Obama’s challenge to the Chamber

OBAMA’S CHALLENGE TO THE CHAMBER…. When the White House announced that President Obama had agreed to address the U.S. Chamber of Commerce, the groans from the left were understandable. Chamber chief Tom Donohue and his massive business lobby had become one of the president’s fiercest adversaries, and the fear was that Obama would kowtow in his appearance, as part of some murky “shift to the center.”

If you haven’t seen or heard the remarks, they’re worth checking out. The president didn’t go the Chamber to be conciliatory; he went to the Chamber to challenge them. While there were expectations that Obama might move from his agenda and make concessions intended to please the business lobby, by most measures, the president did the exact opposite.

Much of the coverage of the speech is focusing on Obama urging businesses to “get in the game,” “get off the sidelines,” and “invest in America.” The president explained to his audience, “As all of you know, it’s investments made now that will pay off as the economy rebounds. And as you hire, you know that more Americans working will mean more sales for your companies. It will mean more demand for your products and services. It will mean higher profits for your companies. We can create a virtuous circle.”

And while that was important, it wasn’t really the point of the president’s appearance. Rather, Obama was there to present an argument, and defend its tenets — government activism is necessary to boost the private sector, and businesses have to take their civic responsibilities seriously if they expect to thrive.

On the first point, the president explained quite well that public-sector efforts lay a foundation for private-sector growth.

“As a government, we will help lay the foundation for you to grow and innovate and succeed. We will upgrade our transportation and communication networks so you can move goods and information more quickly and more cheaply. We’ll invest in education so that you can hire the most skilled, talented workers in the world. And we’ll work to knock down barriers that make it harder for you to compete, from the tax code to the regulatory system. […]

“Companies like yours have always driven the discovery of new products and new ideas. You do it better than anybody. But what you also know is that it’s not always profitable to — in the short-term, at least — for you to invest in basic research. It’s very expensive, and the payoffs are not always clear and they’re not always localized. And that’s why government has traditionally helped invest in this kind of science, planting the seeds that ultimately grew into technologies from the computer chips to the Internet. […]

“We also have a responsibility as a nation to provide our people with — and our businesses — with the fastest, most reliable way to move goods and information. The costs to business from outdated and inadequate infrastructure is enormous. And that’s what we have right now — outdated, inadequate infrastructure.”

On a related note, Obama went on defend regulations to an audience that exists to hate regulations.

“Even as we eliminate burdensome regulations, America’s businesses have a responsibility as well to recognize that there are some basic safeguards, some basic standards that are necessary to protect the American people from harm or exploitation. Not every regulation is bad. Not every regulation is burdensome on business. A lot of the regulations that are out there are things that all of us welcome in our lives.

“Few of us would want to live in a society without rules that keep our air and water clean; that give consumers the confidence to do everything from investing in financial markets to buying groceries. And the fact is, when standards like these have been proposed in the past, opponents have often warned that they would be an assault on business and free enterprise. We can look at the history in this country. Early drug companies argued the bill creating the FDA would ‘practically destroy the sale of … remedies in the United States.’ That didn’t happen. Auto executives predicted that having to install seatbelts would bring the downfall of their industry. It didn’t happen. The President of the American Bar Association denounced child labor laws as ‘a communistic effort to nationalize children.’ That’s a quote.

“None of these things came to pass. In fact, companies adapt and standards often spark competition and innovation. I was travelling when I went up to Penn State to look at some clean energy hubs that have been set up. I was with Steve Chu, my Secretary of Energy. And he won a Nobel Prize in physics, so when you’re in conversations with him you catch about one out of every four things he says.

“But he started talking about energy efficiency and about refrigerators, and he pointed out that the government set modest targets a couple decades ago to start increasing efficiency over time. They were well thought through; they weren’t radical. Companies competed to hit these markers. And they hit them every time, and then exceeded them. And as a result, a typical fridge now costs half as much and uses a quarter of the energy that it once did — and you don’t have to defrost, chipping at that stuff — and then putting the warm water inside the freezer and all that stuff. It saves families and businesses billions of dollars.

“So regulations didn’t destroy the industry; it enhanced it and it made our lives better — if they’re smart, if they’re well designed…. [T]he perils of too much regulation are also matched by the dangers of too little.”

The president went on to explain why Wall Street reform is good for the financial industry, and health care reform is good for businesses large and small.

The concerns that Obama might somehow show up at the USCOC event to kiss Donohue’s ring and promise to be more appeasing towards the business lobby were largely backwards. The president effectively brought his longstanding agenda to the Chamber, made a compelling case why it’d be good for them, and challenged them to get on board.

There’s a very good reason the AFL-CIO liked what it heard.

Update: Jed Lewison added, “I never would have predicted that President Obama would give a speech to the U.S. Chamber of Commerce in which he explained why economic inequality threatens America and telling them that they share some of the responsibility for closing the gap. But that’s exactly what he did.”