For months now, the Obama administration has had to battle back against the entirely undeserved charge that it is “anti-business,” which has been repeated over and over by America’s corporate CEOs. “President Obama is the most anti-business President of my life,” charged Cypress Semiconductor CEO T.J. Rodgers. “They’ve been particularly anti-business,” added Loew’s CEO James Tisch. “They not only go after hotel companies, but they go after bank executives; they want to cap compensation.”
Blackstone Group CEO Steven Schwarzman even likened the administration’s attempt to make hedge fund managers pay their fair share in taxes to “when Hitler invaded Poland in 1939.” But these charges stand in stark contrast to the fact that corporate profits are booming.
In fact, profits are so high that corporations are sitting on almost $2 trillion in cash:
$1.93 trillion. That’s the stunning amount of cash corporate America held at the end of September, according to data released by the Fed. This figure is critical to understanding why corporate profits are so high (cutbacks; no new spending) while the economy and hiring are so lousy and CEOs keep complaining.
Last quarter, businesses earned $1.6 trillion, according to the Commerce Department. But do these numbers have CEOs clamoring for more Obamanomics? No, they don’t.
However, CEOs are starting to shift their views on Obama due to something else — his willingness to concede to Republican demands to cut their taxes:
Corporate chief executives who have been disappointed in the Obama administration are suddenly singing a different tune. Ivan Seidenberg, the Verizon CEO who just months ago criticized President Obama’s policies as a threat to business, on Wednesday said Obama “has shown a willingness to learn.” “The things that occurred in the past of couple days are extraordinary,” Seidenberg, chairman of the Business Roundtable, told a Washington news conference on Wednesday.
The average CEO of an S&P 500 company was paid $9.25 million in 2009. If the Bush tax cuts are extended, a lowly millionaire will receive a tax cut next year of $139,000 dollars — more than twice the country’s median income. And agreeing to that, evidently, is what will make Obama into a real advocate for the business community.