President Barack Obama has been criticized for appointing a second-term Cabinet notably light on women. But another important group is missing as well: business leaders.
Of the dozen or so Cabinet officials who are either confirmed or awaiting confirmation, none comes from a job running or helping run a business. The closest is Defense nominee Chuck Hagel, who was a Nebraska businessman for 20 years before spending 12 years in the Senate. After leaving the Senate in 2009, Hagel was a director at Chevron and a member of "other private advisory boards," according to his official biography.
Treasury nominee Jack Lew was a senior executive at Citigroup from 2006 to 2009, but that seems to have been a kind of revolving-door sinecure that helped Lew, a longtime Democratic operative, pad his bank account during the latter years of the George W. Bush administration. Otherwise, Lew has spent most of his career inside the Beltway, where he returned to become a White House official when Obama took office 2009.
Most of Obama's other Cabinet members have had careers as lawyers, policy makers or elected officials. They're all highly qualified, but overall there's little expertise with the nuts and bolts of running a business, whether a Fortune 500 firm or a Main Street shop. "Someone who doesn't make a lot of money via the government and knows business should be a sounding board inside the administration," says Charles Payne, CEO of financial-research firm Wall Street Strategies. "This is the worst post-recession recovery ever. Businesses have just muddled along."
Obama could still appoint business folks to Cabinet slots that are open, or expected to become open, at the Depts. of Commerce, Labor, Energy, Transportation and Interior. One rumored nominee for the Commerce job, for instance, is Penny Pritzker, the Chicago hotel magnate and businesswoman. And corporate America has an expansive array of lobbyists in Washington who are able to get the ear of top decision makers. "If we can talk to the guy who talks to the president, that's what is required," says John Engler, president of the Business Roundtable, an association of CEOs. "And there's a heckuva lot of communication going on right now."
Still, Obama showed little inclination to tap business leaders during his first administration, and if anything he has sounded less conciliatory toward business so far in his second term. His inaugural address, for instance, included references to government-backed investments and collective action, but virtually no mention of the need to cultivate a more dynamic business environment.
The under-representation of business experts obviously fuels the impression that Obama is more hostile to private industry than his predecessors. George W. Bush appointed at least six business leaders to Cabinet posts, and Bill Clinton at least 5, according to Bloomberg.
Obama can get input from top businesspeople in other ways, of course, including informal roundtables and ad-hoc groups. Yet Obama is shutting down his Council on Jobs and Competitiveness, which was chaired by General Electric CEO Jeff Immelt and included several prominent business leaders. The council notched few tangible accomplishments, however, and Obama hasn't said whether he'll form some kind of replacement group.
Weak job creation remains a problem likely to dog Obama during his second term. Many economists and business experts feel the U.S. economy has lost its dynamism and needs ambitious new policies to unshackle entrepreneurs and boost growth. The U.S. ranking in the World Economic Forum's annual competitiveness survey has fallen from first to seventh since 2008, with the United States ranking in the bottom half of nations on a couple of measures.
Tax reform, streamlined regulation and new types of investment could make the United States a better place to do business and help create more jobs. Even if new ideas originate in Washington, they have to have a tangible, lasting impact on thousands of businesses if they're going to make a difference. Somebody in Washington needs to listen to the people who run those companies.
Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.