Obama-style executives see government as a partner

President Obama's economic philosophy is corporatism, and the two corporate executives reportedly on Obama's short list for commerce secretary are perfect specimens of this state-industry collusion.

If Obama chooses former Pfizer CEO Jeffrey Kindler or former Google chief Eric Schmidt to head the Commerce Department, the media will declare it part of a “tack to the center” or “making amends with business.” Instead, it would simply confirm what we already know about Obama: His type of businessman is oriented toward government more than the market.

Kindler and Schmidt are both long-time Obama boosters. Kindler gave Obama $5,000 before the last election, while Schmidt was an Obama fundraiser and personally contributed $25,000 to Obama's inauguration. But the businessmen's coziness with Obama is not the issue — nobody expects Obama to appoint his enemies.

What makes their candidacy for commerce secretary so fitting is their view of the business-government relationship.

Pfizer under Kindler was the leading spender on lobbying in an industry that spent the more on lobbying than any other. The company's $25 million lobby budget in 2009 shattered industry records. But during the health care reform debate that year, Kindler wasn't just deploying revolving-door hired hands to K Street – he was working the halls of power himself.

Justifying Kindler's 12.5 percent salary increase to $1.8 million, the Pfizer's proxy report stated: “During 2009, Mr. Kindler was actively involved, through both Pfizer and external organizations, in developing and advancing U.S. and global public policies that serve the overall interests of our Company and our shareholders. These efforts included constructive participation in the U.S. legislative process to advance Pfizer's goals of achieving a more rational operating environment; improving Americans' access to quality, affordable health care.”

Kindler was at the first Obama White House meeting with the drug industry on March 5, 2009. He also took part in the June and July 2009 meetings at the White House where Obama agreed to drop his campaign promise to allow re-importation of prescription drugs — Pfizer's proxy statement specifically cites the preservation of this government favor when justifying Kindler's raise — in exchange for the drug industry's support of the bill and vulnerable Senate Democrats who backed it.

In the end, the bill provided new subsidies for prescription drugs, required states to cover drugs under Medicaid, preserved the re-importation ban, created 12-year-long, government-enforced monopolies on biologic drugs, and gave plenty more big-government favors to the industry. A few months after the bill passed, the Pharmaceutical Research and Manufacturers of America – the largest single-industry lobby in the country and a staunch supporter of Obamacare – tapped Kindler as chairman.

As a lobbyist, then, Kindler was a success. As a capitalist, though, not so much. Kindler was forced out of Pfizer in December. Reuters reported at the time: “Over the course of Kindler's tenure … Pfizer's shares have lost 27 percent of their value, underperforming a 10 percent decline in the NYSE Arca Pharmaceutical index of large drug makers.”

Schmidt's record is different, but with the same theme: business looking toward the government for profit.

Google has been as cozy with the Obama White House as any company. Former Google lobbyist Andrew McLaughlin is the White House's No. 2 tech policy official, and McLaughlin has violated ethics rules by discussing “net neutrality” policy with other lobbyists at Google.

The White House and Google both have pushed for federal regulations that would effectively make “net neutrality” the law of the land, creating de facto price controls on how networks (say AT&T or Comcast) can treat different content.

Google has even jumped onto Obama's green-subsidy bandwagon. In recent months, Google created Google Energy, a power wholesaler investing in wind energy and carbon offsets. But this isn't just about greening Google's reputation – the company is simultaneously ramping up its lobbying for green subsidies and regulations like Renewable Energy Standards and subsidies from the Defense Advanced Research Projects Agency. Invest in a dubious technology, then lobby for the subsidies and mandates that make it valuable.

And Schmidt himself has become more of a lobbyist. Earlier this year, he announced he was quitting the chief executive officer slot to become executive chairman, where he says “I will focus wherever I can add the greatest value,” including “government outreach.”

Schmidt and Kindler are cut from the same cloth as recent Obama hires Bill Daley and Jeff Immelt. They fit Obama's notion of an ideal businessman: one who will row the ship of the economy while happy to let the government steer.

Timothy P.Carney, The Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Monday and Thursday, and his stories and blog posts appear on ExaminerPolitics.com.

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