Photo: The White House via Flickr
Last week The White House began a major offensive to convince the private sector that it’s not actually anti-business.It probably won’t accomplish all that much on that front, but what’s important is the acknowledgment that this is becoming a real issue.
After all, The White House continued wholeheartedly with the bailout of Wall Street, one of the most pro-business (if not, exactly, pro-capitalism) experiments ever undertaken.
Mike O’Rourke of BTIG has some good thoughts on why:
Throughout 2009, we argued adamantly in favour of the economic policies the President’s team laid out to respond to the financial crisis. We also credited the President, who is often accused of having socialistic tendencies, for ignoring calls from world renowned economists, some of who have Nobel Prizes, to nationalize the U.S. Banking system. The President’s modus operandi throughout most of 2009 was to “speak loudly and carry a toothpick.” He seized every opportunity to fuel the fire of populism and direct the public’s anger to corporate America, yet he saved the banks. Here in 2010, it is a somewhat different story. In an effort to make use of his supermajorities in both houses of Congress before they disappear, the President spent the first 6 months ensuring that health care reform and financial reform are passed while the populist fires are still burning. Needless to say, spending the first half of the year re-regulating two major industries in the midst of an economy where the Unemployment Rate has hovered at or just below 10% for nine months hardly promotes thoughts of being business friendly. Although we all know financial reform was necessary, no industry, whether Financial, Health Care or Energy, feels comfortable hearing about sweeping rule changes, especially when many of the unintended consequences will not unfold for years.
The BP spill and the deepwater drilling moratorium only cemented anti-business fears. The Administration talks about safety being the issue, but the people in Louisiana see it as a jobs issue. The statistical likelihood of another such accident occurring again in the next year is small. We are told that the government wants to study the situation and safety issues, yet the irony is the MMS regulates this industry and is being berated by the Administration for being corrupt. If there was ever a prime example of why the opposition does not like big government, it is this corruption. For those looking at the jobs lost in this situation, one can understand the frustration. A government that inadequately or corruptibly regulated this situation to begin with is telling people out of work that they cannot go back to work until they examine the situation. Going forward, the best regulator of the deepwater drilling industry will be the fact that no publicly traded energy company will want to see half its market capitalisation evaporate in the span of weeks and be forced to post tens of billions in escrow for a clean up – it does not help profit margins. Now that the judicial branch has weighed in multiple times to end the moratorium, the more the Administration fights, the more it appears anti-business, or even worse, anti-jobs.
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