considerations played a role in the initial accumulation of this stockpile, the decision to forego profitable investment outlets for years on end, and to use the hoarded cash as a bargaining chip to get favors from Washington, was largely political.30
The Obama administration hoped that by pursuing pro-business policies it could boost business confidence in the White House, leading executives to release their hoarded cash in the form of new hiring and loans. Reporting on Obama’s February 2011 address to the US Chamber of Commerce, the Wall Street Journal described his speech as “a call to business leaders to use the $2 trillion in cash on their balance sheets to ‘get in the game’ and start adding jobs in the U.S.” Obama recognized that corporations’ disinvestment was a conscious choice, meaning that they might change their minds if he delivered the policies they wanted. As the Journal reported, his speech was a call to Chamber members to “stop hoarding cash and start hiring in return for tax breaks and other government support for exports and innovation.”31 By promising tax breaks, subsidies, and deregulation, Obama was trying to negotiate a relaxation of the strike. Notably, the policies he was offering had little to do with boosting consumer demand, which was ostensibly the primary reason for continued hoarding. None of these policy reforms would increase demand. They were designed to address not the economic causes of the problem but the political causes: corporations’ low confidence in the administration.
In order to boost business confidence and therefore end the capital strike, the Obama administration granted the dominant corporations in each sector virtual veto power over the reforms that might affect them. This dynamic was captured in a 2010 comment by former vice president Al Gore, bemoaning the failure of climate change legislation in the Senate. “The influence of special interests is now at an extremely unhealthy level,” Gore said. “And it’s to the point where it’s virtually impossible for participants in the current political system to enact any significant change without first seeking and gaining permission from the largest commercial interests who are most affected by the proposed change.”32 The following year, the White House scrapped a proposal to limit emissions of ozone, a key ingredient in smog. White House Chief of Staff Bill Daley explained to public health advocates that a “consensus with industry” could not be reached.33 As a general rule, no significant reform would succeed unless the “most affected” business interests granted “permission.”
In many other areas, proposed reforms were so watered down through corporations’ input that they became nearly meaningless. A 2016 law requiring the Environmental Protection Agency (EPA) to test and regulate toxic chemicals found in consumer products only passed because, as the New York Times reported, Democratic leaders in the Senate “worked closely with the American Chemistry Council,” the leading industry lobby, “to come up with language that would win the support of the industry.” Doing so meant that the EPA’s rate of testing for some 64,000 toxic chemicals would be significantly reduced in the bill’s final version, to what the Times called “a fairly slow pace” of “20 chemicals at a time, with a deadline of seven years per chemical.” At that fairly slow pace, it could take 22,400 years to test all the chemicals—meaning that the vast majority of toxic chemicals would be sold and used without EPA testing. As an added gift, the new law would also prevent individual states from requiring timelier testing.34
The power of the capital strike in these cases was amplified by business campaign donations. Corporate money helped ensure that the White House and Congress would interpret corporate threats in the right way: giving in rather than defying the polluters and poisoners. Corporate cash had helped to elect Obama and to disqualify challengers to his left. Long before the 2008 election, media profiles had noted the “deeply conservative” inclinations of Obama “the conciliator,” qualities that corporate donors liked and sought to reinforce with their checkbooks.35 Donations also helped ensure the appointment of pro-business advisers, including a slew of economic officials with close ties to Robert Rubin, the former chairman of Goldman Sachs and Treasury Secretary who had led the deregulation of Wall Street in the late 1990s. On Obama’s new National Economic Council alone, Lawrence Summers came from the hedge fund D. E. Shaw, Michael Froman from Citigroup, and Diana Farrell from Goldman Sachs.36
By appointing Rubin’s henchmen, Obama was not only repaying the donations, but also seeking to boost business confidence and spur new investment. The Rubinites, in turn, would be keenly responsive to business demands and threats of disinvestment in the future. It was a vicious cycle or a virtuous one, depending on one’s perspective. Chief of Staff Bill Daley, who had insisted on a “consensus with industry” before any new ozone regulations could go through, was a direct transplant from the corporate world. He came to the White House from JPMorgan Chase and also served on the boards of military contractor Boeing and a leading pharmaceutical company. His appointment was meant to signal the administration’s commitment to business confidence. Obama’s announcement touted “the breadth of experience that Bill brings to this job,” including the fact that “he’s led major corporations,” giving him “a deep understanding of how jobs are created and how to grow our economy.” The Chamber of Commerce president heralded the appointment as “a very, very strong choice.” Unsurprisingly, one of Daley’s favorite strategies for growing the economy would be eliminating regulations on business.37
This example suggests the mutually reinforcing nature of corporations’ various strategies for influence. Daley’s appointment and the policies he pursued were meant to cajole business investment, in addition to advancing his own class interests. Corporations’ control over the economy worked hand-in-hand with other tools.
Obama was not unique. Business clearly called the shots under George W. Bush and has even done so under the erratic narcissist Donald Trump. He may proclaim himself a “hard-driving, vicious cutthroat” leader unfettered by “special interests,” but Trump is still strongly bound by capitalist constraints.38 On the few occasions when he has challenged certain business interests, he has been met with powerful resistance. The same fundamental patterns characterize US politics regardless of who is in office.
The Disruptive Power of Government Institutions
The Obama era also demonstrated that business leaders are not the only elites with the power to thwart policies they dislike. Sometimes, the key interests blocking progressive change are powerful state institutions like military leadership, anti-immigration agencies like the Border Patrol and Immigration and Customs Enforcement (ICE), or local and state police forces. These institutions do not wield the economic power that business does, but they do exercise great control over the process of policy implementation. They too possess various means of disrupting the operation of government and society, and as such they are in a position to thwart policymakers’ attempts to cut their budgets or infringe on their privileges. Their permission is typically necessary for successful reforms in their policy domains or even for holding their members accountable when they commit crimes.39 And, like the capital strike, disruptive behavior by these institutions exerts long-term impacts on policymakers’ behavior. Just as most policymakers develop an ingrained sensitivity to business confidence, they learn to cultivate the confidence of these powerful government bureaucracies.
The fulfillment of key Obama campaign promises was made subject to approval by elites in the affected state agencies. In the case of the Guantánamo Bay torture camp, which candidate Obama had vowed to close, leaders
