Everybody’s talking about what I think of as a pretty pathetic New York Times article by Eduardo Porter, Business Losing Clout in a GOP Moving Right. Ed Kilgore notes, “Even if Corporate America does lose a few political battles, it is doing quite well in the war.” Jonathan Chait writes, Republicans and Business Are Getting Along Just Fine. And, as usual, Dean Baker calls it right that business doesn’t need to spend money on politicians since they already get pretty much everything they want.
I have a slightly different take on this. Or perhaps it is better to say that I have a deeper take, because they are all right. There is no fundamental economic difference between the two major political parties. They both believe above all that the business community should pull its pants down so that they can give it a great big smooch. The only real difference between the parties is that the Democrats want to keep more or less the current bad status quo and the Republicans want to make things even worse. All the business lobby cares about anyway is keeping taxes on the rich low and destroying all regulations. Democrats are pretty much on board with that and the Republicans are very much on board with all that.
This is all about the Overton Window. The economic debate in this country is pathetically limited and skewed ridiculously far to the right. Republicans now want to take our economy back to the Gilded Age and Democrats are too afraid to even consider Clinton era policies that were themselves far to the right. Or even worse. Obama wants to reduce the corporate tax rate from 35% to 28%. And the Republican proposal is to reduce it to 25%. Wow! Three percentage points is the difference between the Republican and Democratic positions. (Note: the effective corporate tax rate—what they actually pay—is about 15%. That is down from 50% in the 1951.)
And it isn’t like all of these policies are just theoretical the way social conservative policy is for those pushing it. Corporations are doing really well. As Dean Baker says, “After-tax corporate profits are at their highest level in the post-war period.” So what do they have to complain about? They have effectively co-opted both political parties and are getting almost everything that they desire. It seems only that Democrats are a little cheaper to buy than Republicans, thus the business community gives twice as much to Republican candidates as they do Democratic candidates.
There is one bad aspect of this for Republicans, however. Since Democrats are only marginally worse at pushing the business communities perceived interests (I think they are often wrong and don’t do what is best for their long term interests), the Republicans really could lose support from them if they did something stupid like make the government default by not raising the debt ceiling. That extra three percentage points of corporate taxes might be a small price to pay for the insurance of having politicians who aren’t bat shit crazy. From my perspective, it hardly matters. Whether Democrats or Republicans are in charge, we see the same thing (from Chait):