WSJ – John Bussey: In fog of warfare, a message to business

When their grandkids ask today's CEOs, "What did you do in the Great Class War, Granddaddy?" it will be enough to be able to answer: "Well, sweetie, I didn't get flattened." Tuesday night's State of the Union address offered much to business, but it also showed that companies will be something of a battleground across which the forces of 2012 populism—from the left and the right—will wage their campaigns, tank treads grinding, artillery pounding. It's "class warfare," says Daniel Loeb, founder of hedge fund Third Point, after the speech. He says he and his CEO counterparts are "sick and tired" of getting hammered for "engaging in the capitalist system." "I can't get a voice in D.C.," grumbles Barry Silbert, chief executive of SecondMarket, which focuses on alternative assets. Populism is "good politics, but it is bad economic policy," adds Daniel Yergin, the chairman of advisory firm IHS CERA, speaking Wednesday at a gathering of The Wall Street Journal CEO Council. No speech aimed at working America would be complete without a shot at China. Mr. Obama said he would create a new office to investigate "unfair trading practices in countries like China." But Mr. Obama leaned on a thin reed in underscoring his tough line: a tariff, pressed by the United Steelworkers union, that the administration invoked on Chinese tire imports in 2009. Mr. Obama said that "over a thousand Americans are working today" as a result. The tire industry, on the other hand, says the tariff got passed along to consumers as higher tire prices and retailers got hurt. Manufacturers say few jobs were affected, since imports lost from China were replaced by imports from other countries. After the speech, the U.S.-China Business Council, a trade group, said the tariff hasn't had "any positive effect" on jobs. The U.S. has booked more than $700 million in revenue from the tariff. Passed along to consumers, even in part, that's a stiff price to pay for those 1,000 jobs.
WSJ (SN)