager to work with both parties and with the Chamber to take additional steps across the budget to put our nation on sounder fiscal footing,” the president said.
He stressed to the group, “I understand the challenges you face. I understand you are under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders and the pressures that are created by quarterly reports. I get it.” However, companies are seeking more assurances, particularly on regulations, infrastructure and trade. “The reason the companies are sitting on $2 trillion worth of cash is because of uncertainty,” said U.S. Chamber of Commerce President Thomas Donohue.
The relationship between Obama and the Chamber has not been an amicable one in past years. The U.S. Chamber of Commerce, the nation’s major business lobbying group, has been critical of Obama’s agenda that focuses too much on “big government.” And the White House criticized the Chamber for failing to disclose donors for its political ad campaigns against Democrats in 2010’s congressional elections.
U.S. Chamber of Commerce members listened politely to the president’s speech, but remained noncommittal in their response. White House spokesman Robert Gibbs played down the lack of enthusiasm by Chamber members, saying the president wasn’t seeking applause. Donohue responded to the president’s speech by saying, “We thought it was a good change in tone. He came, he visited, and we look forward to doing things together.” Other members, however, remained skeptical of Obama’s commitment to business. “Are they going to follow through or is this just the politics of saying the right thing and it stops there?” questioned Juliana Zoto Efessiou, a Chamber member who saw her bridal boutique fail during the recession but rebounded by starting a social media enterprise. Harold Jackson, chief executive of Buffalo Supply Inc., a medical supply business in Colorado, questioned Obama’s implication that businesses have a moral responsibility to put people back to work. “I think it’s a little outside the bounds to suggest that if we hire people we don’t need, there will be more demand,” said Jackson. Matthew Shay of the National Retail Federation also has doubts that business investments are the answer to economic recovery. “The recovery is going to be driven by the 70% of the economy that is consumption, not the 15% that’s investment,” he said.
Clearly Obama is cognizant of the fact that he needs the support of business to secure another four years in the White House. But if his reelection bid is to be successful, he needs to bring down the 9 percent unemployment rate and get Americans back working again. As such, he needs to rely on business to help him meet that goal. But it could take some convincing for the president to get business on his side. Bitter feelings remain after Obama’s sharp words on executive pay during the financial crisis and the business community is against the president’s healthcare reform and major overhaul of Wall Street. Time will tell whether Obama will put his words into action and whether the business community will take the olive branch that the President has extended.