Can Obama Regain the Backing of Big Business?

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Charles Dharapak / AP

President Barack Obama delivers a speech in Washington, D.C., on June 11, 2010

Is President Obama's relationship with the American business community effectively over?

Like Bill Clinton in 1992, candidate Obama had stronger-than-usual support as a Democrat from both Wall Street and Main Street business leaders. Now, amid both the endgame of the struggle for financial regulation and the Gulf oil crisis, the President's alienation from the top level of the private sector leaves him weakened with Congress and the public, and as a political force.

Governing during a period of serial global and national challenges of almost unprecedented scale — to which he has largely responded with government action of unprecedented scale — Obama was bound to make enemies in some camps from which he drew support in 2008. Labor unions, journalists, independents, antiwar activists and liberals are just some of the groups that have more or less turned on the man in whom they once invested so many hopes. But it is the apparent break with Big Business that is at once most pronounced and, at the moment, potentially most consequential.

The view of many of the nation's best-compensated executives is that Obama knows little or nothing about the importance of the free market or how it works. Top White House policymakers and communications experts are well aware of the breadth and depth of the intense anti-Obama passion among the business community, and it annoys them to no end, with some justification.

After all, to overgeneralize, two years ago, a fed-up business world turned away from the policies and perceived flaws of George W. Bush and John McCain and instead bet on a young, untested Democrat. Obama has spent an enormous amount of political capital to address the conditions that earned him such valuable allies.

Business demanded federal action to stave off a worldwide financial depression; Obama as a candidate in 2008 worked closely with the Bush Administration and the Fed to get a Democratic Congress to pass a bailout. Business demanded action be taken to stimulate job creation and save the U.S. auto industry; Obama acted almost immediately after taking office on those challenges. They demanded tax credits for job creation, especially for small business; Obama worked to pass a series of such measures. They demanded a new health care system that would end the crushing financial burden of medical-insurance costs; Obama defied history by passing landmark legislation that rationalized many aspects of the health care structure. They demanded an improved education system to provide smarter, better-equipped workers for the future; Obama took on the education establishment and created a reform competition between the states that many conservatives applauded.

Granted, Obama has executed many of these changes and programs in ways that have offended the ideological moorings of the business community. From its point of view, there has been too much government bureaucracy, too much fidelity to union goals, too much spending — and too little reliance on free markets, too little respect for creditors and too little input from individuals with business experience from within the Administration.

The President's current priorities are all liable to make a now bad relationship that much worse. The financial regulation bill is viewed as a typically ignorant Washington overreach. The ongoing efforts to deal with the BP spill are seen as proof that Obama is an incompetent manager and serial scapegoater of large corporate interests. And the attempt to use the Gulf crisis to revive the stalled effort to get Congress to pass major energy legislation appears to many business types as a backdoor gambit to raise taxes on corporations, mom-and-pop enterprises and consumers.

Some senior Obama officials, particularly those who are veterans of the Clinton Administration, would like to find ways to produce détente with business leaders, recalling how the fight for NAFTA and other '90s centrist achievements were able to win bipartisan support in and out of government by highlighting common interests. But others around the President are responding to the sky-high hostility from the private sector with equal rancor of their own, letting their inner liberal-populist feelings run wild. They believe business is reacting the way it is because the President is changing the balance of power from the Bush years, when the wealthy and elite were favored, toward a preference for workers and the middle class.

Where Obama's head and heart lies on these issues is, as usual, less clear. He certainly shares the irritation of his more liberal strategists that Big Business is being insufficiently grateful for all he has done for their needs and the nation. And he certainly believes in the power of the market much more than his detractors understand, or than his support for some emergency measures would indicate. He is likely to be surprised by the number of defections of big-money Democrats who raised contributions for him in 2008 and who will now — after the financial regulation bill is signed into law — begin a rigorous three-year-long effort to eliminate Democratic control of Congress and remove Obama from the White House.

The opportunity to fix, or, at least ameliorate, the problems between the President and Big Business is actually coming to a head just as Obama is tackling the issue of energy reform (while the monstrous crisis of the BP oil spill looms large over the debate). Just as on health care, many forward-thinking CEOs understand that the status quo on energy is unsustainable, both for them and the country. Early on in the health care legislative fight, Obama corralled and touted a lot of support from the private sector for reform. He lost some of that backing during the meandering process, but he kept enough on board to keep the final deal from being seen as unambiguously antibusiness.

There is plenty of overlap in substance between what Obama would like to do on an energy bill and what Big Business leaders would prefer (the details in the House bill and some Senate plans notwithstanding). The public backing of a whopping energy measure by prominent private-sector leaders, including some Republicans, would go far in calming skittish pre-midterm Democratic incumbent jitters, winning over moderate voters and perhaps nabbing some Republican congressional support. Obama needs that business support so the legislation will be seen as job-creating rather than job-killing. The problem for the President is that just when he needs them most, many in Big Business have already given up on him.