How far out of favor has Barack Obama fallen with the business community? Self-professed Obama supporter and occasional speechwriter Mort Zuckerman wrote a lengthy indictment of Obama’s economic policies in US News & World Report yesterday afternoon, outlining the many ways in which Obama has shown his hostility to capital and private markets. Zuckerman blasted his “gratuitous and overstated demonization of business,” and a lot more:
But one unfortunate pattern that has emerged in the last 18 months is to lay all the blame for our difficulties only on the business community and the financial world. This quite ignores the role of Congress in many areas, but most glaringly in forcing Fannie Mae, Freddie Mac, and the Federal Housing Administration to back loans to people who could not afford them. And not to mention the role of the Securities and Exchange Commission, which in 2004 sanctioned higher levels of leverage for financial firms, from 12 times equity to over 30 times equity.
This predilection to blame business is manifest in the unnecessary and provocative anti-business sentiment revealed by President Obama in a recent speech that was supposed to be seeking the support of the business community for a doubling of exports over the next five years. “In the absence of sound oversight,” he said, “responsible businesses are forced to compete against unscrupulous and underhanded businesses, who are unencumbered by any restrictions on activities that might harm the environment, or take advantage of middle-class families, or threaten to bring down the entire financial system.” This kind of gratuitous and overstated demonization of business is exactly the wrong approach. It ignores the disappointment of a stimulus program that was ill-designed to produce the jobs the president promised—that famous 8 percent unemployment ceiling.
As we have discussed, the media and the Democrats seem to forget about the primary role previous government interventions had in creating our current mess. The anti-capital rhetoric has been a calculation designed to distract people from the failure of previous social engineering — so that Democrats can offer even more interventions as a tonic, which is akin to offering Socrates a nice glass of potassium cyanide to cure his hemlock hangover. But it’s not just the rhetoric, Zuckerman insists, and delivers a devastating conclusion:
But it’s not just the rhetoric that undermines the confidence the business community needs to find if it is to invest. Consider the new generation of regulatory rules, increased bureaucracy, and higher taxes created by the Obama administration. For example, the new financial regulation bill includes nearly 500 “rule-makings,” studies, and reports, compared with just 14 in total for the controversial Sarbanes-Oxley bill, passed after the financial scandals of Enron and WorldCom. The disillusionment has spread to the Business Roundtable, the U.S. Chamber of Commerce, and the National Federation of Independent Business (NFIB), which represents small businesses that normally account for roughly 60 percent of job creation.
The chief economist of the NFIB, William Dunkelberg, put it clearly: Small business owners “do not trust the economic policies in place or proposed.” He also said, “The U.S. economy faces hurricane force headwinds and the government is at the center of the storm, making an economic recovery very difficult.”
Our economic Katrina, in short.
I’d say that the Hopeandchangillusion has worn off from Zuckerman and the entire business community — and the rest of those not living within ivory towers.