President Obama employed a bizarre strategy in his peace-making speech to the U.S. Chamber of Commerce. Appearing in the guise of an olive branch-bearing business advocate, the president mapped the Obama vision for the dual roles of government and the private sector. Mr. Obama’s words were clear. He was there to help. He was there to extend a hand, and perhaps to threaten.
A few days before the president’s speech, Fed Chairman Ben Bernanke tossed out a few words of his own, positing a dismal outlook for job seekers:
Even so, with output growth likely to be moderate for awhile and with employers reportedly still reluctant to add to their payrolls, it will be several years before the unemployment rate has returned to a more normal level.1
Mr. Bernanke’s assessment of the recovery was not much brighter, though his statement was hardly a revelation:
Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.2
Four days later, the president feigned a public reconciliation with the business community. Mr. Obama has always had difficulty disguising his feelings towards the private sector, and this speech was no exception as he discussed the need for education, infrastructure, and regulation. Here is a quick deconstruction of the president’s take-home message:
Business serves profit and shareholders:
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.3
Business owners benefit unfairly from prosperity:
If we’re fighting to reform the tax code and increase exports to help you compete, the benefits can’t just translate into greater profits and bonuses for those at the top.4
The president made a disturbingly vague allusion to legislation that might prevent the unfairness of class:
We can’t go back to the kind of economy and culture that we saw in the years leading up to the recession, where growth and gains in productivity just didn’t translate into rising incomes and opportunity for the middle class. That’s not something necessarily we can legislate, but it’s something that all of us have to take responsibility for thinking about.5
Troublesome red tape stifles productivity. Mr. Obama is working on that problem, forgetting the astronomical number of 1099s that will be generated by his health care bill:
Already we’re dramatically cutting down on the paperwork that saddles businesses with huge administrative costs.6
The president took a curious turn. He disregarded the private sector’s fear of regulation, and its stifling effect on job creation. Mr. Obama suggested that his type of regulation was necessary, even good, while sliding in a plug for Wall Street reform and the recent food safety bill:
Few of us would want to live in a society without rules that keep our air and water clean; that give consumers the confidence to do everything from investing in financial markets to buying groceries.7
We must make sure that we have enough regulation:
I also have to point out the perils of too much regulation are also matched by the dangers of too little. And we saw that in the financial crisis, where the absence of sound rules of the road, that wasn’t good for business.8
Business needs to get it through its skull that it needs and wants regulation:
Even as we eliminate burdensome regulations, America’s businesses have a responsibility as well to recognize that there are some basic safeguards, some basic standards that are necessary to protect the American people from harm or exploitation. Not every regulation is bad. Not every regulation is burdensome on business. A lot of the regulations that are out there are things that all of us welcome in our lives.9
And there is even more to it than just being regulated:
Of course, your responsibility goes beyond recognizing the need for certain standards and safeguards.10
Perhaps our president is frustrated that the private sector has not stepped up to the plate and created the jobs he needs to prove the success of his vision. The speech advocated the infrastructure and education initiatives we have heard about since the first days of the Obama presidency. All that has changed is the requirement that our business community admit that it needs, even wants, to be regulated.
To those of you looking for a job, best of luck.
Next: why all this talk about regulation?