Friday, June 18, 2010

Corporate Going Gault

This is all sorts of foolishness.

Each of his confrontations with corporate executives had its own rationale. G.M. had become so uncompetitive, Mr. Obama argued, that its imminent collapse was threatening the jobs of millions of workers; the only way to save the company from its own worst instincts was to become its temporary owner and bring new blood into the boardroom. (It will take years to determine if that worked, but on Thursday, though it was overshadowed by the grilling of BP’s chief executive on Capitol Hill, G.M. announced it was forgoing its usual summer shutdown of most of its plants so it could meet renewed demand.)

The Wall Street executives who needed the government to prop them up, but still thought their services were worth millions a year, were cast by Mr. Obama as a shameless privileged class. Toyota was described as seeking profits over safety; Wellpoint, the insurance giant, was castigated for seeking to insulate itself from the new health care legislation by taking actions that the law will soon prohibit.

Against that backdrop, forcing BP to take a $20 billion bath — even before the inevitable lawsuits are filed — seemed an easy decision. Mr. Obama had no legal basis for the demand, but concluded he did not need one. “He had a power other presidents have used — you call it jawboning,” Mr. Emanuel said.

The question is whether the cumulative effects of these actions create an impression that, over the long run, may make it harder to persuade both American and foreign corporations to cooperate with Mr. Obama’s program to reinvest and reinvigorate the American economy.

“He’s walking a very fine line here,” said Jeffrey Garten, a professor of trade and international finance at the Yale School of Management and a former top official in the Clinton administration’s Commerce Department. “He is taking each case on the merits as he sees it, but he runs the risk of sowing a level of mistrust about all big companies. And it’s those companies — not small businesses — that he will need to invest and innovate for the kind of recovery he wants.”

My, you know, emphasis. Yes, it makes sense that corporations -- both foreign and domestic -- would decide to either not do business in the States or, better yet, simply not invest for growth here because President Obama can say mean things to themselves when provoked (by a financial meltdown caused by greed and stupidity, hundreds of thousands of jobs lost by incompetence, or a broken pipe under the Gulf caused by cost-cutting and regulatory malfeasance). After all, it's not like we're the largest economy in the world with the safest currency and lowest rates of interest. I'm sure Exxon-Mobile will be the next to go since we sure don't buy enough gasoline and they could be next to receive a presidential tongue-thrashing. I mean, if I were a CEO, I'd say, "Who needs this shit? We're outta here. They're not this abusive in mighty France."



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