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Wednesday, December 7, 2022

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History tells us not to be surprised to see the GOP attacking business



A dystopian novelist could have imagined a governor attacking the most famous corporation in his own state, but what novelist would have made that governor a Republican? And yet it’s the Republican governor of Florida, Ron DeSantis, who launched a war with Disney. Since he began to speak out against the company last year, Disney stock has nosedived, and other corporations in Florida are afraid. It’s only one example of Republican politicians recently threatening major corporations, including Coca-Cola and Microsoft and, now, the U.S. Chamber of Commerce. Republican voters, too, are suddenly sounding like Bernie Sanders leftists, complaining about the power of large corporations.

Is this the party that once thought corporations were people?

In truth, the Republican love affair with corporations has always been more situational and malleable than it appeared. Rather than consistently being the party of business, the GOP’s support for the business lobby’s preferred policies has ebbed and flowed depending on where Republican politicians sensed their base to be. The GOP cares far more about currying favor with Republican voters than businesses, and we seriously misunderstand the historical moment if we overestimate the power of corporations and the wealthy in American politics.

In the very beginning, the Republicans were the egalitarians. In 1858, it was James Henry Hammond, a South Carolina Democrat, who argued that “In all social systems there must be a class to do the menial duties, to perform the drudgery of life.” Hammond referred to this class as “the very mudsill of society,” comparing it to the base upon which a building is constructed. This summarized the thinking of many Democrats at the time. By contrast, the vision of the new Republican Party that attracted people like Abraham Lincoln advocated for economic mobility for anyone capable of hard work (or at least any White man).

But instead of sticking to that vision, and expanding it to be more inclusive after the Civil War, the Republicans succumbed to a relentless historical logic. Because they were the party against slavery, that made the GOP the party of the North, and if it was the party of the North, then Republicans had to protect the interests of northern constituencies.

After the Civil War that meant protecting the northern economy, based in manufacturing and business, over the southern economy, based in agriculture. That drove the GOP to support a high protective tariff, among other policies, to safeguard business interests at the expense of farmers and workers. During the Progressive Era, the party fractured into a wing led by Theodore Roosevelt, which favored an expansive role for government, and a conservative wing, which opposed the policies that would have helped to bring about the GOP’s early egalitarian vision, such as regulating industrial firms and limiting working hours.

Sometimes Midwestern Republicans sided with Democrats, which led to, among other outcomes, passage of the progressive income tax.

But a faction of the Republican Party was increasingly siding with business and developing a free-market vision at odds with Lincoln-style egalitarianism. Roosevelt’s loss to William Howard Taft at the 1912 Republican National Convention signaled the rise of the free market vision within the party.

That vision, however, was not so popular with voters, and the movement of Republicans to the right created a wide-open space for Democrats. In the 1930s and 1940s, Franklin D. Roosevelt grabbed that space so decisively — regulating corporations, expanding agricultural relief, implementing social programs for the unemployed and the aged, even winning over Black voters who had been loyal to the party of Lincoln since the Civil War — that Republicans were locked out of control of Congress for decades.

Now that Democrats owned the issue of government spending, the Republicans wandered the desert for 40 years, trying one trick after another to win back voters and solve their “minority problem.” Anti-communism? Better political organization? A charismatic leader? Or doubling down on pro-business policies and rhetoric? Different factions suggested different solutions, and the split between the pro-business faction and the moderate faction widened, with Dwight D. Eisenhower managing to keep the moderates in control during the 1950s. The pro-business wing never went away, but it was sidelined.

Only in the late 1970s did the fortunes of the pro-business faction revive, when inflation made tax cuts much more appealing to the public than they had ever been before. The party discovered that for once, the more market friendly faction of the party had become electable. But this was not a movement for corporations, or by corporations. In fact, President Ronald Reagan had to convince big business to support his seminal 1981 tax cuts. Business leaders, like many people, were afraid of the deficits big tax cuts would cause.

But Reagan knew which lines in his speeches got the most applause. He could feel where the political energy was, and it did not take much for a band of Republicans to convince him that big tax cuts should be the centerpiece of his agenda. He was not doing it to appeal to the wealthy — almost forgotten now is that cutting the top tax rate was a proposal Democrats introduced, not Republicans. Reagan’s tax cuts were a populist measure, not a plutocratic one. Reagan and his collaborators in Congress did eventually add tax cuts for business to the bill, as a way to get business lobbies onboard; but then, when the deficit exploded, they backtracked and clawed back much of those business tax cuts.

In the 2000s, President George W. Bush — who had witnessed his father lose reelection after agreeing to a tax increase — also supported tax cuts. Bush’s tax cuts were more oriented to the wealthy and business, and he also pursued other policies favorable to business, including regulatory changes that cemented the image of the GOP as the party of business.

Yet that image always obscured the reality — Bush’s tax cuts were very popular with voters across-the-board. In fact, partly because of those tax cuts, Bush emerged in one well-known analysis as the president whose policies most closely matched public preferences, including the preferences of the poor. Like Reagan, Bush was adopting policies that were popular with the Republican base. Indeed, when Bush agreed to a bipartisan immigration bill that corporations favored, but the right hated, it was the businesses that lost.

President Donald Trump’s signature policy achievement was also a tax cut biased toward corporations and the wealthy — the clearest win for corporations over the last decades of Republican control. But for the first time, the Republican base was not convinced about tax cuts. In fact, Republicans have pursued tax cuts so vigorously for four decades that the issue has lost its force even with Republican voters. Taxes are much lower than they were in the 1970s or 1980s — especially for taxpayers in the bottom 80 percent of the income distribution — making it hard to get voters worked up about high taxes. The Trump tax cut was an exhausted last gasp, implemented because little else could unify Republicans enough to pass Congress.

Viewing recent Republican history through the lens of populism — rather than Republican fealty to corporations — helps to make sense of where things are going. The issue that bound the Republican coalition together for decades, tax cuts, has lost its potency, sending Republicans off on a chase for new issues with which to energize their base. They’ve even resorted to actively courting their most extreme supporters for electoral purposes.

This is why it should not be a surprise that Republicans are suddenly attacking “woke” corporations. The heart of the Republican resurgence of recent decades has not been about the power of corporations or the wealthy, it has been about finding and mobilizing the energy of the base. Corporations are not behind the opposition to critical race theory, and the wealthy have no coherent position on school closures or vaccinations or transgender policy. Corporations are not in control, and never really were.

Does this mean a bipartisan approach to reining in corporations might be possible? If Republican voters and politicians are turning against corporations, for whatever reasons, could a Ron [DeSantis] and Bernie [Sanders] coalition be imaginable?

Probably not. There is still a healthy libertarian wing of the Republican Party, and theatrical attacks against corporations that embrace liberal cultural stances are different from fundamental changes in public policy. But the parties have changed before, and they could change again.

As Republicans increasingly become the party of the White working-class, it’s not impossible to think that a Republican politician who combines “anti-woke” gestures with substantive policies to make working-class lives better could electrify voters. Stranger things have happened in American history.



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