Corporate Scandals

The Curse of President Obama's Council on Jobs and Competitiveness

At the next council meeting, Obama could invite employees who have been laid off by his own council members.


Employees who hope to keep their jobs and investors who hope their shares will rise may want to hope their executives avoid President Obama's Council on Jobs and Competitiveness.

When the council's members were announced February 23, among the concerns raised was that the members would use their status to the advantage of their companies. In fact, what's happened since then is that the 13 publicly traded companies whose executives were appointed to the council, taken together, have declined in value by about 7% through year-end, worse than the decline of about 4% in the Standard & Poor's 500 Index over the same period.

Eastman Kodak's stock has lost more than 80% of its value since President Obama named its chairman and CEO, Antonio Perez, to the Council on Jobs and Competitiveness. Citigroup is down 44% since Mr. Obama named its chairman, Richard Parsons, to the Council on Jobs and Competitiveness. The UBS AG shares traded on the New York Stock Exchange are down 40% since Mr. Obama named Robert Wolf, the chairman of UBS Group Americas and the president of UBS Investment Bank, to the Council on Jobs and Competitiveness. All these figures are adjusted for any dividends or splits.

If these council members haven't produced much by way of competitiveness, at least as measured by stock price, they haven't produced much in the way of jobs, either. In April 2011, Kodak announced 48 layoffs in Durham, North Carolina. In August 2011, UBS announced 3,500 layoffs. In December 2011, Citigroup announced 4,500 layoffs. Call it the Competitiveness Council Curse.

Maybe at the next meeting of the Jobs and Competitiveness Council, the president could invite some of the employees who have been laid off by his own council members to come testify.

It's certainly possible to make an "it would have been worse" argument, the same way President Obama does about the economy absent the stimulus. Perhaps without the advantage of having executives with input into government policy and access to government officials, Kodak, UBS, and Citi would all be doing even worse, and perhaps they would be announcing even bigger layoffs.

But it's also possible to make an "it could have been better" argument, which is that companies whose executives get politically involved in these sorts of boards generally do so as a kind of last resort, seeking to gain by political influence or decision-making what they have been unable to achieve through competition in the free, private marketplace. If these companies were stronger to begin with, the executives might be busy growing them, rather than sitting around at meetings in Washington trying to help President Obama appear more business-friendly.

It's true, too, that companies picked for these sorts of panels sometimes outperform rather than underperform. The predecessor of the President's Council on Jobs and Competitiveness was something called the President's Economic Advisory Recovery Board. It was named in February 2009 and included two executives—Mr. Wolf of UBS and Jeffrey Immelt of GE—who were also named to the Council on Jobs and Competitiveness. The four publicly traded companies represented on that Economic Advisory Recovery Board have outperformed the S&P 500 by more than 60 percentage points since the board was named. That board was active at a time when Mr. Obama's party also controlled both houses of Congress, and when the administration was dispensing stimulus money.

Even a one-shot event like a state dinner invitation, which might seem less significant than membership on a panel or council, can, when analyzed, appear to be linked to corporate performance that varies significantly from the overall market. The three public companies whose executives were invited to President Obama's state dinner for the chancellor of Germany, Angela Merkel, were up 14% since the June 7, 2011 dinner, while the S&P 500 was down 2%. The companies were IBM, Duke Energy, and Choice Hotels.

I've been tracking these matters with what I call a Crony Capitalist Index. There's nothing wrong with a president seeking advice from business leaders or socializing with them. I'd rather have some of the president's chosen businesses struggle and lay off workers than have the president take money from taxpayers to try selectively to prop those businesses up. But the embarrassment of having a President's Council on Jobs and Competitiveness whose members are laying off workers while their stock prices plunge is a cautionary tale about the risks of giving a select few businesses executives a presidential stamp of approval.

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  1. Like Obama gives a shit about jobs…

    1. Of course he does. The lack of them gives him cover to expand social programs.

    2. Clinton cared -way- more about Jobs.

      1. I did not have sexual relations with Steve Jobs.

  2. The spectre of 1932: How a loss of faith in politicians and democracy could make 2012 the most frightening year in living memory

    Today, Barack Obama cuts a similarly impotent, indecisive and isolationist figure. The difference is that in 1932, one of the greatest statesmen of the century, the Democratic politician Franklin D. Roosevelt, was waiting in the wings.
    Today, American voters looking for alternatives are confronted only with a bizarre gaggle of has-beens, inadequates and weirdos, otherwise known as the Republican presidential field. And to anybody who cares about the future of the Western world, the prospect of President Ron Paul or President Newt Gingrich is frankly spine-chilling.

    So how many more countries does Obama need to bomb to stop being isolationist?

    1. “…one of the greatest statesmen of the century, the Democratic politician Franklin D. Roosevelt,…”

      Uh, right.

      1. I guess extending the Great Depression by 7 years makes you a great statesman.

        1. “I guess extending the Great Depression by 7 years makes you a great statesman.”

