A truce in Obama's war on business?
The administration has finally acknowledged that some of its policies have hurt companies.
By Jim Cramer, TheStreet
What happens if the administration means it -- if there is a truce in the war against business?
I hesitate to say what could happen; it would be so bullish, because the administration's endless push for an agenda that scares businesses from hiring has caused much of the unemployment stagnation in this country.
First, I don't know if there is a truce. We have some positives in the papers -- something that the administration would never allow, as it has tight control over the media (the tightest I have ever seen) -- including "Revisiting the Regulations Affecting Business," an article in Monday's Wall Street Journal. We had Larry Kudlow's incredibly important interview with Tim Geithner, which made it sound as though part of the war, the collateral damage of the equity owners, might be coming to an end.
As I said last week, the administration didn't pick just any show on which to discuss how it wants the generous tax rates for stocks continued. It picked Kudlow's show on CNBC, and Larry is the foremost advocate for all taxes staying low on investments, more so than anyone on, say, Fox.
That matters, even as it is a congressional decision. I remain convinced that Congress is an Obama puppet, or an Obama lapdog, at least until the November elections.
Second, and perhaps more important than a truce, is that the Obama administration has at last acknowledged that there is a war, or at least a battle, that has hurt business.
The agenda that President Obama miraculously pushed through has frozen business. Corporations have more money on their balance sheets than they have in years, but they don't hire. I think it makes no sense to hire, at least in this country, until you figure out what "comes next." If there is never a cessation to plans that affect business, then who the heck cares to hire?
However, simple acknowledgment by the White House of "cooperative" business leaders like Ivan Seidenberg, the chairman of the Business Roundtable, a suddenly important group because it spoke up; Jim Owens of Caterpillar (CAT); and Jeff Immelt from General Electric (GE) could go a long way toward making corporations less nervous to hire. (I am not talking about Steve Wynn, who basically took the administration apart in his CNBC interview a few weeks back).
That's because, to date, the administration has been adamant that its agenda is "good for business." That's right, good for business, something the third most important person in government, after Obama and Nancy Pelosi, said in a recent softball interview. I say softball because it went unchallenged by the usual cooperative ideological media acolytes who share Obama's distaste for business.
Now, I am not giving credence to anything other than a potential "truce." There's no reason to. Items like cap and trade and the end of secret ballots for union election don't get thrown under the bus by Obama. They get put on hold until after the November elections.
Still, the acknowledgment matters, and it isn't all just election-related. It is empirical as nations around the world recover from anemic growth -- nations like Mexico and South Korea and Australia, not just China and India. Even the non-ne'er-do-wells in Europe are making better strides than we are. The disparity is so great that the ideological media may be forced to acknowledge it.
I think a lot of last week's rally had to do with a potential shift in policy at the White House. Will it continue? Again, that's the wrong question. The fact that it was acknowledged removes another prop in the case for a bear market as hiring becomes the White House's primary focus. (Of course, it would always say it was, and the media would not challenge it, until now.)
Random musings: I have surveyed Alcoa's (AA) businesses, and instead of thinking it could break even, I now believe it will show a loss and a negative outlook because of some serious incompetence at the top; seems congenital there. As usual, I simply wish I could be part of the earnings estimate consensus, which is as moronically optimistic as the folks who put together the housing figures.
Aon's (AON) big bid for Hewitt (HEW) is bizarrely positive. I say "bizarrely positive" because we have been devoid of takeovers in this field and it's a nicely sized bid. It could be viewed as a needlemover for today.
At the time of publication, Cramer was long Nucor and JPMorgan.
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