It’s Obama v Reagan as the Business President.
Republicans like to claim their party as the party of business, even though their policies (like refusing to lower taxes for small businesses unless too big to fail got some as well) aren’t exactly helpful for the economy. So on President’s Day, I thought we should pit Reagan against Obama and ask whose presidency was better for corporate profits?
In January, Bloomberg reported that corporate after-tax profits had grown 171% under President Obama. That’s more than any president since World War II.
In fact, “Profits are more than twice as high as their peak during President Ronald Reagan’s administration and more than 50 percent greater than during the late-1990s Internet boom, measured by the size of the economy.”
Corporate profits under Obama are more than twice as high as they were under Reagan.
Corporate profits are “now at their highest level relative to the size of the economy since the government began keeping records in 1947, according to data compiled by Bloomberg.”
Before conservatives busy themselves unskewing the math, the business community did it for you, my friends. No need to jump off of a building, business leaders say they are doing this well, but guess what, it’s all due to their greatness, low labor costs and low interest rates. They say Obama doesn’t deserve any credit, and no, they will not share their toys with you even though you bailed them out. Fungu.
It’s not a surprise that business leaders are surly and petulant in the face of their huge profits. You see, everyone wants to have their egos stroked and President Obama snubbed them during his first term. Liberals might not believe this, but business leaders say that the President’s refusal to sit down with them and hear them out alienated the community.
But Obama has sat down with them. For example, in 2011, they told him that regulations were inhibiting business growth. (One might ask, what regulations, but that’s for another day.) Obviously, this isn’t true, unless by inhibiting business growth they mean doubling their profits.
The executives offered a list of policies they see as inhibiting job creation and business growth, many centered on what they see as overregulation and government indecision, one person said. Another said executives suggested the administration alter its tone when speaking about business. Another suggestion, to aid hiring, was to reduce the taxes on selling a home so it would be easier for people to move for jobs.
Yes, if only Obama would “alter his tone” about business, things would be rosy. Oh, they already are rosy for business, but not so rosy for the people? Now business is mad, even though their profits are soaring. Because, you see, they want their ideas to be heeded by the President, even if they are bad ideas. Implement the fail, President Obama, or else.
When Obama met with business leaders in December of 2012, many of them opposed his tax increases on the rich. Lloyd C. Blankfein, chief executive of Goldman Sachs, wrote in the Wall Street Journal that higher taxes for the rich were okay, but cuts needed to be made to “entitlement programs”, “I believe that tax increases, especially for the wealthiest, are appropriate, but only if they are joined by serious cuts in discretionary spending and entitlements.”
These attitudes are what makes the business community seem as tone deaf as they accuse the President of being; while they make huge profits, they fail to grasp that the middle class and poor are suffering. Not everyone got bailed out, and not everyone is doubling their profits. It’s tough to understand how business sees further impoverishing their customers as a great business plan. Consumers are the demand side of the equation, and they need money in order to make purchases. (This explains why President Obama chose to fight for unemployment benefits over tax cuts for the rich in 2010 — it was all about a secret stimulus, and it worked, much to the chagrin of some people.)
Of course, experts disagreed with the business leaders. They say the stimulus stopped unemployment from becoming a disaster. Bloomberg reported, “In a February 2012 survey, 80 percent of senior economics professors said unemployment was lower at the end of 2010 than it would have been without Obama’s stimulus spending.”
Conservatives are probably googling how to blame Obama for this so they can resurrect their Reagan hero on President’s day. But we all know that reality, math, and expertise play very small (if any) roles in conservative “ideas” these days. Just stick with what works — self-righteous claims of persecution in the face of huge profits is always a win for public relations. If that fails, blame Obama.
Business leaders just can’t seem to face the daunting prospect of challenging their beliefs with the facts. Why not ask what, other than their greatness, low interest rates and low labor costs, might be contributing to their high profits. After all, weren’t they always “great”?
Either Obama isn’t overregulating them or regulations are not the death of business.
Which is it?
In the war of Obama v Reagan as the Business President, the math says President Obama wins by a landslide. Corporate profits are twice as high as they were under Reagan. That fact means that some of the business community’s ideas about the economy and indeed their own businesses are not accurate.
Maybe the business community needs to have a sit down where they listen instead of speak. Maybe a government that looks out for the people is not the death of business after all. Maybe the two can co-exist. Maybe common sense regulations and oversight actually help business by saving it from itself (see too big to fail).
Ronald Reagan is supposed to be the business president of all time. He’s the patron saint of trickle down deregulation. But corporate profits under Obama are double what they were under Reagan. It’s enough to make smart people question what they believe.
Happy President’s Day, America.