James Pethokoukis

Politics and policy from inside Washington

Why a top CEO rejects “pro-business” Obama

March 1, 2011

George Buckley, the boss at manufacturing conglomerate 3M, apparently didn’t get the memo about Obama 3.0 (vs. Campaign Obama and New New Deal Obama) being a “pro-business” president.

This new incarnation, the White House tell us, is evidenced by a) the  hiring of lobbyist/rainmaker Bill Daley as Obama’s chief of staff,  b) bringing in GE boss Jeff Immelt to run his new competitiveness council, and c) temporarily abandoning plans to raise income taxes on small business and entrepreneurs.

But Buckley is having none of it, telling the Financial Times that “we know what [Obama’s} instincts are — they are Robin Hood-esque.  He is anti-business. …  Politicians forget that business has choice. We’re not indentured servants and we will do business where it’s good and friendly. If it’s hostile, incrementally, things will slip away. We’ve got a real choice between manufacturing in Canada and Mexico — which tend to be pro-business — or America.”

Buckley has good reason to wonder aloud about Obama’s pre-election year conversion from nemesis to friend of Corporate America. He surely sees Team Obama failing to make obvious moves to boost U.S. global economic competitiveness. The president still supports the new healthcare and financial reform laws. The president still wants to raise taxes. And the president gave the stiff-arm to his own debt panel. So there you have it, the axis of economic evil – taxes, regulation and government spending.

Now America’s best days may lie ahead, as Warren Buffett suggests in his latest letter to Berkshire Hathaway shareholders. But the United States is becoming a less attractive place for multinationals, like 3M, to do business.

In her recent business analysis of “USA Inc.,” technology analyst Mary Meeker of Kleiner Perkins compared America to 20 competitors on a variety of metrics for economic fundamentals, business climate, human capital and infrastructure. Of the 29 attributes, the United States, relative to other countries, improved on none since 2000, stayed the same on nine and deteriorated on 20 including worker quality, taxes, and transportation.

Of course, America isn’t exactly Chad, which is last on the World Bank’s rankings for ease of doing business. Or even China, which can be found way down at number 79. Uncle Sam is an encouraging fifth, though the institution does identify trouble spots such as a creaky and inefficient tax system. Reducing tax complexity and lowering rates, especially for multinationals, would help address that.

The U.S. must also do a better job at attracting and keeping high-skill immigrants. The current visa cap is far too low for tech industry needs. Indeed, a 2010 Federal Reserve study shows such immigrants boosts native worker productivity and income. (Of course, there might be less need if the union-run education system was doing a better job.) America must also continue to reform healthcare to both reduce some $60 trillion in future unfunded liabilities and provide regulatory certainty for business big and small.

All that, not better messaging, is what’s needed to make America the world’s premier location to start and run a business.

Comments

Canada has single payer health insurance — a huge benefit to employers — and higher taxes, something that these people are adamantly against. And Mexico pays people slave wages with no benefits, both of which these people obviously prefer. So, Buckley’s statement would be incoherent, unless you just accept it for the obvious blackmail threat it is. Believe it, America’s business leaders are not lobbying for the US to be more like Canada. They are lobbying for it to be more like Mexico. And these selfish, unpatriotic crybabies wonder why everyone hates them.

Posted by GetpIaning | Report as abusive
 

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Posted by schmetterling | Report as abusive
 

Can you please get off the tripe that unions are responsible for the state of public education? Unions were there when the education system was GREAT, they were there when it was mediocre, and they are still there. Education rests on the three tiers of money, teachers, and parental involvement. If those three are not working together, education fails. PLENTY of non-union schools absolutely suck…but we don’t hear about them. Go find some details on the sucky charter schools before blaming unions for everything teachers are doing here.
Eesh.

