Capitalists Are People.

What I mean by that headline is this: In Econ 101, you're taught that firms endeavor to maximize profits, coolly examining various options and always choosing what is best for the bottom line. But the truth is that companies, just like other organizations, are made up of people. And people often misunderstand things, ignore things, and act against their own interests when their personal beliefs and prejudices get in the way.

Which brings us to this rather amazing Bloomberg article (via Kevin Drum):

Investors Show Obama No Respect in Poll as Profits Surge

Investors around the world say President Barack Obama is bad for the bottom line, even though U.S. corporations are on track for the biggest earnings growth in 22 years and the stock market is headed for its best back-to- back annual gains since 2004. ...

Investors are evenly split over their overall impression of the president, though 62 percent of those in the U.S. view him negatively. Worldwide, 63 percent of all respondents say his policies are detrimental to the U.S. investment climate. That number increases to 68 percent among U.S. investors, even though the Standard & Poor’s 500 Index has risen more than 43 percent since Obama was inaugurated in January 2009 and corporate profits have rebounded almost to the pre-recession peak reached in 2006.

Why should this be? Well, your average Wall Street tycoon is, guess what, a Republican. The idea that he would express pleasure and gratitude toward a Democratic president is just not in the cards, no matter what the results look like.

It's the same reason most corporate titans can't think straight on health care. What's the best health-care system from the perspective of corporate profit-maximization? It's not even close: single-payer. It's the least expensive, it does an excellent job of keeping their employees healthy, and it relieves them of responsibility for dealing with their employees' coverage, further cutting their personnel costs by eliminating the need for so many HR people to administer the insurance. Yet you'll find almost no CEOs out there advocating for single-payer health care. Why? The reason is ideology: because they're mostly economic conservatives, they find it to be socialistic and thus abhorrent, no matter the benefits it would bring to their bottom line.

I'm sure Obama would love to win the affection of our moneyed elite. But no matter how high profits rise, and no matter how many times he agrees to Republican demands to enhance the wealth of the wealthy, it's never going to happen.

-- Paul Waldman

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