Tuesday, July 27, 2010

Wall Street, the White House, and the weak economy: newyorker.com

Came across an interesting article "Blame Games" by James Surowiecki.

Some excerpts from the article -
The U.S. economy is limping along. The job market is in rotten shape, and business investment is hitting historic lows. And, if you’re looking for a culprit for this dismal state of affairs, many businesspeople would be happy to point you to the White House. Companies aren’t hiring or investing, businessmen say, because the combination of Barack Obama’s anti-corporate attitude and a blizzard of new regulations and proposed taxes has created what Ivan Seidenberg, the C.E.O. of Verizon, calls “an increasingly hostile environment for investment and job creation.” In a recent Newsweek column, Fareed Zakaria pointed to the fact that Fortune 500 companies are sitting on a cash hoard of $1.8 trillion, and suggested that a “profound sense of distrust” might be why they weren’t spending it.

The impulse to blame Obama for all this corporate timidity is understandable: aside from the fact that plenty of businesspeople don’t like his policies, it would make things so much easier if a President could jump-start the economy just by making the suits feel better. But the attacks reflect the same blind faith in Obama’s powers that the hero worship of his election campaign did. As the political scientist George Edwards showed in his masterly study “On Deaf Ears,” people vastly overrate the influence of the bully pulpit: in most cases, the capacity of a President to change voters’ opinions is slim, and there’s no reason to think that he has any more influence over corporate executives. A different President isn’t going to get businesses off the mark. Only a different economy will.