Obama: Taking Care of Business?

In case you hadn't noticed, President Obama has been on a mission to love-bomb corporate America in recent weeks, from cutting a deal to extend Bush-era tax rates to peppering the State of the Union address with paens to private enterprise. But are business leaders buying into the courtship? After all, this is a president who came into office guns blazing about the business world's role in the economic crisis.

The answer, at least among moguls who gathered at the World Economic Forum in Davos: so far, so good—but we want more.

"We clearly felt they were antibusiness," said Jeffrey A. Joerres, the CEO of Manpower Inc., the big employment agency, while taking a break in Davos's "Strategic Partners" lounge as Bill Gates drifted by. "There was a total disregard for the fact that business creates jobs. What I'm hearing now, taken on face value, is what we need. The proof will be in where it goes from here."

So what will it take to close the deal with corner-office types? Backing off further regulation would be a start, say some business leaders. Henry Kravis, the private-equity pioneer, told NEWSWEEK he remains concerned about government micromanaging of the financial industry. "In the financial area, yes, industry made some mistakes and needs some reform, but let's not go to zero tolerance," Kravis said, pausing briefly to greet former U.N. secretary-general Kofi Annan. Similarly, insurance companies are watching the rollout of the regulations that implement Obamacare with a great deal of trepidation.

Lower taxes—perhaps unsurprisingly—are also on the wish list. Though Obama's tax deal left in place lower rates on personal income, capital gains, and dividends, executives argue they need corporate-tax relief to fend off global rivals. Manpower's Joerres, noting that service companies have difficulty racking up big tax deductions, complains that the U.S. corporate-tax rate is higher than the rates in Europe. "My two fiercest competitors are $100 million to $170 million a year better off than me in their country so they can invest in things," he said. "We can't be the highest [taxed] country."

Beyond those and other substantive changes, though, CEOs want still more change in tone from the commander in chief. Obama has already been talking up entrepreneurship. But some say it wouldn't cost him much to speak more highly of large enterprises. Michael Splinter, CEO of microchip-equipment maker Applied Materials, noted that much of the discourse about jobs revolves around virtuous small businesses. "But it's really big businesses that create jobs and a waterfall effect," he said.

This last yearning looms larger than you might think. Put simply, some CEOs want to be stroked—a fact made clear time and again in conversations with the brass at banks, manufacturers, and hedge funds. In the Bush era, they saw a president who celebrated them, catered to them, and let them guide the writing of regulations. And rather than interpret some of Obama's get-tough talk as politically driven, many took the posture as a sign of hostility. Notes David Rubenstein, chief executive of private-equity firm the Carlyle Group and a veteran of the Carter White House, "People did take the rhetoric somewhat personally."

"Our industry was demonized specifically," Michael McCallister, CEO of the giant insurer Humana, told me. "I don't think it's been helpful." Of course, in McCallister's case, the rhetoric was backed by legislation that may fundamentally alter his company's business model. McCallister and his colleagues met with Obama and his administration throughout the health-care debate, most recently on the 100th day after the signing of the health-care bill.

Of course, some of the past Obama-business divide was a function of election-year politics. And now politics is driving, at least in part, the new direction. With the battle of health care over and the 2012 campaign gears engaging, Obama has to do everything in his power to boost job creation. The addition of 1 million private-sector jobs in the past year has gone only a short way toward restoring the millions more lost in 2008 and 2009.

But with Republicans in control of the House and advocating big spending cuts, further fiscal stimulus is off the table. Debt-ridden cities and states are slashing jobs. After it completes its current round of bond purchases this spring, the Federal Reserve is likely to take a break from its extraordinary efforts to support the economy. All this means companies will be the only major force for job creation. Obama needs CEOs to make bold, confidence-building moves on hiring and investment.

George Soros, the billionaire hedge-fund investor, says the magnitude of Obama's shift has been exaggerated. "Actually Obama has been very pro-business, and I think business has been very anti-Obama," said Soros, one of the few Davos regulars who thinks the president was too soft on the financial-services industry. Soros argues that Obama's failure to crack down more has actually been to his political detriment. "He has awoken a very strong sentiment in the Tea Party because of his pro-business position," Soros said.

So once the corporate jets have safely delivered business leaders back to their headquarters, will they get what they want? Tone-wise, it's very likely. And additional regulation doesn't appear to be in the cards. But neither is a return to Bush-era Oval Office mind melds with business leaders to craft regulation and policy. The aftermath of the period where banks were essentially allowed to construct their own regulations still looms too large.

And to CEOs in some industries—especially technology—it may not ultimately matter that much what Obama says or does. "We're not waiting for Washington," Cris Conde, CEO of computer-software and services provider SunGard told me. "Regulation and health-care reform aren't in the top five—maybe not in the top 10—of the things I'm worrying about."

Gross is economics editor at Yahoo Finance.