Thursday, November 15, 2012

Corporate cronyism watch: Obama talks only to multinationals

Yesterday President Obama hosted a group of CEOs of huge multinationals at the White House to talk about the debt negotiations, as he does when he is under pressure to do something about the economy (remember the "jobs summit" a couple of years ago?). The group included the CEOs of General Electric, Honeywell, Ford, Xerox, IBM, Dow Chemical, Wal-Mart, Chevron, American Express and Pepsico.

A few short observations are in order.

First, the CEOs of multinationals are rarely interested in creating American jobs. American prosperity is not their responsibility. Multinational CEOs are responsible for global operations, and their duties under law and morality require them to take a global perspective. No president of the United States should much take in to account the opinions of Fortune 100 CEOs -- at least as a class -- if his purpose is actually to learn what is best for the United States. Sadly, Barack Obama seems to bring in professional globalists whenever he purports to gather advice about American policy. This is a poor choice on its face, because their responsibilities do not align with the interests of his constituents.

Second, Fortune 100 companies are almost always job-shrinkers, not job-creators. I suspect that none of the companies on the White House guest list increased their employment of Americans in the last five years.

Third, the list was notably missing representatives from sectors of the American economy that actually have created jobs. There is no hotshot tech company on the list (with IBM carrying that banner), no representative from medical technology or pharma (both of which are huge exporters), and indeed no company from the healthcare sector at all, which accounts for fully 17% of GDP and which will be the source of a huge proportion of our job growth in the next decade. Nor were there any retailers other than Wal-Mart, which has done more to pressure wages of its employees and shift manufacturing to China than perhaps any other American corporation (note that I am not a critic of this practice, but Barack Obama is).

The question is whether Barack Obama understands any of this. If so, then we (and his guests) ought to know that these proud CEOs were nothing but props in the political theater. If not, then we have a great deal to worry about.

If the president genuinely wants useful advice, he should bring in the CEOs of smaller and growing companies that have actually managed to increase both American employment and their own profits since 2008. Those are people worth listening to, because if the government helped them rather than hindered them the benefits would accrue to economy of the United States.

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