          Let’s allow that there are folks who think he ‘ended’ the GD; you might then call him a great politician.
          But there is *nothing* in his CV that could possibly suggest he was anything of a “statesman”.

        2. nope, it’s imprisoning citizens without due process that is the hallmark of statesmanship.

          1. Oops, you’re right.
            Forgot that qualification; he was a *great* statesman!

      2. that line alone disqualifies the rest of the article from consideration.

        1. Wareagle, its Ira Stoll for god’s sake. Did you have to read any further than that?

    2. I don’t see how losing faith in our politicians and our gerrymandered “democracy” can be a problem for the citizenry. Once people realize who are responsible for the cluster we are in maybe we will start having serious discussions regarding solutions to our economic problems. The only losers would be the kleptocrats and their cronies.


      2. I don’t see how losing faith in our politicians and our gerrymandered “democracy” can be a problem for the citizenry.

        You know who else benefited from the decline of the uncritical electorate? The article has the answer.

  3. Report from the Council: “We’d have more jobs and competitiveness with lower taxes and less regulation.”

    Obama: “Ahahahaha! Seriously, any other suggestions?”

  4. Empty and boarded-up storefronts add character to a neighborhood.

    1. I suppose it does … if you’re filming a post-apocalypse movie.

  5. That sounds liek a very good plan to me dude. Wow.

  6. in 1932, one of the greatest statesmen of the century, the Democratic politician Franklin D. Roosevelt, was waiting in the wings.

    [cue scary music]

  7. In April 2011, Kodak announced 48 layoffs in Durham, North Carolina.

    I had no idea there were that many employees left at Kodak.

    1. Yep…all 48 remaining Fotomats….poof gone!

    2. I had no idea people still bought anything from Kodak.

  8. Obama and his minions can even fuck up at crony capitalism.

  9. Yanna is a 22 year old ballerina with all the grace and beauty of an artist born for the stage.

    SHE CURRENTLY stars as the lead dancer of the musical ‘Cats’ in her home land of the Czech Republic and lives in a dancer’s community with two other performers. It is no big surprise that her favorite body part is her legs which she of course shows off with a great deal of enthusiasm.

    Petter met up with Yanna in the city of Prague where they shot a nice collection of ballerina images. He was instantly drawn to her physical grace and hard working attitude. Yanna is very proud of her trained body and rightly so. She is indeed a natural beauty and takes to modeling with the same confidence she brings to the stage.

    Confident and sexy in all the right ways, Yanna is the kind of woman many of us only get to dream about.

    1. This guy kills me.

      “Obama cutting taxes…the country is falling apart…bomb Iran…cut taxes…corporate cronyism…etc…Say hello to Yolanda she’s a 23 year-old beaut from Lithuania…

      1. Hey buddy just doing my job.

        1. By the way, how did you know what next monday’s is going to be.

          1. Like I said. Classic. Good stuff.

  10. maybe the Council’s members could explain to Obama how the private sector works, why it is important, and under what conditions it grows. The last should be easy – do the opposite of what this administration has been doing. Of course, this requires believing the current course is NOT being done purposely.

    1. Obama is looking for a way to run the country *without* the private sector, wareagle.

      1. looks like his Council is helping him find that way.

        1. Meanwhile… at the Legion of Doom…

    2. maybe the Council’s members could explain to Obama how the private sector works …

      You are presuming that just because they are CEO’s of large corporations that they actually know something about economics. I wouldn’t count on it.

      1. There’s also the presumption that they have any idea of how a freed market might work.
        These guys have spent years seeking rents.

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  12. As far as economics goes, I consider myself to have only a superficial grasp. I could get blind drunk on my worst day and do a better job than Obama. Hell, a retarded, drunk monkey could.

    1. And has, I’m sure.

  13. “giving a select few businesses executives a presidential stamp of approval”

    Maybe we should find a way of letting a few select 535 people decide what’s best for every state/territory in the entire country.

    1. That’s too many people. Only a few dozen should be running our lives, if that.

      1. … but they have to be brilliant, dedicated people who care deeply about us and feel our pain.

  14. It seems the only other visionary left off Mr. Obama’s Committee was Jeffrey Lampert of Sears Holdings……..

    Dear me.

  15. h I do not care for Four Loko…..-3_11.html and probably will not start carrying my Scotch around in six-packs, such choices should be left to consumers, not paternalistic prosecutors or busybody bureaucrats. I

  16. I just realized this was written in 2002. I wonder what the gun crime rate is now. Any government that tells you that you have no right to self defense is not looking after your best interest. Self defense is the most basic right anyone has. No government or police can protect you. I can’t believe you all allow this to continue. I keep a gun at home for self defense and have a license to carry it concealed any where I go. And I do. If I am attacked then at least I have a chance to stay alive. By the time the police arrive they can either arrange for my body to be picked up or take a statement from me. I choose the later. Britons let a right be taken from them and now it will be much harder to get it back. But you should try.
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