Catholic Citizen

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What does Barack Obama Know about Global Finance?

Much has been made of Barack Obama’s time as a “community organizer,” sometimes, I think, forgetting that he practiced law in the traditional way for 7 years and was a law professor at the prestigious University of Chicago, where he was offered tenure several times.

However, I believe few are aware that Barack Obama’s first job after graduating from Columbia University was with the Business International Corporation (1983-84), a publishing and advisory firm (which has been rumored to be a CIA front) dedicated to assisting American companies in operating abroad. He held a position as a research associate in its financial services division, where he edited Financing Foreign Operations, a global reference service, and wrote for Business International Money Report, a weekly financial newsletter.

Obama rarely talks about his time spent within the arcane sphere of global finance as an editor and researcher for Business International Corp., In a recent biographical campaign ad, Obama says he chose to “pass up Wall Street jobs and go to Chicago instead,” suggesting that after graduating from Columbia University he cast aside material pursuits in favor of self-sacrifice as a community organizer.

But in the years since, Obama has demonstrated an economic worldview bearing some common priorities with the first company for which he worked. At some points in his legislative career and presidential campaign, Obama demonstrated a willingness to let markets run their course when some other Democrats had sought a more forceful government hand. He rejects mandates for adults to buy health insurance and encourages the expansion of global exchanges for carbon-emissions credits. He has helped make it easier for private companies to take over public housing projects.

“I think that back in the ’60s and ’70s, a lot of the way we regulated industry was top-down command and control,” Obama told Fox News Channel in April. “And I think that the Republican Party and people who thought about the markets came with the notion that, you know what, if you simply set some guidelines, some rules, and incentives for businesses, let them figure out how they’re going to, for example, reduce pollution.”

As a political science major at Columbia concentrating on international relations, Obama took a senior seminar focused in large part on aid and capital flows between the first and third worlds. “It was a subject everyone was talking about,” said Michael Baron, who taught the seminar.

Obama recently told CNN that “it was natural for me to be interested in international affairs,” given the influence of his mother, an anthropologist he described as “a specialist in international development, who was one of the early practitioners of microfinancing . . . helping women buy a loom or a sewing machine or a milk cow to be able to enter into the economy.”

The job at Business International Corporation provided a crash course in market economics.  “We definitely learned our ABCs of the financial markets,” said Beth Noymer Levine. She was hired shortly before Obama and reported to the same boss. “I like to say Michelle Obama will be first lady, but I will always be first colleague.”

Levine and Obama worked on a variety of newsletters for companies doing business overseas. The newsletters were aimed at senior executives and had arcane titles like “Financing Foreign Operations” or “Investing, Licensing, and Trading Conditions Abroad.” Even in a company filled with smart people, Obama made an impression.

“I always say, he was very smooth and smart and together, and I was 23,” Levine joked. “I felt like a human train wreck next to him.”

Obama was even younger. But colleagues say he was mature beyond his years. True to its name, Business International had a global flavor. It was located near the United Nations, and many of the staffers, like Obama, had degrees in international relations rather than MBAs. It was the kind of place where a young person could take on a lot of responsibility, and you quickly learned to speak the language of the financial professionals for whom you were writing.

“You were thrown in the deep end, and you learned a lot, and you had to pretend to be more of an expert than you were,” said Dan Armstrong, who supervised one of the newsletters.

In his memoir, Obama recalls writing an article about interest-rate swaps — financial contracts in which parties agree to swap fixed and floating interest rates. His time at Business International rates only a few pages in the memoir, mostly as an example of the road not taken, when Obama opted for community organizing instead of what he called “stocks and bonds and the pull of respectability.”

Armstrong said Obama’s book exaggerates just how respectable Business International was, with its description of suits and ties and meetings with German bond traders. There was no dress code, Armstrong said. And there was nothing corporate about it.

“It was a company full of low-paid, hard-working, fun-loving young people,” Armstrong said. “It wasn’t part of a high-powered consulting or finance world. It was a little sweatshop.”

Armstrong was shocked when Obama quit after a year, without even having another job lined up. Most news accounts of Obama’s career omit the New York chapter altogether. Levine says she understands that.

“I can see why CNN would skip over it,” Levine said. “I mean, a lot of people had stops along the way in their careers that don’t exactly fit the rest of the story. And maybe it was enough of an exposure for him to the corporate world to be like, ‘OK, that’s not exactly what I want.’ ”

Still, researching and writing about hedges and forwards and currency fluctuations did give Obama at least a passing familiarity with the financial markets — and that knowledge is still evident today. Former Treasury Secretary Robert Rubin was surprised to learn that Obama had worked for Business International, which is now part of The Economist Group. But he wasn’t surprised that Obama is a quick study.

“My impression, at least, is that he’s got a good feel for financial markets and how they might react to what government does,” Rubin said.

Financial markets have grown much more complex since Obama was writing about them in the 1980s. And maybe he would have developed that same feel for the markets even without the job at Business International. But first colleague Levine thinks it was a good start.

“We were sort of thrown in. But when I reflect on it, we were all smart enough, and we had to learn by the seat of our pants,” she said.


References:

  1. Obama’s Early Brush With Financial Markets : NPR

    Jul 9, 2008 Barack Obama’s life is the year he spent writing about financial markets But the job at Business International Corporation provided a
    http://www.npr.org/templates/story/story.php?storyId=92337754
  2. Barack Obama’s Résumé

    1983-1984 Writer/Researcher for Business International Corporation. Barack Obama has introduced nearly 300 bills during his time in the U.S. Senate,
    obamasresume.org/

  3. FactCheck.org: Obama Polishes His Resume

    Jun 21, 2008 Presumptive Democratic nominee Barack Obama’s first ad of the general election But Obama’s work at Business International Corporation,
    http://www.factcheck.org/elections-2008/obama_polishes_his_resume.html

  4. Obama shows hints of his year in global finance – The Boston Globe

    Aug 6, 2008 Obama rarely talks about his year spent within the arcane sphere of global finance as a junior editor for Business International Corp.,
    http://www.boston.com/news/nation/articles/2008/08/06/obama_shows_hints_of_his_year_in_global_finance/

  5. Barack Obama’s Story Works as Editor at Business Internation Corp

    Apr 17, 2007 Directly after graduating, Barack Obama worked for one year at Business International Corporation. He held a position as editor in its
    http://www.ourstory.com/thread.html?t=223121

  6. Business International Corporation – Wikipedia, the free encyclopedia

    Business International Corporation (BI) was a publishing and advisory firm United States Senator Barack Obama‘s first job after graduating from Columbia
    en.wikipedia.org/wiki/Business_International_Corporation

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August 31, 2008 - Posted by | Uncategorized

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