For such an anti-business president, Obama’s got a pretty pro-business record
Louisiana Governor Bobby Jindal is considered among the most wonkish of the Republican Party’s class of rising stars. Most politicians get involved in policy after getting involved in politics, which is why they know so little about it. Jindal took the opposite path. As a Rhodes Scholar, he focused on health policy at Oxford and then served as assistant secretary of Health and Human Services for planning and evaluation in George W. Bush’s administration. Then he ran for office. He is, in other words, the rare politician who can work a spreadsheet.
Which is why it’s so disappointing when he says things like this: “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.”
You can explain it away with all the normal excuse-making and curve grading. Jindal was speaking to an audience of rabid partisans at the Chicago Conservative Political Action Conference. He’s trying to show the Romney campaign he can play the role of attack dog, a crucial qualification for any vice president. It’s just a throwaway applause line.
But that’s why it’s such a shameful display: He knows better. Or, at the least, he should know better.
Consider what it would mean for Jindal to actually believe what he’s saying here. It would mean he believes there are real, living, breathing human beings in the Obama administration who unhappily endure the existence of Apple because it leads to tax revenues, or who walk into their local hardware store and can only stomach the experience of buying a hammer because they know, deep down, that some percentage of that purchase is headed into Medicare’s coffers. These days, no one in China even thinks like that. To find anyone who actually thinks like that, you need a Hot Tub Time Machine set for the Soviet Union in 1973.
What Jindal likely believes, rather, is that this kind of over-the-top comment speaks to something genuine in the conservative id. But it does so by ignoring the reality of the Obama administration’s policies.
Let’s start with the idea that the Obama administration sees businesses as piggybanks. Since 1950, corporate tax receipts have averaged 2.7 percent of GDP. In the Obama years, they’ve averaged 1.16 percent of GDP.
Some of that, of course, is a consequence of the recession. But some of it is a consequence of policies the Obama administration has proposed and passed. The original stimulus included billions in tax cuts for businesses, including allowing businesses to write off 50 percent of the cost of any depreciable capital purchases — think tractors and wind turbines — they made in 2009. In 2010, the Obama administration upped that to 100 percent. In 2011, they proposed the American Jobs Act, which sought to halve payroll taxes on the first $5 million of a companies payroll and a complete elimination of payroll taxes on new workers or increased wages for existing workers. Republicans blocked it from going through.
Going forward, the Obama administration’s budget envisions corporate tax receipts rebounding to about 2.4 percent of GDP — again, beneath their historical average.
And it’s not just tax cuts. 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. Later, they passed a health-care bill that not only abandoned the traditional liberal dream of single payer, but jettisoned even a public option. During financial reform, when the left was calling on them to break up the biggest banks or at least pass a new Glass-Steagall law, they went with a more incremental approach.
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’s not, by any means, the singular result of the Obama administration’s policies. But it’s happening amidst their policies. And it speaks to the underlying reality of this recovery: Corporate taxes are near all-time lows and corporate profits are near all-time highs. That’s a mighty odd outcome for an administration that supposedly sees the existence of private businesses as an unpleasant side effect of the government’s need for tax revenues, don’t you think?
That’s not to say businesses like everything the Obama administration has done, or wants to do. And they really don’t like everything the Obama administration has said. The president has matched a pro-business record with occasionally populist rhetoric, and that’s angered rich CEOs and financiers who want their wealth to be seen as evidence of their worth as people and contributors to societal progress.
But that’s the real debate we’re having. Both parties agree that most everything should be done by the private market. The Obama administration want slightly higher taxes on the rich and universal health care provided mainly through private insurance and Republicans want somewhat lower taxes and a more spartan safety net. Jindal knows all this, or at least he should. And, as one of relatively few politicians who is a bona fide policy wonk, he should be explaining the policy debate to his base, not caricaturing it.