Calling The Captains of Industry

Over the last few days there have been plenty of commentary by financial analysts on NPR that claim the slump in the market and the talk about a double dip recession is the result of a pessimism by corporations that Congress will do anything about the economy in the short-term. For all the talk about the European debt crisis, Wall Street still seems shocked over the whole congressional debt ceiling debate and the downgrading of American treasuries by Standard and Poor's.

When the Republicans were opining that it would be a good thing that an economy, which is 25% of the global GDP, should default, Republican corporate donors were quietly and lately more opening urging rationality. While the debt ceiling may have cooled that ardor of the GOP to shut-down the government, there is no evidence that the Republicans want to do anything to help the economy because it would indirectly benefit President Obama's re-election efforts. This was the message President Obama took on the road,saying some put political victory over opponents over the interests of the country.

Warren Buffett came right out and said that the United States has to stop "coddling millionaire and billionaires" and raise taxes on the wealthy. But Charles Koch has responded that this shared sacrifice language is nonsense and that most things the government does are harmful and that his philanthropic efforts do more social good. But the divide is not so clear cut among those whose business depends on consumers.

The consumer index had been steady over the last year and a half signalling that the economy had stabilized. But now the index has fallen below its worst during the deepest days of the Recession. Most analysts attribute this to the state of our politics. And now, for the first time in many a year, economists are openly discussing the role of psychology in an economic recovery. They argue that Washington must be instrumental in breaking the negative feedback that is reinforcing the trends in all the economic indicators.

The New York Times published an editorial today urging more near term spending to simulate the economy and a balanced approach to deficit control by mixing cuts with revenues. Steve Benen at the Washington Monthly points out that this line is now the consensus opinion of economists, sane politicians and the businss community. He wants to know why the nation's business leaders never came out openly and supported the grand bargain being negotiated by President Obama and John Boehner. If they had lobbied their Republican minions on this, would the state of play in our economy be different?

The U.S. Chamber of Commerce, which has dedicated itself to defeating President Obama and all Democrats, openly backed the President's stimulus package,which now the business community admits was too small. Now is the time for the Chamber, the Business Roundtable and American corporations to get behind President Obama's plan to create an infrastructure bank. If you actually listen to President Obama , such a thing has already been started. The problem is that it is funded at a small level and probably will not get working for awhile. But more infrastructure spending in the short-term is called for and the Chamber and Business Roundtable should be lobbying Congress now.

President Obama promised a new set of proposals to get the economy going after Labor Day. But he caught the Republicans flat-footed by e-mailing out a few days ago his list of proposals. These included his plans to hire 1 million veterans,extend the payroll tax cut, and spend more money on the infrastructure. Prior to his Midwest road trip, Joe Biden had commented here in D.C. that the debt ceiling deal left sufficient money in the budget to do all these things. The comment went underreported at the time.

One can't help but think that some of new rhetoric from Jon Huntsman isn't a result of American corporate leaders being very concerned that the Republicans virtually have no one proposing anything to get the economy going. It's all well and good to talk about eliminating the EPA and corporate tax rates but sober minds in the corporate community know that these things are not serious impediments to investment.

House Republicans are being pummelled in townhall meetings during their recess by citizens demanding jobs and more taxes on the wealthy. Paul Ryan is so frightened by his constituency that he's taken to beefing up his security and demanding entrance fees for his meetings. Southern Republicans are handing out lists of constituents that they know are antagonistic to their views so they can be excluded from townhall meetings. But so far the initial feedback from the GOP is to oppose the extension of the payroll tax cut, while they still maintain the view thyat the Bush tax cuts for the wealthy remain.

It is going to be a strange Fall. Can the GOP really stop all measures to help the economy? Can the Captains of Industry allow them to?

Strange fact of the day: Apple is worth more than all the banks in the Eurozone combined.