==RED

Posted by REDruin | Report as abusive
 

The teacher’s unions did not have collective bargaining power until 1959 in Wisconsin. That tracks pretty well with the beginning of the decline in quality in US public education. Contrary to what the teacher’s unions would have us believe, there is no correlation between high spending on education and student performance. You are right, however, on the other two legs – parental involvement and quality teachers. Unfortunately, the unions insure that the longest-tenured, not the most qualified teachers are retained in our public schools. There may be PLENTY of non-union schools that suck, but the teacher’s unions are terrified at the thought of giving parents a choice in the matter.
The quest to try to get parents more involved in education has unfortunately been sublimated by more politically correct priorities.
One factor you left out is school administration. Here again, political correctness has trumped our children’s education, much to the detriment of us all, and this fact in agreement with Mr Pethokoukis’ thesis.

Posted by wright | Report as abusive
 

It’s bizarre how people who know nothing about the high tech industry are convinced that it has a desperate shortage of skilled workers. Perhaps Mr Pethokoukis should try getting a job in the IT field himself. The reality is that we import H1b visa workers solely to drive down wages.

Posted by SteveMangan | Report as abusive
 

Because he’s a greedy SOB who wants slave labour and no responsibility? Just sayin….

Posted by coriolana | Report as abusive
 

@Posted by GetpIaning

I looked up Canada’s corporate tax rate. It’s actually lower than the U.S. CORPORATE tax rate. So if a company wants to save money (perhaps in anticipation of future spending for research, expansion etc.) it might be better off in Canada than in the U.S.

Also, Canada is sitting on a lot of oil, and they aren’t afraid to go after it! Would be interesting to see what energy costs are there.

Posted by Ultramarine | Report as abusive
 

Getplaning: Canada’s current corporate tax rate is 16.5% and effective 1/1/12, it will be 15%. And while wages in Mexico are comparatively low, Mexican labor law provides for many employer-paid benefits including a weekly paid “day of rest” (Sunday). There is mandated profit sharing, vacation pay (including a 25% “vacation bonus”) and 12 weeks paid maternity leave (employer pays 40%). Employers must pay a year end bonus and contribute to the national employee housing fund (5%), social security (minimum 17.42%) and employee retirement funds (2%). Employers are expected to provide optional fringe benefits (food, transportation and day care “bonuses”) approximating 20%. Terminating an employee without “cause” (labor law lists 15 causes) requires three month’s severance pay. Employees with 15 or more years seniority who leave voluntarily are entitled to a minimum compensation of 12 days pay per year of service.

Not everybody hates America’s business leaders nor considers them “selfish, unpatriotic crybabies.” Mostly it just those of you who think the purpose of business is not to generate a return for its investors, but rather to provide for what you consider the common good.

Posted by SukieTawdry | Report as abusive
 

Ultramarine : You’re right about Canada’s corporate tax rate being lower than America’s – see SukieTawdry’s excellent post above – and yes, we are sitting on a lot of oil, ‘dirty oil’ your president has called it in one of his frequent fits of ignorance, located mostly in the province of Alberta. Twenty-five years ago the Canadian federal government let market forces determine the future course of the Canadian oil patch, and the results are plain to see.

We don’t get any discount though; Canadians pay world market prices for energy. Subsidizing energy consumption would be counterproductive and, in fact, was phased out long ago.

Posted by Elektrobahn | Report as abusive
 

SukieTawdry — It has been a common talking point on the right that Canada’s federal tax rate is 15%. But those who want you to believe this are neglecting to add the Provinicial tax rates, which raise Canada’s total corporate tax rate to 34%, which is roughly equal to that of the United States.
The taxes include the cost of Canada’s national health plan, which costs American business billions more.
As to the other “burdens” of paid vacation, maternity leave, social security, pensions, day care, etc, Canadian business all pay more and offer more than American businesses do.
And while wer’re at it, HOW DARE those little worker bees take a paid vacation, ask for a little time off to have a baby, or expect to retire in any sort of comfort! Back to work, you freeloaders!

Posted by GetpIaning | Report as abusive
 

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