The Business of Business

The sixties were easy. Boomers remember. Big business was evil. The military-industrial complex was evil. Corporations were evil, with their conformism that sucked the souls out of all who worked there, the corporate drones, the suits. And their products were boring, the identical stamped-out little trinkets and big wallowing interchangeable cars, and their highly-processed foods were hardly food at all. Grow your own. And make your own clothes and everything else you could. Get real. Connect with the earth. And shrug at businessmen.

And have nothing to do with Republicans. They were the ones who made this wholly artificial America possible. They passed the laws that gave those people everything and left the rest of the country next to nothing. Happy-go-lucky nonconformists knew that this wasn’t really their country. Jack Kerouac would always be on the road. Ginsberg would howl. But the decade ended with Nixon in the White House.

The country was run for the businessmen. Republicans took care of them. Everything else – Medicare and Medicaid and Head Start and the Civil Rights Act of 1964 and the Voting Rights Act of 1965 – was an afterthought – something nice to have and perhaps good for business in some way. But the business of America was still business. Republicans gave the corporate world what it wanted, and was paid handsomely. They’d be able to stay in office. Republicans and the corporate world had become one.

But everything changes. Everything just turned backwards:

Florida Sen. Rick Scott (R) warned corporations opposing Georgia’s recently enacted voting restrictions they will face “massive backlash” during the midterm elections in an op-ed published Monday.

“You will rue the day when it hits you. That day is November 8, 2022. That is the day Republicans will take back the Senate and the House. It will be a day of reckoning,” Scott wrote for Fox Business in an op-ed framed as a letter to “Woke Corporate America.”

Scott, who leads the National Republican Senatorial Committee, went on to warn that companies’ donations to candidates would not help them.

“There will be no number of well-connected lobbyists you can hire to save you. There will be no amount of donations you can make that will save you. There will be nowhere for you to hide,” he wrote.

So that’s the message. Everyone hates you. We hate you. America hates you. And no one will buy what you’re selling ever again, but that’s problematic:

Scott is the latest politician to hit corporations for publicly voicing their disapproval of the law that Democrats argue makes it harder for many people, particularly minorities, to vote.

Last month, the CEO of Atlanta-based Coca-Cola James Quincey called the measure “unacceptable.”

A number of other companies, including Delta Air Lines, JPMorgan Chase and Major League Baseball, which pulled its annual All-Star Game out of Atlanta over the bill’s passage, followed suit.

But the people have now been warned. America hates Coca-Cola. America hates baseball. America hates anyone who has turned on Trump. That’s what this is about:

Former President Trump called on Republicans to boycott the companies earlier this month.

“For years the Radical Left Democrats have played dirty by boycotting products when anything from that company is done or stated in any way that offends them. Now they are going big time with the WOKE CANCEL CULTURE and our sacred elections,” Trump said in a statement.

Trump called on Republicans to boycott almost every major corporation in America, sounding like some hippie in a commune in rural Wisconsin in 1968, and of course that switches everything around. Biden is happy. He can work with these people and get what Democrats want, if Trump and his people hate them now. The Washington Post’s Jeff Stein and Josh Dawsey explain how that works:

The morning that President Biden introduced his jobs and infrastructure plan, senior White House officials briefed Goldman Sachs CEO David M. Solomon, Bank of America CEO Brian Moynihan and four other chief executives of the country’s biggest banks about the measure.

White House officials in a 24-hour period also briefed powerful business groups such as the National Association of Manufacturers, the U.S. Chamber of Commerce and Business Roundtable about the proposal, while also planning outreach to thousands of small businesses. White House senior adviser Cedric L. Richmond and White House National Economic Council Director Brian Deese were among the administration’s emissaries for the legislation.

The meetings were in part the result of an effort from the Biden administration to take advantage of the growing rift between corporate America and the Republican Party as they seek to sell the nation on more than $2 trillion in tax hikes.

Biden says he’s open to compromise with Republicans on $2 trillion infrastructure plan

“We have prioritized business outreach; we think they have an important role to play and that their voice is important,” said Zach Butterworth, the White House’s director of private sector engagement. “They know we’re operating in good faith and that we’re proposing policies that are good for workers and good for business.”

In short, if those other guys are going to be assholes, let them be assholes. Reasonable people have work to do, working out the details:

Commerce Secretary Gina Raimondo has spoken to more than 50 leading executives in recent days about the plan, according to her spokeswoman.

“Some executives have said they’re fine with the tax increases as proposed; others have said they’re expecting a corporate tax increase” and they were relieved Biden is not pushing for it to be increased to 35 percent, Raimondo said in an interview. The corporate tax rate was at 35 percent before Trump’s 2017 tax law. “Others have said maybe there’s some room for compromise on the rate or that the base doesn’t have to be broadened as much. To which I say: ‘The president has been very clear; there is room for compromise.’”

