Business Need Not Fear Obama.

Emergency plans for a doomsday scenario are being rehearsed up and down Washington's K Street, even as we speak. Anxiety is high among corporate lobbyists and organized business trade groups, who have been meeting since the election, hoping to discern the impact of the new Obama era. The working presumption seems to be that Obama's administration will be anathema to the things that really matter to big business.

But business need not fear Obama. It should beware of the fear of F.E.A.R.--False Evidence Appearing Real. When it comes to the corporate sector and the business of America, President-elect Obama's early moves suggest that his policies will stress acumen over antagonism, results over retribution and deal-making over dogma. The fears of radical regulation may very well be overblown. And business could find that Obama will be a stern, but steady, friend at a time of unprecedented challenge and perhaps unforeseen opportunity.

Here are a few things that should provide some context, if not comfort.

Acumen over antagonism, results over retribution: For all of the campaign bluster blaming big business for American economic woes, Obama is not and never has been an anti-corporate crusader. Obama's key economic appointments suggest his administration will pursue acumen over antagonism when it comes to the business sector. The designations of Timothy Geithner, Lawrence Summers, Christina Romer and Melody Barnes will allow the president-elect to hit the ground running with an economic team of advisers who are cozier with the business community than former candidate Obama might have wanted to acknowledge in a campaign for change. The fact that none of these people has an ax to grind with big business should be of considerable comfort to the business lobby.

Deal-making over dogma: If Obama has proved anything, it is that he is an uber-pragmatist who prefers practical solutions over dogmatic ties to political philosophy. While business may have taken solace in the mainstream Republican ideology, it will be surprised at how non-ideological Obama may prove to be. After all, he has shown a willingness to borrow from the best of conservative, liberal, progressive and libertarian thinking in the development of his own world view. His commitment to success will compel him to think and act far outside the constraints of predictable political dogma.

Balancing commerce and the Constitution: More than any other president before, save Thomas Jefferson and James Madison, Obama is acutely aware of both the expanse and the limitations of government power. His facility with constitutional law may be unparalleled in American presidential history.

As a constitutional scholar, Obama knows, or should know, the balance that must be struck between permissible government regulation of business, trade and commerce on the one hand, and the light touch of regulation on the other that fuels innovation and investment in the marketplace.

Above all, he should appreciate the wide swath that the commerce clause of the Constitution cuts through our lives and should direct his cabinet and his erstwhile congressional cohorts to err on the side of less--not more--government regulation.

In the area of commercial marketing and advertising, for example, a string of successive Supreme Court decisions have struck down burdensome restrictions on commercial speech as impermissible under First Amendment jurisprudence. The president-elect should recognize that heavier regulation in that sector, alone, will mean less revenue for many, many industries.

It will be important for the president-elect to send clear, unambiguous signals to his fellow Democratic leaders in Congress that he expects them to treat business with prudence and pragmatism. He must allay the anxiety that went through the corporate sector when Rep. Henry Waxman (D-Calif.) was elevated to the chair of the powerful House Energy and Commerce Committee.

Obama should seek to work with proven pro-business Democrats such as Sens. Tom Carper (D-Del.) and Max Baucus (D-Mont.) and Rep. Steny Hoyer (D-Md.), the House Majority Leader, Speaker-in-waiting and chief arm-twister on important floor votes. These men can and should be trusted sounding boards on the effects of public policy on business.

Of course, as with any other administration, the business community will have its differences and spates with Obama, and some will be more serious than others. There could be a blowup over the president-elect's popular tax proposal or the sweeping stimulus package. There could be a bit of bloodletting over executive pay or corporate governance. Or there could be a dustup over a decision to bail out one industry over another.

Whatever the issues are that will bring business and Obama face-to-face, I would bet that Obama's goal every time will be to carve out a win-win scenario so that the public good does not obstruct the gains of the private sector.

Last but not least, all indications are that Obama will challenge big business--as he has challenged us all--to become its best; to live up to higher standards and ideals, and to contribute to society and humanity in a way that it has never done before. Such an outcome surely would profit our nation, and the dividend would go directly to the bottom line.

Hoffman is chairman of the American Business Leadership Institute in Washington, D.C., and a member of the graduate faculty at Georgetown University.

COPYRIGHT 2008 Reed Business Information, Inc. (US)

Economic crisis makes for strange political bedfellows.

As a severe fiscal winter sets in, the major political parties may be borrowing more and more -- from each other's sales pitches.

Elected Democrats -- presumed to be pro-tax, pro-spending, and pro-labor -- are forced to slash government budgets and will try their best to look fiscally prudent and business-friendly. Republicans -- supposedly all about free enterprise and small government -- led the way for a federal bailout of private companies. And, in New York, the GOP will look to preserve its alliances with public-sector unions.

