Once Cozy With the Feds, Corporate America Is Now Supine
From the lead editorial in the current issue of The Economist, "Obama v BP":
Mr. Obama said he was looking for arses to kick. After the macho rhetoric came the demands for cash. Mr. Obama decided to "inform" BP that it must put adequate funds to meet all compensation claims into an escrow account beyond its control, although he has no authority to do so....Corporate America, normally quick to resist government intrusion, has kept strangely silent....
Corporate America, "normally quick" to push back against government? Now "strangely silent?" This is silly.
Corporate America long ago--and I mean decades ago--figured out how to cozy up to the federal government, using the various regulatory agencies to its own advantage. In his 1988 book, The Power Game, Hedrick Smith dissected the interlocking relationship between regulatory agencies, the congressional committees that oversee them, and the industries they regulate. Later that same year, President Reagan addressed the same phenomenon. "Administrations come and go," he said just a few weeks before leaving office, "but the members of the iron triangle endure....[T]he iron triangle's power...comes from its ability to focus debate and overwhelming resources...on issues that don't command broad and intense national attention." Which is why virtually every corporation in America spends gobs on Washington lobbyists year in and year out.
The Obama administration was looking for arses to kick for a long time before the oil leak. It kicked the arses of bankers. Then it kicked the arses of automakers, particularly of GM. Then it kicked the arses of bankers again. The response of corporate America? Complete and utter supineness. Really, I've Googled all over, searching for a major banker or an auto executive who stood up to the Obama administration in public. I've been unable to find a single one. Not one. After decades of cozy relations with the federal government, corporate America is simply suffering the chief executive in silence, calculating that his tantrums will pass--but that the willingness of the federal government to enforce the corporate status quo, helping behemoths ward off upstarts and challengers, is a thing of underlying permanence.
As I say, Hedrick Smith and Ronald Reagan had this figured out more than two decades ago. You'd have thought The Economist would have twigged to it by now.
- Comment (5)
- · Quote
- · UnfollowFollow (1)
Comments :
May '10
Re: Once Cozy With the Feds, Corporate America Is Now Supine
The Economist (God love em) haven't twigged to much in years. For thems as is interested in twigging, the WSJ will provide. The Economist have got a comfortably statist Eurovision. They probably even like the World Cup (I kid, I kid..)
Companies are strangely silent because they've been threatened with state-sponsored bankruptcy. The smack of firm government, as Francis Urquhart would say. The results of this have been seen in the "unexpected" unemployment numbers. What with the rule of law collapsing around our ears, companies are maybe holding back on big investments..
May '10
Re: Once Cozy With the Feds, Corporate America Is Now Supine
"The Obama administration was looking for arses to kick for a long time before the oil leak. It kicked the arses of bankers. Then it kicked the arses of automakers, particularly of GM. Then it kicked the arses of bankers again."
I don't think that's quite right. The administration said it was kicking banker arse and automaker arse, but the only sore bootprints appeared on the arses of taxpayers and stockholders. President Obama dare not kick a banker, automaker (or union leader since the two are nearly synonymous now) in the arse lest he accidentally strike a wallet full of cash for his re-election campaign.
May '10
Re: Once Cozy With the Feds, Corporate America Is Now Supine
Hi, I agree totally. It's Cronisim. That's why it's a huge myth to say that Big Business and the Repubs are in cahoots with each other. It's just the opposite it's Dems and BB. Just look @ Google, W. Buffet and B. Gates for starters. I am bogarting this comment area because I can't figure out how to start a new conversation. I am a six month unpaid member because I F Booked you before the drop dead date, is that why I am unable to start a new conversation. Also please offer a yearly subscriber price and not just a monthly. I don't want to have to pay monthly, would prefer to pay for the year at once. I am asking that you consider asking Larry Elder to be a contibutor and come on your Pod Cast. The guy is awesome. Read his stuff on Town Hall and ask Dennis Prager about his broadcasting skills.
Thanks!
Peter
May '10
Re: Once Cozy With the Feds, Corporate America Is Now Supine
The big corporations are still reeling because their friends in Big Government won't stay bought anymore. They have no Plan B, other than to cower and hope it won't be their turn too soon.
May '10
Re: Once Cozy With the Feds, Corporate America Is Now Supine
Peter -- This issue is near to my heart at present because my job is to follow as an equity research analysts the for-profit education sector which is currently under siege from the Obama administration regulatory machine and increasingly from Tom Harkin.
All I can tell you is that the politicians hold are the cards in the public fora. There is nearly no way to win in a public setting whether it be a hearing room or the press -- particularly once you are on the defensive. And it feels like an avalanche that makes you simply want to duck and cover.
The only avenue that appears sensible is one that involves personal conversation with key decision-makers in quiet, non politically-charged venues -- hence lobbyists.
There is also the perennial risk of making your life even more difficult, thus the constant appeasement of incumbents -- no matter how hostile -- and the reluctance to ever back a challenger. The only time you see anything different is when a company is very closely-held -- as with an owner/founder, where the emotional response overpowers the analytical response.