Biden will listen. They will listen. No one is being an angry fool. They’ll work this out without those angry fools:

Corporate America’s relatively muted reaction thus far to significant tax hikes was until recently unthinkable and reflects major changes in U.S. politics – the most important of which may be the recent falling out between the GOP and business elites.

When congressional Republicans worked to approve a $2 trillion tax cut in 2017, the GOP and corporate America worked together seamlessly to build support for the measure and push it into law.

Now, that relationship is under unprecedented strain. Congressional Republicans are incensed by corporate criticisms over GOP-backed voting restrictions and stances on culture war issues. Business groups, meanwhile, have increasingly eyed the GOP as a dangerous partner, toxic to their brand and harmful to their ability to recruit young worker talent.

These new Trump Republicans are the problem. They’re the ones who are bad for business:

The rift began under former president Donald Trump but was dramatically accelerated after the Jan. 6 Capitol riot and disagreements over a new Georgia voting rights law. Those disputes come on top of months of fights over other issues, such as climate change and transgender rights, in which parts of corporate America have tried to find separation from the conservative base.

GOP lawmakers such as Sen. Ted Cruz (R-Tex.) have pushed for revoking antitrust immunity for Major League Baseball – which moved the All-Star Game out of Georgia due to the voting law – and said “cancel culture” has infected elite business circles.

No, they just want to make money. Politico’s Zack Stanton nabs an interview about that:

The recent spat between leading Republicans and major corporations like Delta, Coca-Cola and Major League Baseball criticizing Georgia’s restrictive new voting law isn’t just about voting rights; it’s the sign of a deeper breakup that has been years in the making. For anyone confused about how Senate Republican Leader Mitch McConnell could admonish big companies to “stay out of politics,” after building a career on corporate donations and business-friendly policies, this deeper breakup tells the story.

Jeffrey Sonnenfeld, a legendary business professor and associate dean at the Yale School of Management, has watched this split grow in recent years, and has heard it from CEOs he knows and works with. What the GOP cares about and what major businesses care about are, increasingly incompatible, he says.

“The political desire to use wedge issues to divide – which used to be fringe in the GOP – has become mainstream,” Sonnenfeld says. “That is 100 percent at variance with what the business community wants. And that is a million times more important to them than how many dollars of taxes are paid here or there.”

Vengeance is sweet, and Republicans are now quite bad for business:

Sonnenfeld hastily organized a Zoom conference with roughly 100 major corporate executives to talk through the voter restrictions being considered by state legislatures throughout the country, and about the way top Republicans like McConnell and Ted Cruz are responding with attacks on businesses that speak up in opposition.

Most of the CEOs on the call were Republicans; Sonnenfeld himself has been an informal adviser to Republican and Democratic presidents, but he has a longstanding relationship with McConnell, and spoke at the senator’s wedding to Elaine Chao. The CEOs “ranged from amused to outraged” in their reaction to the GOP attacks on businesses, says Sonnenfeld.

But no reaction was positive:

As the GOP tries to position itself as the home of “working-class values,” capturing loyalty with a steady campaign against the perceived excesses of progressive culture, it’s running afoul of a business community that can’t simply silo off “culture war” topics. In the eyes of major corporations, issues like voting rights, immigration and transgender-inclusive restrooms have economic impact, too. The millions of people alienated by those fights aren’t just their future customers, many of whom expect to support brands they believe in, they’re the companies’ employees.

“The bad news for Republicans is that they seem to have a 1920s view of who Big Business’ workforce is,” says Sonnenfeld. “That workforce is, at a minimum, highly diverse – and they get along. Trying to stir that up is misguided.”

In fact, it’s stupid:

The new Republican penchant for mocking corporations for being too socially aware—for instance, Sen. Ted Cruz’s Twitter threat to use the power of the state to harm Major League Baseball’s business, signing the message off with “go woke, go broke” – fundamentally misunderstands what matters to business in the 21st century, says Sonnenfeld. “Basically, business leaders believe that it’s in the interest of society to have social harmony… Divisiveness in society is not in their interest, short term or long term.”

Sonnenfeld then adds this curious detail:

This November, for the first time in American history, major business leaders worked to guarantee millions of workers paid time off to vote. We’ve never had that before – and that’s a bypass around government, with its inability to make Election Day a national holiday. So they created their own workarounds. But on top of that, they were really proud that they managed to have – these particular companies – over a million workers with a full day off not only to vote, but to help fortify elderly voting-site volunteers who were at risk for Covid and had to handle the tidal wave of ballots.

They did so much, and they were so proud that this was the largest, fairest, most secure election in U.S. history. And to have the election condemned by Republicans after the companies put so much into ensuring that, they’re pretty upset.

