Charles Dharapak/ASSOCIATED PRESS
President Obama greets the U.S. Chamber of Commerce audience members after his speech.
President Obama greets the U.S. Chamber of Commerce audience members after his speech. Charles Dharapak/ASSOCIATED PRESS
Appealing to their sense of patriotism, President Obama asked U.S. business leaders Monday to start making investments, with the cash they've been stockpiling, that would create domestic jobs.
In a speech at the U.S. Chamber of Commerce, Obama acknowledged the need for government to provide the best policy climate possible for American businesses to be competitive. And he cited a number of actions his administration has taken and proposed along those lines.
But his main message, he said, was for business leaders to act to create jobs and more business activity in the U.S.
The president acknowledged that senior corporate managers have a responsibility to their shareholders. But he urged them to regard more than their balance sheets in their decision-making.
In imparting that message, he echoed President John F. Kennedy's famous inaugural speech call to action for Americans to rally to their nation's cause:
Now, I understand the challenges you face. I understand that you're under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders.
I get it. But as we work with you to make America a better place to do business, ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation.
Later, the president drove home his main point:
Now, right now businesses across this country are proving that America can compete. Caterpillar's opening a new plant to build excavators in Texas that used to be shipped from Japan. In Tennessee, Whirlpool is opening their first new U.S. factory in more than a decade. Dow is building a new plant in Michigan to manufacture batteries for electric vehicles. A company called Geomagic, a software maker, decided to close down its overseas centers in China and Europe and move their R&D here, to the United States.
These companies are bringing jobs back to our shores. And that's good for everybody.
So if I've got one message, my message is: Now is the time to invest in America. Now is the time to invest in America.
Today, American companies have nearly $2 trillion sitting on their balance sheets. And I know that many of you have told me that you're waiting for demand to rise before you get off the sidelines and expand, and that with millions of Americans out of work, demand's risen more slowly than any of us would like. We're in this together.
But many of your own economists and salespeople are now forecasting a healthy increase in demand. So I just want to encourage you to get in the game.
As part of the bipartisan tax deal we negotiated, with the support of the chamber, businesses can immediately expense a hundred percent of their capital investments .And as all of you know, it's investments made now that will pay off as the economy rebounds. And as you hire, you know that more Americans working will mean more sales for your companies.
That last point would be key to business leaders. While they are as patriotic as the next American, the impact on their top line revenues and bottom line profits is, of necessity really where the rubber meets the road for business people.
The chamber's headquarters is only a few hundred yards across Lafayette Park from the White House. They are indeed so physically close, that Obama told his audience that he walked to the speech.
But as near as the chamber is to the White House, there was a great deal of psychological distance between the two.
The president's visit was yet another in a series of actions meant to improve relations between his administration, which fairly or unfairly, was perceived as hostile to corporate interests, and the business community.
At the top of his speech, for instance, Obama mentioned his new White House chief of staff, William Daley, who was a top official at JP Morgan Chase in the Midwest and served as Commerce Secretary during the Clinton Administration.
Naming Daley to that job was seen as an important signal from Obama that he meant business, so to speak.
Obama also used the speech to make the case for sound federal regulation as well as his health care law.
As for regulation, Obama cited several historic examples in which U.S. businesses warned, Chicken Little like, of calamities that befall their industries or the U.S. economy with the imposition of regulations now taken for granted. He said:
And the fact is, when standards like these have been proposed in the past, opponents have often warned that they would be an assault on business and free enterprise. I mean, we — we — we can look at the history in this country.
Early drug companies argued the bill creating the FDA would "practically destroy the sale" of "remedies in the United States." That didn't happen. Auto executives predicted that having to install seat belts would bring the downfall of their industry. It didn't happen. The president of the American Bar Association denounced child labor laws as "a communistic effort to nationalize children." That's a quote.
None of these things came to pass. In fact, companies adapt, and— and standards often spark competition and innovation.
Obama cited the example of federal energy efficiency requirements for refrigerators. Those rules helped spur appliance manufacturers to make refrigerators not just more efficient but more convenient for consumers.
Meanwhile innovations helped significantly reduce their sale price to consumers. Meanwhile, manufacturers not just met the federal targets but consistently exceeded them, the president said.
The president also defended the new health care law as meant to make the competitive business climate better for companies.
We simply could not continue to accept a status quo that's made our entire economy less competitive, as we've paid more per person for health care than any other nation on earth. And we could not accept a broken system where insurance companies could drop people because they got sick, or families went bankrupt because of medical bills.
I know you have concerns about this law. But the non-partisan congressional watchdogs at the CBO estimate that health care tax credits will be worth nearly $40 billion for small businesses over the next decade. And experts – not just from the government, but also those commissioned by the Business Roundtable – suggest that health insurance reform could ultimately save large employers anywhere from $2,000 to $3,000 per family.
House Speaker John Boehner (R-Ohio) wasn't buying Obama's argument that his administration has been pro-business and is poised to become moreso:
An excerpt from a statement issued by his office:
"President Obama has retooled his rhetoric, but not his job-destroying policies, which are eroding confidence, fostering uncertainty, and crowding out private investment. Far from changing tack, his administration is taking steps to protect the job-crushing regulations in its health care and permanent bailout laws, while plotting a new backdoor national energy tax. Time and again, the Obama Administration has used its regulatory powers to go around Congress and impose hidden taxes on employers and small businesses. Instead of committing to much-needed spending cuts and reforms, President Obama has urged Congress to raise the debt limit and pass more ineffective 'stimulus' spending disguised as 'investment.' It's clear from his policies that President Obama isn't as interested in winning the future as he is in rigging it for big government."
An obvious challenge Obama's new appeal to patriotism faces is that while it might work with some American business leaders, globalization means many U.S. businesses are owned and operated by non-Americans. So the president's appeal to patriotism might be expected to have less of an appeal to them.
Also, the U.S. isn't the only large economy concerned with employing its people. The Chinese government is under enormous pressure to do the same. That's a major reason it keeps its currency artificially low to give Chinese products a competitive advantage in global markets.
Some critics could accuse the Obama Administration of practicing economic nationalism, the same thing the U.S. accuses China of, and thus undercutting the American argument for China to change its practices.