Obama's Corporate Bully Pulpit

Should the White House announce an American version of royal warrants?


It's approaching the point where the Obama administration should just announce President Obama is starting an American version of royal warrants.

You know, those fancy shields with lions and crowns that appear on the sides of British goods like Walker's Shortbread—"supplier of oatcakes to Her Majesty the Queen"—or Cadbury's chocolates—"cocoa and chocolate manufacturers to Her Majesty the Queen."

The American program could start off with the Gap, sweater and light-warmup-jacket supplier to his majesty President Obama.

President Obama's recent shopping trip to Manhattan "was a reward for Gap, which is raising its minimum pay for employees to $10.10 an hour in keeping with Obama's stalled proposal to increase it across the board," The New York Times reported.

It's hardly the first time in his presidency that Obama has made a personal endorsement of a private business. In fact, it's a habit of his.

In July of 2013, he said he would "highlight" businesses that "set an example by providing decent wages and salaries to their own employees," naming Costco and the Container Store as examples.

In January of 2014, Obama visited a Costco in Maryland and lavished praise on the company. "Costco's commitment to fairness doesn't stop at the checkout counter; it extends down the supply chain, including to many of the farmworkers who grow the product—the produce that you sell," Obama said. "I got to tell you, when I walk around, just—I had a little tour of the produce section, the bakery—you could just tell people feel good about their job and they feel good about the company, and you have a good atmosphere, and the managers and people all take pride in what you do."

Back in 2009, at a White House/ABC News special town hall meeting on heath care, Obama told the CEO of Aetna, "Aetna is a well-managed company and I am confident that your shareholders are going to do well." (That turned out, by the way, to have been accurate—you could have more than tripled your money from then to now by investing in Aetna shares and reinvesting the dividends.)

Comparing President Obama's product or company endorsements with the British Royal Warrant can be useful for helping to understand the hazards of the Obama approach. In some sense, they are similar. They are both a stamp of approval from the head of state, which is what got me thinking to begin with about stamping a stylized "O" and the words "by appointment to his majesty President Obama" in the windows of Gap stores or Costco warehouses.

But there are differences, too, and they are instructive. In the case of the products endorsed by the British kings and queens, individuals have the freedom to choose. As the author of an admiring biography of Samuel Adams, the news that the Queen of England buys some product never makes me even the slightest bit more likely to buy it.

But President Obama, unlike the Queen of England, isn't just the ceremonial head of state. He is the head of government—a job somewhat akin to that of prime minister in Britain's constitutional monarchy.

And Obama is running around trying to change the laws so that every business has to pay its workers like Costco and the Gap do, and so every American has to buy health insurance from Aetna or some other insurance company.

It's almost as if the British Prime minister were trying to dictate that all chocolate be made with Cadbury's recipe, or ordering each resident of Great Britain to purchase a dozen packages of Walker's oatcakes each month.

Obama, unlike the Queen of England, also accepts campaign contributions, and a quick look shows that the presidential endorsements sometimes fall upon the companies whose affiliated persons have been generous with their support. Costco director and co-founder James Sinegal, for example, gave $35,000 to the Obama Victory Fund 2012; his wife Janet Sinegal gave $70,800 to the same group. Gap director William Fisher also gave $5000 to the Obama Victory Fund 2012, as did Gap director Robert Fisher; the Fisher family has a major ownership stake in Gap, in which, I should disclose, I am a small shareholder.

No one is suggesting any quid pro quo, though if a presidential endorsement can be bought with a mere $10,000 in campaign contributions, it's probably a pretty cost-effective marketing expenditure.

The other thing—and perhaps the redeeming quality of the whole situation—is that certain successful American companies like Gap and Costco are in some ways more popular with Americans than Obama himself is. At least those companies don't force you to shop there if you don't want to. Don't just take my bleeding-heart-liberal-community-organizer word for it, Obama is saying—even corporate giants like Gap and Costco can make higher wages work for their companies. Maybe, instead of putting a presidential seal on the window of Gap or Costco, Obama should hang a Gap or Costco sign on the front of the White House. At least those companies have a reputation for delivering value for a dollar.