Obama Needs a Capitalist

Tremendous speculation surrounds the president's pick for top economic adviser.

What will be President Obama’s crucial decision for the new year? It should be his choice for a top economic adviser; ideally someone who understands the world of business. With good economic news still merely a ripple in a sea of troubles, the selected adviser will have to deal with the 9.8 percent tidal wave of unemployment and the $14 trillion debt tsunami. And throw in global trade, as well.

Obama's pick to replace outgoing director of the National Economic Council, Lawrence Summers, will signal the direction of his economic agenda at least until the 2012 election. Public polling has shown rising concerns about both short and long-term economic problems.

Choosing former Clinton administration figures to fill important offices has become almost automatic for Obama. That places Roger Altman, former Deputy Secretary of the Treasury under Clinton, near the top of the speculators’ list. Also, Altman is a deficit hawk and an investment banker. Whoops, maybe his Wall Street connection makes Altman off-limits to an administration that has kicked Wall Street in the pants at every chance possible, while happily accepting campaign cash in the past.

Another well-known former Clinton man is Gene Sperling, National Economic Adviser to Clinton and now special counsel to Treasury Secretary Timothy Geithner. He is also on the staff of the Council on Foreign Relations, where he serves as Senior Fellow for Economic Policy.

Austan Goolsbee, chairman of the president’s Council of Economic Advisers, is articulate in his TV appearances and has the administration spin down pat. But because he’s now an insider, he would not fit the notion of bringing in a fresh face from outside of Washington. Also, Goolsbee was chosen to replace Christina Romer, who left to return to teaching at the University of California at Berkeley.

Obama could turn to academia, calling out a scholar such as Yale President Richard Levin. But since his recent meetings with business executives have been at least civil, compared with his past bashing of industry leaders, Obama might—just might--find a prominent economist from the business world. The president met for four hours on Dec. 16 with 20 key business executives at the Blair House across from the White House. White House officials, according to a New York Times story “were projecting an image of a president seeking to work hand in hand with corporate America,” (rather than hand in pocket). Attendees included Kenneth Chenault, chief executive of Federal Express, Eric Schmidt, CEO of Google, and Indra Nooyi, CEO of PepsiCo.

A top business executive, however, may be a better fill for the position of chief of staff, now that Rahm Emanuel has left to run to be Chicago’s mayor and David Axelrod will be running Obama’s campaign headquarters, also in Chicago. That is, if a high-ranking business executive would even consider such a post.

Tapping a true capitalist would not only be startling in an Obama administration, but Obama’s unforced errors have almost completely alienated him from American business. Since taking office, he has shown no hint of appreciation for the wonders of the free market and private enterprise. It was because Obama has seemed infatuated with what he considers the “best and brightest Ivy League types” that he chose Lawrence Summers, former president of Harvard.

Obama might have avoided much of the business backlash if he had brought in a few business people into his entourage or if he had brought a prominent business person into his cabinet, pondered The Economist. What is surprising, the column said, is that “some of the President’s biggest supporters’ have so publicly derided his policies, even at the risk of hurting their ability to influence the party in the future.”

Obama may now be seeking reconciliation with the corporate community after business leaders sank millions into the midterm election to defeat Democrats. But two years of frustration are more than enough for many executives who say “they won’t be won over by another round of private lunches and photo opportunities at the White House,” said a Politico story. If the President has any hope of a truce with industry in time for his reelection campaign, he needs to drop the name-calling and step forward with some specific positive proposals.

“No amount of relationship-building is a substitute for policy,” said Johanna Schneider, executive director for external affairs at the Business Roundtable, which once was an enduring corporate ally. She added: “We have to see some concrete policies that will help grow business because everyone’s goal is to grow jobs. This isn’t hocus-pocus. There are concrete steps to take for job growth.”

The administration is considering an appearance by Obama at the U.S. Chamber of Commerce, which spent about $75 million to help Republicans in the November election. Many from business and industry believe that Obama just doesn’t get them. No one in the White House has had corporate experience or been “steeped in the daily challenges of operating in a global economy,” as Politico put it.

Cooperation with the business community is essential for expanding the economy and providing jobs. That’s why finding a top economic adviser who understands this is so critical.