Earlier this year, Barack Obama formed a new presidential advisory committee on jobs and competitiveness that the White House hoped would alleviate at least two critical problems for the administration. First, after spending a year shoving ObamaCare down the throats of voters who clearly didn’t want it, Obama needed to re-establish that jobs had become a priority again. Second, and only slightly less important, Obama had to bolster the private-sector bona fides for his administration, which almost entirely lacked any such experience.
Obama invited the heads of several American companies to join his panel, and they’re probably delighted with the access. But as Bloomberg discovered, it may not be making them any more confident of Obama’s economic policies:
Seven publicly traded U.S. corporations represented on President Barack Obama’s advisory council for jobs and competitiveness — including General Electric Co. (GE) andIntel Corp. (INTC) — have devoted a growing pool of their non-U.S. earnings to investments in other countries.
As a group, multinational companies with current or former chief executive officers on Obama’s jobs council have, over the past four years, almost doubled the cumulative amounts they’ve reinvested overseas, according to data compiled by Bloomberg.
By doing so, companies may be able to take advantage of faster-growing markets or lower production costs, and they can defer U.S. income taxes on profits from overseas sales. Underscoring the difference between corporate interests and the national interest, they’re also investing money elsewhere that could be helping the U.S. economy, said former U.S. Labor Secretary Robert Reich.
“That’s a signal that they are betting less on America,” Reich said. “We’ve got to understand there’s a fundamental difference between the competitiveness of these companies and the competitiveness of America and American workers.”
In 2010, the corporations represented on Obama’s council permanently reinvested $197 billion in overseas profit. That’s close to double the figure from 2006. The companies kept the money offshore during the Great Recession, and seem pretty unenthusiastic about investing at home now despite Obama’s claim of recovery in the US.
This could change, of course, now that Obama has a panel of advisers that can explain how taxes and increased regulation impact investment decisions in the real world. That would require Obama to actually take their advice, though, rather than operate as political cover for a continued push for Obamanomics. We saw with the debt commission how seriously Obama takes advice from his own blue-ribbon panels, and there’s no reason to believe that this administration’s attitudes toward the private sector have changed in the slightest.
Keep your eyes focused on the future investment decisions of these advisers. If they’re not buying Obamanomics, there’s no reason for us to buy it, either.