CNA parent CEO: ‘Business feels unloved’

By Reuters
Posted July 14, 2010 at 1:32 p.m.

The Obama administration is making businesses feel “unloved” and reluctant to put money to work, hampering the U.S. economic recovery, the chief executive of U.S. conglomerate Loews Corp., which owns CNA Financial among other companies, said Wednesday.

Companies are hunkering down amid uncertainty about the future cost of doing business and are further unnerved by the Obama administration’s response to the BP Plc oil spill, CEO James Tisch told Reuters in an interview.

Loews’ businesses range from commercial insurer CNA Financial to Diamond Offshore Drilling Inc to Loews Hotel.

“A number of people, including me, ascribe part of our economic malaise to the fact that business feels unloved, feels uncertain,” Tisch said.

His remarks add to growing signs of a rift between Washington and the business community that could prove more than just a headache for President Barack Obama. U.S. businesses are holding onto a record $1.8 trillion in cash. The Obama administration wants to encourage them to invest some of that money to help jump-start the economic recovery.

Tisch said businesses are “operating in a fog” as it is unclear what costs they face from financial regulatory and healthcare legislation, which have been central to Obama’s reform agenda.

Some of that fog comes from the state of the economy, but a significant amount is due to policies in Washington, said Tisch, who is a registered Democrat.

“Business sees an administration that does not seem to be sympathetic to the problems of business. As a result there is a feeling among businesses ‘I need to stay in my bunker’.”

Loews Corp. has a market value of $15 billion, based on its closing share price on Tuesday.

Tisch, who is also chairman of Diamond Offshore Drilling, was particularly scathing on the Obama administration’s reaction to the BP oil spill in the Gulf of Mexico.

The administration’s moratorium on deepwater oil drilling was an overreaction and not needed, he said.

“You can clean things up without shutting it down,” he said. The federal government issued a revised moratorium on Monday, saying it would last until Nov. 30.

“The fact they just shut down an industry … sends a message not only to the offshore drilling industry but to American business writ large that this is not an administration that is focused on businesses employing people and growing the business community,” he said. The White House said on Wednesday that Obama’s economic policies have significantly boosted U.S. growth and hiring this year.

A quarterly White House report estimated Obama’s $862 billion economic stimulus package, which he signed last year, has so far lifted employment by between 2.5 million and 3.6 million jobs, while giving growth a big boost. The U.S. Chamber of Commerce, a leading business group, urged Obama and his Democratic allies in Congress to shift their approach to “unlock frozen capital and jolt our economy back to life.”

Tisch said if there was a second stimulus he would want to see it spent on defense capital equipment. “If we were to have a second stimulus, we ought to… build ships, build humvees, rather than digging holes and filling them in again. Let’s at least get something for our money.”

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One comment:

  1. Greg Independent July 14, 2010 at 5:59 pm

    Obama’s stimulus plan did not create jobs or put people back to work. All it did was help some companies meet payroll and prevent cutbacks. That’s not job creation.

    While Obama was it’s U.S. Senator, Illinois helped lead the nation in unemployment and the flight of thousands of high paying manufacturing jobs. How could the American sheeple be so stupid as to elect a President who has never held a real job, who has never created jobs in Illinois, and now has no clue how to create real jobs by helping businesses prosper? Because they want government to take care of them and give them everything; permanently attaching their mouths to the government teat. Well, it’s hard to “spread the wealth around” when there is no wealth.

    A broke, bankrupt, debt-burdened and corrupt Illinois is a glimpse into the future of the entire United States under the Obama rule. Vote them out!!