But the real issue is this:

Basically, business leaders believe that it’s in the interest of society to have social harmony. The CEOs really care about these issues. Divisiveness in society is not in their interest – short term or long term. They don’t want angry communities; they don’t want fractious, finger-pointing workforces; they don’t want hostile customers; they don’t want confused and angry shareholders.

The political desire to use wedge issues to divide – which used to be fringe in the GOP – has become mainstream. State by state, party has taken that path. That is 100 percent at variance with what the business community wants. And that is a million times more important to them than how many dollars of taxes are paid here or there.

If corporate tax rates go from 34 percent to 27 percent instead of 22 percent, they’re way less concerned about that. There’s too much focus on taxes. On taxes, what we’re seeing is, in fact, CEOs are willing to concede. There’s a lot of ground there. You’ll get anywhere from JPMorgan Chase CEO Jamie Dimon and Bill Gates to Jeff Bezos saying, “We’ll give a couple of dollars on tax.”

In fact, that’s a minor matter:

They’re interested in free markets – whether or not that’s product markets, financial markets or labor markets. It’s about the image and reality of America: “Give us your tired, your poor, your huddled masses,” Emma Lazarus’ poem on the Statue of Liberty. That’s the spirit of it. But it’s also this: If the U.S. is not seen as a comfortable, attractive magnet for the world’s best talent, we’re in trouble. We don’t want all this technological expertise to be siphoned away to our trading partners, and that’s starting to happen.

That’s because of these new Republicans. Kevin Drum sees this:

In the past the business community stayed in its lane and didn’t worry much about the social conservative wing of the Republican Party. But now they feel like it’s out of control and bad for business. Like it or not, big corporations have mostly adopted the vaguely liberal “responsible citizen” attitude of the majority of Americans, namely that climate change is bad; diversity is good; mass killings are bad; immigration is good; trade wars are bad; trans people are good; and so forth. This is the corporate persona that they actively promote in their advertising, and they do it because their market research says this is what most people want.

And of course, perhaps most important, boycotts are bad. Corporations want to sell their stuff to everyone and not have to worry about either side going medieval on them because they’re forced to take public sides on issues they don’t truly care that much about.

And then there’s the matter of taxes:

Businesses, more than individuals, are keenly aware that they need high-quality infrastructure to survive. So they’re willing to pony up some new taxes because taxes are, to them, just a cost of doing business, not a holy war led by the ghost of Ronald Reagan.

This all makes sense but it is absolutely not a sign for Democrats to go hog wild in hopes that corporate America has abandoned the GOP for good. For one thing, businesses do still care about unions and regulations, and that’s going to keep them at arms distance from Democrats. What’s more, they haven’t suddenly become a bunch of Bernie bros. All they want is for Republicans to turn down the volume a bit.

In the end, they believe that a happy, contented consumer base is a consumer base that spends lots of money. So that’s what they want.

But that’s not what they’ve been getting:

Joe Biden may be a Democrat, but he seems very familiar to them in his guise of happy, contented Uncle Joe. By contrast, Tom Cotton and Josh Hawley and Tucker Carlson and others seem like they’re doing nothing but upsetting the apple cart over trivial crap like Dr. Seuss and trans bathrooms that no one would care about if they’d just shut up about it.

The big question, of course, is whether they’re willing to put their money where their mouths are and stop funding the party if it doesn’t calm down.

That day is here. The party isn’t going to calm down. The sixties are over. Republicans are the anti-corporation anti-business anti-capitalism angry anarchist radicals now. And they handed the country to Joe Biden. Paul Krugman sees this:

What’s the secret of Biden’s success?

Part of the answer, surely, is identity politics. Let’s be blunt here: The modern version of “only Nixon could go to China” may be “only an old white guy can sell a new New Deal.”

Another factor working in Biden’s favor is the closing of professional Republicans’ minds. Even before conspiracy theories took control, Republican politicians were living in a mental bubble; in many ways the modern GOP is more like a cult than a normal political party.

And at this point Republicans seem so deep in the cult that they’ve forgotten how to talk to outsiders. When they denounce every progressive idea as socialism, declare every center-left politician a Marxist, rant about “job creators” and insist on calling their rival the “Democrat Party,” they’re talking to themselves and persuading nobody.

In fact, that’s impossible now:

If you want to see Republican tone-deafness in action, look at Senator Marsha Blackburn’s recent attack on the jobs plan. It’s not really about infrastructure, she proclaimed; why, it would spend hundreds of billions on elder care. And she apparently imagined that voters would see helping the elderly as a bad thing.

Biden, then, benefits from having a nonthreatening persona and an opposition that has forgotten how to make persuasive policy arguments.

That’s okay. Everyone else will move on. Everything really did change.

About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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