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10.13.10

Obama Secretly Courts Big Business

As Wall Street and corporate America turn on the president, Charlie Gasparino reports that top advisers have been assuring CEOs that President Obama isn’t as anti-business as they believe.

As Wall Street and corporate America turn on the president, Charlie Gasparino, author of Bought and Paid For reports that top advisers have been assuring CEOs that President Obama isn't as anti-business as they believe.

Former White House Chief of Staff Rahm Emanuel isn't known for mincing words, and in a conversation with a CEO of a large company last month, he lived up to his reputation. "How come," he demanded to know, according to a person with direct knowledge of the conversation, "you guys aren't hiring more?"

The CEO's answer, the person says, went something like this: "I know you're paid to do the president's bidding, but I'm paid to answer to shareholders and a board of directors and your health-care plan is costing me $1.5 billion, your tax increases another $1 billion, and regulation another half a billion. So I might have to lay off people rather than hire them."

Emanuel's response was, according to this person, somewhat incoherent: All the conditions are there for corporations like his (in the Fortune 20) to put people back to work again. The stimulus package stopped the economy from falling into the abyss (despite persistently high unemployment), the economy is on the mend (despite slowing GDP growth), and President Obama isn't really anti-business (despite all his business-bashing on the campaign trail).

Incoherent might also describe the economic policies of the Obama administration. An administration official bragged to me that the president could have publicly supported the foreclosure moratorium, and unleashed Attorney General Eric Holder to join state attorney generals, investigating the alleged fraud in the foreclosure process—but Obama didn't after hearing from banks that the vast majority of people being foreclosed upon aren't the victims of fraud and have defaulted on their mortgages.

"Doesn't that count for something?" he asks me. Yes. But the president and his troops have also been running around ahead of the midterms, playing the populist card by attacking the rich (a.k.a. people who earn more than $250,000 a year), Wall Street bankers, the U.S. Chamber of Commerce and just about anyone who goes to work in a suit. Meanwhile, privately, people like Emanuel, who announced he's abandoning ship to run for mayor of Chicago, and Valerie Jarrett, who continues to dispense lame economic advice, hold private meetings assuring CEOs and business leaders that the president isn't as anti-business as his detractors suggest. He really believes, according to one person with direct knowledge of these bull sessions, "that business isn't the problem, but part of the solution."

Someone should tell the president his little good cop, bad cop routine isn't working. I'll be the first to hammer greedy bankers on Wall Street when they deserve it, and point out the absurdity of corporate welfare, but class warfare only gets you so far with voters most of whom apparently understand that without rich people (even fat-cat bankers) creating jobs and spending money, everyone would be poor. They also understand, apparently better than the president, Valerie Jarrett and Rahm Emanuel, that businessmen act rationally; when government raises their costs as this government is doing through higher taxes and increased health-care mandates, they look for places to save money, and that means fewer jobs.

"Forget about Big Business moving away from us," said one administration official, "we're losing the Kiwanis Club guys who own a small business."

Richard Wolffe: Obama in Enemy TerritoryAnd that's why the president's poll numbers are sagging, bringing down with him the entire Democratic Party, which promised us so much "hope and change" just a couple of years ago; what he's saying about the economy doesn't make any sense and hasn't for a long time. The American people know it even if his defenders in the media continue to ignore the failure of Obamanomics.

He promised us 8 percent unemployment if he could spend $800 billion in "stimulus" and we got unemployment closer to 10 percent and then he assures us it would have been worse. He hammers corporate America and Wall Street for profiting when the rest of America suffers, but his administrations handed Goldman Sachs et al., all that corporate welfare to start with.

President Obama, of course, didn't create the economic conditions that led to the Great Recession, which still lingers as measured by common sense, but the reason why he's losing the hearts and minds of the American people is because it's patently obvious that the incoherence of his policies has made a bad situation so much worse.

After all, why push for a health-care overhaul when the country has nearly 10 percent unemployment, when putting people back to work is the fastest way to get their medical care covered? I can't get inside the president's brain cells, but one answer could be that he simply doesn't care. In the world of Barack Obama, unemployment seems like such a small price to pay for his planned progressive utopia.

The president and his closest political advisers might not care that the economy is suffering as he remakes the country in his progressive image, but there are signs that inside the administration some people are waking up to the absurdity of Obamanomics.

"Forget about Big Business moving away from us," said one administration official, "we're losing the Kiwanis Club guys who own a small business and spend their nights wearing those funny hats. They're independents and we need them but all the class warfare stuff seems to have pushed them away."

 So, I asked, how about sharing that sentiment with the president or his political advisers?

"If I did they probably wouldn't listen."

Charlie Gasparino is a senior correspondent for Fox Business Network. He is a columnist for The Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His new book about the financial crisis, The Sellout, was published by HarperBusiness.