is obama good for business? February 13, 2008Posted by KG in 2008 Elections, berkeley, econ, news, politics.
Tags: austan goolsbee, barack obama, business, business week, federal reserve, g-7, george soros, ipod government, obama, paul volcker, robert wolf, ubs, warren buffett
photo by flickr user Daniella Zalcman used under a creative commons license
On Sunday, Feb. 10, after he found out he’d won that day’s Democratic Presidential caucuses in Maine, but before his appearance on CBS’s 60 Minutes, Senator Barack Obama (D-Ill.) sat down at the keyboard of his computer to write an e-mail. Not to a media consultant or a delegate counter, but to banker Robert Wolf, CEO of UBS Americas (UBS). The two men exchanged notes about the Senate-passed economic stimulus package and that weekend’s G-7 economic summit, Wolf says.
A banker as Obama’s pen pal? Hard to believe, given the senator’s liberal image. But in between rallies and airplane flights on the campaign trail, Obama has also taken time to consult on the economy with billionaire Warren Buffett, whose support of rolling back the Bush tax cuts Obama often cites in his stump speeches. Obama has also been in touch with former Federal Reserve Chairman Paul Volcker, who endorsed the freshman senator in January. “When I sat down with him, I found him to be unbelievably refreshing and smart and thoughtful,” says Wolf, who first met Obama at the offices of financier George Soros. The UBS chief has gone on to raise more than $1 million for the Obama campaign.
But Obama has also taken several steps that aren’t typical of his fellow liberal senators. He has stocked his Capitol Hill staff with employees whose résumés include McKinsey, the old Andersen Consulting, and other nonpartisan business advisory firms. He joined forces with conservatives on bills designed to improve ethics and transparency in Washington. He voted for a bill in 2005 that made life harder for trial lawyers—a traditional Democratic constituency—by allowing defendants to shift cases more easily to federal court, which can be less favorable to plaintiffs. And he pushed an outside-the-box proposal that would help Detroit automakers pay legacy health-care costs on the condition they reinvest the subsequent savings into hybrids and other fuel-efficient cars. “His whole style of governing is less confrontational,” says Bob Shrum, a long-time Democratic Presidential campaign strategist who’s unaligned in 2008.
Some of the names that might fill in the org chart in an Obama Administration are also telling. Obama—whose own father was a Kenyan economist with a PhD from Harvard University—has cultivated a group of economic advisers. They’re generally careful technocrats, and are led by University of Chicago professor Austan Goolsbee. Among the others: Jeffrey Liebman and David Cutler of Harvard and Christina and David Romer of the University of California, Berkeley. Goolsbee has shown a preference for making economic initiatives easier to understand and use, an effort Obama calls “iPod government.”
On the campaign trail, Obama and Goolsbee have crafted proposals to streamline government programs like the Medicare Part D prescription drug benefit, which Goolsbee feels is too complicated. Same with student loan applications and tax forms. Goolsbee says the distinction with Clinton is most evident in the candidates’ plans to increase the personal savings rate. Obama would create an automatic 3% savings withholding from every paycheck that employees could opt out of if they want to. Clinton, on the other hand, proposes a targeted tax break to incentivize savings. The Clinton plan, says Goolsbee, “is what the playbook says to do. But the research says tax credits won’t induce very many people to actually open savings accounts.”