They may as well take pages from each other's playbooks in this way. State legislators and budget-watchers seem to generally agree that the Wall Street blowout is so severe, every option for stemming red ink will come into play. The Ravitch commission's proposals this week for funding regional transit service might serve as a preview. They include tolls on the East River bridges and a new payroll tax on businesses in the metropolitan area. But don't expect this to prevent higher fares. You'll get those, too. Call this a holistic approach to economic pain. A rough outline of what to look for, statewide:

Given how bad the deficits are, at least some public employee layoffs look likely because they offer executives a fast way to save a lot of funds. The long-standing presumption is that union leaders would rather lose members than make deep concessions -- since those dismissed are less likely to be around to vote to oust them. Expect increasing calls for a new tier of thinner pensions for incoming public employees.

Expect continued pressure from the Democratic-controlled state Assembly for higher income taxes on the wealthiest, though that plan alone as it stands won't fill the full budget gap. Those bent on consolidating special taxing districts in the name of efficiency may find a new urgency to their cause. Gimmicks are forever. Putting off an employee's first paycheck for a week or two, putting employees on corporations with separate revenue streams, selling assets and leasing them back, are variations of this. School budgets, and their pressure against property taxes, will loom large. So will the mounting costs of health-care subsidies. Cuts, at least in the rate of increases in these areas, seem a sure bet. Gov. David A. Paterson's highest-profile assignment, in his short tenure as lieutenant governor, was heading up the The Empire State Stem Cell Trust -- a special revenue fund created specifically to collect and distribute hundreds of millions of dollars in grants in support of stem cell research. The fate of the expected funding levels is in doubt. Paterson already has begun scaling back big commitments to biotech initiatives. Opposing fiscal camps for years have had their more left and right New York champions in Frank Mauro, of the Fiscal Policy Institute, and E.J. McMahon of the Empire Center for New York State Policy. From the left, Mauro recently argued in a public forum that the state should "not rely solely on drastic cuts in state spending" but tap the state's reserve fund "for this very purpose," surgically cut wasteful spending and impose a "high-end" income-tax surcharge. From the right, McMahon recently called for a permanent reduction of the size of the public sector, "sweeping reform" of public-employee labor laws that set "overly favorable" bargaining terms for unions, and reforms of public pensions and restructuring government-retiree health benefits. If the fiscal crisis deepens as expected, the pols in charge will negotiate these suggestions.

The question becomes what mix will prevail. Or, to view it another way, which interest groups will get to bleed the least.

COPYRIGHT 2008 Newsday

STEEP JOB LOSSES ADD TO PRESSURE FOR U.S. STIMULUS

The government's report of a giant job loss in November, the biggest monthly decline in a generation, puts more pressure on Congress and the administration to move quickly on a stimulus package, mortgage relief and perhaps financial aid for Detroit's big automakers.

The nation's employers cut 533,000 jobs in November, the Bureau of Labor Statistics reported Friday.

Not since December 1974, toward the end of a severe recession, have so many jobs disappeared in a single month -- and the current recession, far from ending, appears to be just gathering steam.

''We are caught in a downward spiral in which employment, incomes and spending are collapsing together,'' said Nigel Gault, chief domestic economist for IHS Global Insight. ''With private spending frozen, we have no choice but to rely on a stimulus package to revive the economy.''

The unemployment rate rose to 6.7 percent, up just two-tenths of a percentage point from October, but up six-tenths over the last three months. More than 420,000 men and women who had been working or seeking work in October left the labor force in November.

More significantly, the unemployment rate does not include those too discouraged to look for work any longer or those working fewer hours than they would like. Add those people to the roster of the unemployed, and the rate hit a record 12.5 percent in November, up 1.5 percentage points since September.

Noting that 1.9 million jobs have been lost since the start of the recession a year ago -- two-thirds of them since September -- President-elect Barack Obama invoked public spending as the best way to get a dead-in-the-water economy moving again. ''This painful crisis,'' he said in a statement, is an opportunity ''to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children,'' and by investing in clean energy projects.

A goal of all this spending is to generate 2.5 million jobs over the next two years, he said, repeating an earlier pledge. Given the accelerating job losses, hitting that target would barely recover the jobs that have disappeared over the last year.

As part of Friday's announcement, the government revised higher its estimates of jobs lost in September and October. Instead of 524,000 jobs disappearing in those months, 723,000 were lost, or a total of 1.2 million jobs in just three months. In all, jobs have been lost in each of the last 11 months.

''Obama is being deliberately unclear about those 2.5 million jobs,'' said Robert Pollin, a University of Massachusetts economist. ''He is not going to add 2.5 million on top of recovering the 1.9 million that have been lost so far this year.''

Despite the deterioration of the labor market, Democrats in Congress and a lame-duck president remain in a standoff over rescue measures.

At its core, the stalemate between the Republicans and the Democrats springs from fundamentally different views about the nature of the crisis and the role of government in resolving it. The White House contends that it has rightly focused on the credit and housing markets, while the Democrats see economic problems that can be resolved only through broader intervention.

