I suspect that many in the Obama administration really don’t believe in private enterprise. At best, they see business as something to be endured so that it can provide tax money for government programs.
That's Louisiana Governor and potential Romney runningmate Bobby Jindal speaking to a conservative crowd this week, according to National Journal. I find it an interesting statement that's at least hyperbole and, in an important way, off-target. Ezra Klein at the Washington Post finds it to be "shameful" hogwash.
Here's my take:
Obama doesn't govern in an anti-business way, but in an anti-free enterprise way. He's perfectly happy allowing, and even helping corporations earn profits, but he wants government steering the ship. Jindal's first sentence above would have been much closer to the truth had he said the Obama administration really doesn't believe in free enterprise.
Klein's shooting back at Jindal's remarks is fine, but Klein's post, I think, muddles some things and elides some key distinctions.
Klein seems to argue that corporate income tax receipts dropping as a share of GDP is a sign that Obama believes in private enterprise. But Obama hasn't cut corporate income tax rates. And while Obama talks about lower rates, he hasn't pushed them. In 2008, in fact, Obama attacked McCain dishonestly for proposing lower corporate tax rates.
Klein points out that "the original stimulus included billions in tax cuts for businesses," and names the provision allowing corporations to write off large capital expenses in the year in they spend the money. But I would add that many of the corporate tax cuts were exactly the sort of picking-winners-and-losers federal attempts to steer the economy that make people think Obama doesn't really believe in the private sector, except as directed by the government.
Klein, I suspect, isn't disagreeing with my points, as some of his examples confirm this aspect of Obama's policies:
The Obama administration’s first act — this was before it was even an official administration, as it came in the transition period after Obama won the election but before he had officially taken office — was lobbying congressional Democrats to release the second tranche of TARP funds in order to save the financial industry.
I would have added the auto bailout, cash-for-clunkers, and reauthorization of the Export-Import Bank as examples that Obama wants private companies to make money.
Klein makes another important point when he mentions how U.S. corporations are doing:
If there’s been serious distress from these policies, it’s been hard to detect in corporate bottom lines. After taxes, corporate profits amounted to 6.9 percent of GDP in 2010 — their highest level since 1966.
That certainly doesn't look like the work of an anti-coporate President. But here's some data to go along with that nugget: the last two years have been the two worst years for new business startups since at least 1994, according to data compiled by Martin Neil Baily at the Brookings Institute.
Corporate profits up. Corporate cash holdings up. New businesses starts down. Those are all signs of a stultified and less competitive marketplace. They also help demonstrate how Obama's brand of being "pro-business" -- including regulations, bailouts, subsidies, and more tax-code complexity -- is good for businesses without being good for the economy.