Barack Obama rode a wave of economic discontent to the White House and now faces the daunting task of turning around the weakening economy.
Business groups wary of Obama's populist campaign rhetoric hope to make common cause with the Illinois senator and other congressional Democrats by pushing for an economic stimulus package, possibly as early as this year.
“We start off with a shared and very strong and mutual interest,” said Bruce Josten, chief lobbyist for the U.S. Chamber of Commerce. “The No. 1 issue today is … the economy.”
On Tuesday, six in 10 voters said the economy was the most important issue facing the country.
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As if underscoring the point, stock markets plunged again Wednesday.
The Dow Jones industrial average dropped 486 points, or 5 percent, to 9,139.27 while the broader S&P 500 fell more than 5 percent. Associated Press
An Obama presidency and a Democrat-controlled Congress could have a major impact on banking regulation, but the most immediate concern will be ongoing efforts to stabilize the banking system and the housing market, industry and consumer advocates said Wednesday.
One of Obama's first big decisions will be who to place in charge at the Treasury Department, said Ed Aycock, regulatory counsel for the N.C. Bankers Association, a state trade group. Secretary Henry Paulson is currently leading an effort to inject $250 billion in capital directly into banks, but many of the details are still being worked out. The goal of the plan is to free up lending to boost consumers and businesses suffering in the downturn.
Peter Skillern, executive director of the Community Reinvestment Association of North Carolina, said he expects new leaders appointed at banking regulatory agencies to more strictly enforce laws that could have stopped the subprime mortgage mess and to more closely scrutinize bank mergers. He also expects there will be interest in Congress in enacting a national predatory lending law that would better protect consumers.
“That's the role of government – to balance the playing field for consumers and lenders,” he said.
One likely battle front could involve a movement to loosen a 2005 law that made it tougher for consumers to shed debts in bankruptcy court.
Bank lobbyists have also stiffly resisted a push by Democratic lawmakers to allow bankruptcy courts to modify the mortgages of struggling homeowners.
In a statement Wednesday, the Financial Services Forum, which represents large financial firms such as Charlotte's Bank of America Corp. and Wachovia Corp., congratulated Obama on a “historic victory,” while signaling the need for the new administration and lawmakers to work with the banking industry in upcoming debates. Rick Rothacker
Obama proposed mandatory health care coverage for children and aimed for universal coverage by requiring employers to share costs of insuring workers. He wants to cover the growing number of uninsured people with a government-run program that would compete with the private sector.
Companies that don't provide enough insurance, or any at all, would have to pay into a special fund that would help pay for Obama's plan to let workers purchase health insurance from the private sector or from the new federal program.
How health care will be handled in the new administration remains one of the top concerns of small businesses that Kenny Colbert deals with. Colbert, president of The Employers Association, a Charlotte human resources consulting firm, said small business are anxious to hear specifics about Obama's plans, such as the size of small companies that would be excluded from paying into the fund.
He said several companies are saying they may consider dropping health care coverage if they meet the exclusion, and have their workers buy health care on the open market.
“(Obama's) plan may be a disincentive for some companies to offer health care (coverage),” Colbert said. Adam Bell
Obama has said he supports the proposed Employee Free Choice Act, which would allow informal union votes, called “card checks,” instead of secret-ballot elections, among other changes.
Under the proposal, a union would simply have to collect authorization cards from a majority of employees to be recognized – and could do so before the employer realizes an organizing effort is in the works.
In a statement released Wednesday, AFL-CIO President John Sweeney said the group's “top priority” is the passage of the act. Last year, the act was approved in the House but stalled in the Senate, which will now be more heavily Democratic.
That's caused some businesses to worry that a Democrat-controlled government could again push for the measure.
It's the one issue “that's scaring everybody to death,” with more unionization attempts likely in North Carolina and nationwide, Colbert of The Employers Association said.
The N.C. Chamber is opposed to legislation that would allow unions to organize without a secret-ballot election, spokeswoman Kerri Burke said.
At Lowe's, company officials are “opposed to the Employee Free Choice Act because it takes away an individual's right to a secret-ballot vote regarding union representation,” spokeswoman Chris Ahearn said in an e-mail.
Unions have been less popular in the Carolinas than elsewhere.
Last year, North Carolina posted the nation's lowest union membership rate – just 3 percent of workers belonged to one, far below the 12.1 percent national average, according to federal figures.
South Carolina had the third-lowest rate, with 4.1 percent of workers belonging to a union. Kirsten Valle
The down economy has hammered some retailers and sparked fears about a slow holiday season.
But Obama and other Democrats have said they support pumping money into the economy, though the details remain under discussion.
Retailers say there's hope that the Democratic surge could mean a new government stimulus package – which could, in turn, fuel more consumer spending.
“Our core customers could benefit” from some of the Democrats' campaign promises, such as a federal rebate, said Josh Braverman, spokesman for the Matthews-based Family Dollar. “Any opportunity to put money back in their pockets will benefit Family Dollar.”
Duffy Smith, who manages Alpine Ski Center on East Boulevard, said he'd like customers to spend more money.
He said he's not sure whether that's more likely under an Obama presidency – and while a cash influx could help business, he acknowledged the cost of such a rebate.
“Whether that's a good thing or a bad thing, I don't know,” Smith said. “It's got to be paid for by somebody.” Kirsten Valle
When foreign trade came up during the election, it usually was related to jobs – how to keep them in the U.S. without hurting the global flow of goods.
While an increase in exports has boosted employment in recent years, the Carolinas have lost thousands of jobs in the last few decades as some companies, namely textiles, have shifted production to other countries.
Obama often stated his support for free trade but said he wanted to “level the playing field” with other countries, said Alan Shao, a marketing and global business professor at UNC Charlotte and past president of the N.C. World Trade Association, an educational group that promotes international commerce. That means challenging countries that unfairly subsidize foreign exporters and have barriers on imports from the U.S.
Obama's campaign also said it would amend the North American Free Trade Agreement and end tax breaks for companies that send jobs overseas. Anything that stops the migration of jobs to other countries would be welcome in the Carolinas, Shao said.
In the first seven years after NAFTA was enacted in 1994, North Carolina lost 26,000 manufacturing jobs, he said. China also is an issue, Shao said, with the state losing 77,000 jobs to that country since 2001, according to the Economic Policy Institute. N.C. exports to China have grown dramatically in recent years, he said, but the volume is still much less than imports from China.
Obama's administration likely will offer more specifics next year, Shao said, but trade policies probably aren't as big a concern as domestic economic issues. Jefferson George