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Business Working the Refs Works – White House Policies Tailored to Their Desires

You know the phrase “the squeaky wheel gets the grease,” right? Well, some wheels are squeakier than others. When labor and progressive groups show their displeasure with the White House, they are told that they need to stay in the fold. When business has their fee-fees hurt, the White House leaps into action to reassure them.

The White House has launched a coordinated campaign to push back against the perception taking hold in corporate America and on Wall Street that President Barack Obama is promoting an anti-business agenda […]

In a Thursday interview, White House chief of staff Rahm Emanuel argued that rather than recoiling against Obama, business leaders should be grateful for his support on at least a half-dozen counts: his advocacy of greater international trade and education reform open markets despite union skepticism; his rejection of calls from some quarters to nationalize banks during the financial meltdown; the rescue of the automobile industry; the fact that the overhaul of health care preserved the private delivery system; the fact that billions in the stimulus package benefited business with lucrative new contracts, and that financial regulation reform will take away the uncertainty that existed with a broken, pre-crash regulatory apparatus.

But, in the White House view, some business leaders listen only to Obama speeches being tough on BP or on the excesses of Wall Street and assume Obama is hostile to business across the board. “Rather than respond to atmospherics, they should look at policies where we have been supportive,” Emanuel said.

Thing is, Emanuel’s absolutely right. We have this strange situation where the Masters of the Universe seem fixated on words and not actions, while the progressive community seems fixated on actions and not words. Look no further than Timothy Geithner’s interview with Larry Kudlow (!), where he floated a specific action that would essentially give a big payout to the ultra-rich:

In a CNBC interview late Wednesday, Geithner said the Obama administration still hopes to hold the top tax rate on both capital gains and dividends to 20% next year – the level the White House has been proposing since taking office.

Of course, a 20% rate would represent a big increase over the current 15%. But it’s a lot better than the 39.6% top rate for dividends that congressional Democrats have signaled they were planning next year for higher earners.

“This is good news for people who worry about dividends, because it reinforces the administration’s commitment to 20%,” said Clint Stretch of Deloitte Tax LLP.
The tax changes are happening as the Bush-era tax cuts expire at the end of this year.

The same people carping about the deficit will love the retention of most of the Bush tax cut on capital gains, and so will Big Business, who after all gives out the dividends.

I think the clear victories of the past and future belie the real strategy from corporate America – to hold a gun to the head of the economy and demand largesse from the government before they start hiring and investing. Corporate profits have increased by one-third in the past year, but that isn’t enough. They want the same tax breaks and forced markets – and taxpayer bailouts if everything goes sour – that they enjoyed basically uninterrupted for the last 30 years. And if they whine loud enough, they’re going to get it.

UPDATE: Meanwhile, two years straight of misinformation has convinced half the electorate that Obama’s a socialist. It’s a pretty good game the business-media-conservative complex has been running.

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David Dayen

David Dayen