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Saturday, October 30, 2010

Why are Businessmen Angry With Obama ?

Obama has clearly helped large US firms. Profits are soaring and the stock market is way up. Evidently the people who are supposed to manage large firms are extremely angry at him. Why ?

Kevin Drum thinks that they were totally spoiled by the Republicans and expect to be giving whatever they demand and to be praised no matter what happens.

I can think of some other possible causes of businessmen's insane anger.

It's the economy smart guy. No one is surprised that ordinary people are generally angry, because they economy is in the crapper, and direct that anger at Obama. The premise of the post is that businessmen are well informed and rational. I'd guess that many of them are upset that they can't do anything new, because that would imply investing and they have excess capacity, so they blame someone else. I admit I was tempted to say they are upset because, of course profits are low in a recession, but then I remember that during Obama's presidency profits grew faster than they ever did under Reagan, so that's not it.

I bet many of them watch Fox. Is there any reason to think they know what's happening in the real world ?

Also are you really enjoying having a President younger than you are ? I'm not. Also he's African American and they are old White guys all of whom know they can't say racist things and some of whom are racist. They are busy. They have to decide which news channel to watch.

Finally there is strategic whining. Obama is good for business, but they quite rationally think that the result of criticizing Obama is more powerful Republicans who give them what they want. Also Obama tries to mollify critics so wheels might squeek hoping to get greece. Or most of all, conservadems are pro-business but not totally crazy and obey if business shouts at them.

But all in all, I agree, they are totally spoiled, surrounded by flatterers and coddled by Presidents for three decades, they expect to be praised and thanked constantly.


Mike Kimel said...

The reason businessmen are angry is that there is an impression, completely separated from reality, that economic growth rates, and hence profits, are lower under Democrats.

Robert said...

A bear hug and Thanks for visiting my blog. I think that beliefs which are separated from reality come from something (evidently not looking at reality). I'm trying to understand what causes them.

I sure would like to read of the results of a questionaire on facts given to CEOs. My guess is that they would either refuse to answer or staff it out -- even if promised anonymity they won't reveal their ignorance.

It isn't totally hopeless. Larry Summers got a decent return rate on a questionaire which basically asked "do you have an extreme short term bias ?" answer yes. It seems they decide on profits by anticipating the flow of accounting profits (that is profits net of interest and depreciation) then discount that flow at 30% per year. THIORTY !

This is what they wrote in responding to a 2 question questionaire.

I'd guess that if you ask them if US GDP has grown faster when the top marginal income tax rate was high or when it was low, they would answer and answer wrong.

You might get them to fall for the Dems vs Reps but I doubt it. They won't answer more than 2 questions.