New efforts to adopt a broad economic package are likely to wait until the new president takes office and Democrats have bigger majorities in Congress. That delay poses the possibility of a deeper recession, according to some experts.

President Bush, appearing in front of cameras on Friday morning at the White House, said he was ''concerned about our workers who have lost jobs.'' But he offered no hint of softening his opposition to either a stimulus package or a bailout of the automobile industry, saying that the measures already put in place by the Treasury Department and the Federal Reserve to ease credit problems would take time to work.

Shortly after his appearance, a White House spokesman, Scott Stanzel, dashed any expectation of a change in policy when he said that officials expected a stimulus package would ''happen in the next administration.''

Support is building for a significant stimulus package as the economy slips into a deep recession. Most forecasters expect the gross domestic product to contract in the current fourth quarter at an annual rate of 4 or 5 percent, and continue to contract through most of next year, shrinking by 2 percent for all of 2009 -- a contraction that has occurred only once since World War II: in 1982, a year of severe recession.

''If there was any doubt that a very large fiscal stimulus is required, then the numbers we have been getting recently should dispel that doubt,'' said Jan Hatzius, chief domestic economist for Goldman Sachs. To offset the private sector retrenchment, he added, ''we will need a stimulus package of $600 billion at an annual rate, or $1.2 trillion over two years.''

Economists and policy makers increasingly share his estimate of what it will take to revive America's $14 trillion economy, with Democratic leaders talking recently about a stimulus package of $400 billion or more.

Though any broad economic package seems to be delayed, Democrats still had faint hopes of approving next week a rescue package for the car companies. Their goal would be to prevent far more rapid deterioration in the job market.

The latest job numbers were stark evidence of a breakdown in consumer spending and business investment since mid-September, when the Treasury Department and the Federal Reserve decided to let Lehman Brothers fail, delivering a shock to the financial sector. Almost simultaneously, stock prices began a free fall, undermining the wealth and the retirement accounts of millions of Americans.

''We have recorded the largest decline in consumer confidence in our history,'' said Richard T. Curtin, director of the Reuters/University of Michigan Survey of Consumers, which started its polling in the 1950s.

Job loss has played a big role in this erosion, he acknowledged. But so have fewer hours of work, smaller bonuses, less overtime, falling home prices, falling stock prices and a drumbeat of job cut announcements -- the most recent, this week, from big names like AT&T, Viacom, CVS, DuPont and the Avis Budget Group.

The Dow Jones industrial average, down more than 20 percent since mid-September, fell Friday morning in response to the November jobs report, but recovered later and gained 259.18 points, or 3 percent, by the end of trading, to close at 8,635.42.

With home prices still in decline, one in 10 mortgage holders was either delinquent on loans in September or in foreclosure, the Mortgage Bankers Association reported Friday. That was up from 9.2 percent in June and the highest percentage since the association began to collect this data 30 years ago.

The mortgage crisis makes lenders ever more reluctant to lend for the purchase of homes, autos and other big consumer items. In more normal times, lenders bundle these loans into securities and sell them. The buyers of these securities have disappeared in the current credit crisis, however, and the Federal Reserve is considering ways for lenders to borrow from the Fed, using the securities as collateral.

Jobs disappeared last month from every sector of the economy except health care and state government, which mainly added educators. The biggest losses were in manufacturing, construction, retailing -- despite the first month of Christmas shopping -- financial services, hotel and restaurant work and temporary workers. Over the course of the recession, 604,000 jobs -- nearly one-third of the total -- have been eliminated in manufacturing, and the Big Three automakers promise more layoffs to qualify for a federal bailout.

''Business shut down in November,'' said Mark Zandi, chief economist at Moody'sEconomy.com. ''Businesses are in survival mode and are slashing jobs and investment to conserve cash. Unless credit starts flowing soon, big job losses will continue well into next year.''

The administration says its recent actions are beginning to make credit flow more easily. ''We are pulling some very significant levers on the economy right now, through what we're doing with Treasury and what we're doing with the Fed,'' said Tony Fratto, a White House spokesman.

CAPTION(S):

PHOTOS: ON CAPITOL HILL: Back to front, RickWagoner, chief executive of G.M.; Robert Nardelli of Chrysler; Alan Mulally of Ford; and Ron Gettelfinger of the U.A.W., at a House hearing yesterday.(PHOTOGRAPH BY STEPHEN CROWLEY/THE NEW YORK TIMES); After being laid off at Bank of New York Mellon, Andrew Lubow visited a New York Labor Department office on Friday.(PHOTOGRAPH BY ROB BENNETT FOR THE NEW YORK TIMES); Nicole Miller continued her three-month search for work on Friday at a career transition center outside Los Angeles.(PHOTOGRAPH BY MONICA ALMEIDA/THE NEW YORK TIMES); In Oakland, Calif., Joe Daily was calling employers about job openings on Friday from a state employment office.

COPYRIGHT 2008 The New York Times Company