When I opened my WSJ this morning, there was a large horizontal color photo of PE Obama and the people who attended his economic meeting in Chicago on Friday. There were old school DEMs/Chicagoans (Rahm Emanuel, Bill Daley, and Penny Pritzker), economic luminaries (Volcker, Reich, Rubin), and Corporate Achievers (Google CEO Eric Schmidt, Time Warner Inc. Chairman Richard Parsons, Xerox CEO Anne Mulcahy).
I was most thrown by Jennifer Granholm (Michigan Gov) — whose policies have helped the auto industry over the cliff quicker. I guess she was there to make sure an auto industry failure looks as scary as the threatened financial collapse.
Mark Cuban was most unsettled by the fact that there were no real risk takers in the group — people whose whole lives were tied to their firms. As he states in his post, PE Obama’s 1st Big Mistake:
Not a single entrepreneur. Yes Warren Buffett started a business, but he will be the first to tell you that he “doesn’t do start ups”. Which means there isn’t a single person advising PE Obama that we know of that knows that its like to start and run a business in this or any economic climate. That’s a huge problem.
If we are going to solve our current economic problems, our President needs to get first hand information on the impact his proposed policies will have on real Joe the Plumbers. People who are 1 person companies living job to job, hoping they get paid on time. We need to know what the impact of his policies will be on the individually owned Chrysler Dealership in Iowa. The bodego in Manhattan. The mobile phone software startup out of Carnegie Mellon. The event planner in Dallas. The barbershop in LA. The restaurant in Boston.
Entrepreneurs that start and run small businesses will be the propellant in this economy. PE Obama needs to have the counsel of those who will take the real risk inherent in creating companies and jobs. Those who put their money and lives on the line with their business.
I agree with Cuban. There was no one in the photo that represents my firm (2 people plus a handful of interns). Our company is far more representative of the average US firm and especially new firms than the firms and interests assembled in Chicago.
We are 6 months old, pay various vendors (from lawyers and software providers to printing firms and publishers who we advertise with), and are looking to grow by a factor of 10 over the next 2 years. Whether we achieve that goal and others isn’t really the point. The point is that firms who do achieve goals like ours will be the firms that pull the US out of recession and back to growth.
Another interesting angle on forthcoming Obama economic policies comes from his links to the ‘Chicago School of Economic Thought’ and the faculty of the Univ. of Chicago’s Graduate School of Business. Obama’s rise to power in the Hyde Park neighborhood on Chicago’s South Side (home of the U of C) clearly has given him great access to top thinkers at Chicago. From the WSJ,
One reason for the alliance among economists at Chicago and elsewhere with Mr. Obama is that they feel he is a fellow traveler, sharing their empirical, data-driven bent. James Heckman, a University of Chicago Nobel laureate, looked over the Obama campaign’s education plan at the request of Austan Goolsbee, a Chicago business-school economist who is expected to head the White House Council of Economic Advisers.
“They were extremely interested in facts,” Mr. Heckman said. “There seemed to be, with the people I dealt with, less of an ideological bias and more of an empirical one. A lot of economists like to feel that the direction of the profession is going that way, too.”
Many economists were cheered in April when, amid higher gasoline prices, Mr. Obama opposed a gas-tax holiday — an idea supported by Sens. John McCain and Hillary Clinton, who was competing with Sen. Obama for the Democratic nomination. Textbook economics said in response to the tax cut, demand would simply raise gas prices to their previous level, and so the benefit of the cut would flow to energy producers rather than consumers.
“The gas-tax episode was a very good sign,” said Princeton University economist Jose Scheinkman, who spent most of his career at Chicago and was chairman of its economics department from 1995 to 1998.
BTW, Austan Goolsbee was a favorite of students when I attended the GSB. (I did not take a class from him).