If you buy into the conventional wisdom, life has gotten much harder for CEOs under President Barack Obama. Blackstone CEO Steven Schwarzman, for example, recently complained that when it comes to business, the Obama administration is like Hitler invading Poland.
Look at the facts, though:
- Corporate profits, which stood at $1.5 trillion in 2007, fell sharply to $1.26 trillion and essentially stagnated in 2009. But the trend during the Obama presidency has improved. Quarterly profits (reported at an annualized rate) rose from $1.18 trillion in the second quarter of 2009 to $1.42 trillion in the fourth quarter of 2009 to $1.64 trillion in the second quarter of 2010. In the second quarter of 2010, corporate profits were up 39.2 percent from the year-before quarter.
- This chart shows that corporate profits as a percentage of GDP rose to 11.25 percent in the second quarter of this year, the highest it has been since the last quarter of 2006. (Divide line 17 by line 6 if you want to do the math for yourself.) Despite slow growth, the piece of the economic pie coming to businesses has been growing during the past couple of years. It’s back to about where it was during the business-friendly Bush administration.
A lot of the credit goes to CEOs themselves. They’ve restructured their companies, cut costs and improved productivity. All this has been accomplished even as companies complain that new government policies are piling on costs left and right.
It could be that there’s more to come as new policies and laws take effect. But for now, CEOs are faring well under Democratic rule.
What do you think? Is business worse off today? Will it be worse off during the rest of the Obama administration? How much of the concern over business is real, and how much is a result of who’s controlling the public debate and perception these days?