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Pity the poor CEOs

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Paul Krugman CHALLENGES the notion that the Obama administration is anti-business.

An excerpt:

Job creation has been disappointing, but first-quarter corporate profits were up 44 percent from a year earlier. Consumers are nervous, but the Dow, which was below 8,000 on the day President Obama was inaugurated, is now over 10,000. In a rational universe, American business would be very happy with Mr. Obama.

But no. All the buzz lately is that the Obama administration is “antibusiness.” And there are widespread claims that fears about taxes, regulation and budget deficits are holding down business spending and blocking economic recovery.

How much truth is there to these claims? None. Business spending is indeed low, but no lower than one would have expected given widespread overcapacity and weak consumer spending. Business leaders are feeling unloved, but giving them a group hug won’t cure what ails the economy.

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4 Comments

  1. DingDong

    Has Krugman ever ran a company or had to make payroll? I doubt it. What has he given us? Books, lectures and columns. Where does the 44% of increased profits come from? Does we he get that number from the increase in the Dow? More crap from an academic.

  2. expdoc

    Are Krugman and Pat both bought and paid for? They seem to be highlighting the administration’s talking points in lock step.

    http://online.wsj.com/article/SB10001424052748704111704575355413601768820.html?mod=WSJ_Opinion_AboveLEFTTop&mg=com-wsj

    The big political news out of Washington yesterday is that the White House wants you to know that President Obama is not antibusiness. That reassuring word comes in a dispatch from Politico.com quoting senior White House aides that they have launched “a coordinated campaign to push back against the perception” that its agenda is hostile to business.

    How in the world did anyone get that idea? Perhaps the feeling set in sometime between the President’s public trashing of the Chrysler bond holders and his use of the insurer Wellpoint as a piñata to pass ObamaCare. Or maybe it was sometime after his Administration’s fifth or sixth tax increase proposal, its disdain until recently for trade promotion, and its unleashing of new regulations across any industry you want to name.

    For a summary of the Administration’s antibusiness agenda, consult the Business Roundtable’s recent 54-page compendium. But don’t read it before you go to bed because you’ll wake up with nightmares if you’re an employer.

    Our guess is that the timing of this White House campaign has a lot to do with the Roundtable’s broadside, which has shaken even some of the President’s media friends. When even Newsweek columnists and The Atlantic start to turn on this Administration, you know things are bad.

    Another motivator must be this week’s Washington Post story detailing that Wall Street and the financial industry have stopped writing as many checks to Democratic House and Senate candidates after two years of White House banker bashing. Big Labor can’t pay for every TV ad, and nothing concentrates the political mind so much as the lack of campaign cash.

    However, our favorite line from yesterday’s Politico.com story is this one: “And it is more than just politics: Obama’s aides believe confidence in the general direction of White House policy has an effect on the willingness of corporations to hire, invest and push the economy toward a more solid recovery.” You think?

    However late the revelation, we suppose it’s progress if Democrats are figuring out that business confidence is crucial to nurturing a fragile economic recovery into a durable expansion. U.S. companies have an estimated $2 trillion in cash that they could deploy to create new jobs or buy equipment, but they aren’t about to do so until they know what their costs will be. We warned the White House about this early on when we wrote about the dangers of a “capital strike.”

    The problem for Mr. Obama at this stage is that business will need more than words to conclude there’s been a real political change. He’ll have to make some major policy shifts, such as calling off next year’s big tax increase. More important still, no one in business will trust any of this as long as Nancy Pelosi and Harry Reid run Congress

  3. Mike Carroll

    Pat-do me a favor. Since you seem to be so tight with Nobel Laureate Paul Krugman, could you please let me know what drugs he is currently consuming? There are times why I too wish to escape reality.
    Further evidence, if any were needed, of the degradation of the Nobel prize process.

  4. expdoc

    bigdave

    Don’t expect any outcry over Cameron’s millions. After all, he cares deeply about the environment and only made that movie to educate the masses about the evils of corporate greed and the inherent good of the indigenous people. He deserves every penny of profit just like Al Gore deserves to profit from his green technology.

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