Two weeks after a mid-term election in which the U.S. Chamber of Commerce helped thwart Barack Obama and the Democrats, the group’s CEO, Tom Donohue, gave a speech that read like a doubling down of sorts. “We cannot allow this nation to move from a government of the people to a government of the regulators,”he said. “Regulation is the vehicle by which some seek to control our economy, our businesses, and our lives.” Nor did Donohue leave any doubt about how he intended to prosecute this fight: “The Chamber will mount a vigorous defense and aggressive offense in support of the right to lobby, communicate with voters … and to do so without government harassment or undue restriction.” In other words, Donohue plans to spend gobs more money on lobbyists and ads to undermine Obama.
But, if you look at what Donohue had to say in a less scripted moment, it’s not clear that he and the Chamber feel quite as triumphal as they’d have you believe. Asked about Republicans’ mounting criticism of the Federal Reserve, Donohue sounded positively frustrated. “The Fed has over many, many, many years been particularly helpful to this government and to this country,” he lectured reporters. “We must maintain the independence of the Fed and be very, very careful not to louse that up on Capitol Hill.”
Oops! Having spent tens of millions of dollars defeating Democrats while explicitly touting the Tea Party movement, the Chamber is waking up to the fact that its brand new Congress may be a touch better in theory than in practice. Not only are many recently elected GOPers hostile to the Fed, they also oppose infrastructure spending, corporate subsidies, expanded free trade, and pretty much anything Wall Street favors—all top Chamber priorities.
Which is why the White House shouldn’t be in an especially conciliatory mood when dealing with the Chamber and its allies. Big business may talk a good game these days. But, in a world where the Tea Parties are about to get the keys to the Capitol, Corporate America needs adults like Barack Obama much more than he needs it.
Any article that takes the time to rip Amity Shlaes, minister of information for the country-club-industrial-complex (Noam's words...I only wish they were mine), is okay by me.
It continues on to the key graphs:
If you parse Tom Donohue’s speech, the administration should be sufficiently cowed after the midterms to retreat from key pieces of health care reform, financial reform, and greenhouse-gas regulation in exchange for business support on other issues. Business also wants to extend all the Bush tax cuts and preserve the tax advantage for overseas profits, which the White House opposes.
But it’s actually the administration that now holds the cards. For one thing, the regulations the Chamber is most exercised about also happen to be the most popular. The big banks hate the new consumer financial products agency, but the public strongly supports it. The insurance companies hate not being able to deny coverage to people with pre-existing conditions; the public can’t wait for that provision to take effect. The Chamber would be foolish to go to war over these issues.
More importantly, corporations are suddenly in a much more precarious position than they were prior to the election. That may be counterintuitive given the Republican gains. But, while it’s tempting to assume that the interests of business overlap perfectly with the interests of the Republican Party, that’s simply not the case. The GOP wants to defeat Democrats at all costs. Big business has to make a more sophisticated calculation: It wants to defeat Democrats, since GOP rule typically means lower taxes and fewer regulations. But, unlike the GOP, the shorter-term costs of achieving this goal matter quite a bit to Corporate America. Republicans might accept a double-dip recession as the price of vanquishing Democrats. But, to most corporate managers, such profit-destroying horrors outweigh the benefits of GOP rule.
For that matter, even GOP rule itself doesn’t look nearly as appealing in the Tea Party era. In addition to opposing big business on some of its top priorities, like infrastructure spending and immigration reform, Tea Party pols are prone to dangerous games of brinkmanship. For example, many are drawing a line on raising the nation’s debt limit, which could create a fiscal crisis, leading to a collapse of the dollar and a surge in interest rates.
During the mid-term campaign, the Chamber breezily dismissed such worries by insisting the Tea Partiers would shed their most extreme positions once in office. "Some of the politics of the Tea Party and legislative practicalities just don't match up," the group’s political director, Bill Miller, told Bloomberg Businessweek in October. But the reality is that the GOP is much more likely to move toward the Tea Party movement than vice versa. That’s because the power of the movement is structural: It has less to do with individual office-holders than with the constant threat of primary challenges against Republicans who drift too far to the center, as occurred this year in Utah, Alaska, Florida, and Delaware.
All of which makes the business community’s greatest source of leverage over Democrats—the threat of ousting them on Election Day—significantly less credible. The more Democrats that Big Business takes out, the closer it comes to consolidating power for the Tea Parties and all the nightmares that entails. If that wasn’t apparent before November 2, it’s almost inescapable now.
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