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The Dwindling Republican Business Base: It's the Economy, Stupid


Friday, Jan. 25, 2008

As the stock market gyrated wildly this week, given the precarious state of the American economy, the New York Times published a table relating to anti-recession efforts in times past. In scanning it, I could not help but notice that among the last eight recessions, all but the first, in 1948, occurred during Republican presidencies. (The first occurred when Republicans controlled Congress.)

Here are the recessions and their Republican presidents: August 1957 to April 1958 (Eisenhower), April 1960 to February 1961 (Eisenhower), December 1969 to November 1970 (Nixon), November 1973 to March 1975 (Nixon and Ford), July 1981 to November 1982 (Reagan), July 1990 to March 1991 (Reagan), and March 2001 to November 2001 (Bush II).

As we all have watched the stock market this week, thoughts of past major crashes have no doubt popped into the minds of many. Republican presidents oversaw them. Herbert Hoover, of course, was president when the great crash of 1929 occurred, and Ronald Reagan was president with the most recent serious crash - Black Monday in 1987.

The Republican Party has long been the favorite of the business world. But when one steps back to look at the facts objectively - as business leaders who want to remain in business must do, and now seem to be doing - the question must be asked: Is a Republican bias actually good business?

Which Political Party Is Better For Business?

Which political party is actually best for business? To pose the question is easy. However, to answer it objectively and honestly is not possible, for all business is not the same and the answer depends upon what kind of business one might be addressing.

For example, hedge fund managers, who have walked away with billions in untaxed profits under Republican tax policies unavailable to other people, love the GOP. CEOs with humongous salaries and endless stock options also love the current Republican attitude of demanding tax breaks for the very rich. Big businesses with high- powered lobbyists in Washington on their payrolls to protect their interests find Republicans far friendlier to their concerns than they do Democrats. These people, of course, are among that less than one percent of Americans who have profited so gloriously under the Bush-Cheney economic policies.

Mid-sized and small businesses - which are the overwhelming majority of businesses in the United States - have, until lately, thought that they were better off under Republicans, but they are wrong. They are just now remembering that when recessions come, they are easily wiped out, while big businesses merely make less money and often take advantage of the downturn. These people are the upper middle class and middle class of America - the people that the Republicans are slowly bleeding into non-existence, until there will be no middle class, only rich and poor.

Fortunately, increasing numbers of all levels of business people are realizing the economic incompetence of Republicans, and their protection of the super-rich is, in the long term, bad business for everyone. Accordingly, growing numbers of voters have come to the conclusion that Republicans are not good for business. "GOP Is Losing Grip On Core Business Vote," an above-the-fold headline of the Wall Street Journal screamed last fall.

Some Specific Reasons Businesspeople Are Leaving the GOP

According to a number of business publication, there are several reasons for the "elephant stampede" - to use the Wall Street Journal's term. Broadly described, the disenchantment of business leaders with the GOP falls into several categories, which I have set forth without trying to rank them:

The War In Iraq. Just as many other Americans find the war in Iraq an unqualified disaster, businesspeople tell reporters that they do not like the lies Bush and Cheney told, to take us into a war that will likely only create more terrorists hating America. Like many others, they see this as dangerous folly. In addition, the war has been a fiscal disaster, with billions thrown away and no accounting whatsoever. As a retired Westinghouse manager and lifelong Republican told the Wall Street Journal, "'We've lost control of spending,' and the administration's execution of the Iraq war has been 'incompetent.'" Businesspeople have little tolerance for incompetence; only true ideologues can over look it.

Excessive Deficit Spending. Former chairman of the Federal Reserve Alan Greenspan is a very high-profile Republican in the business and finance communities. Greenspan told the Journal, "The Republican Party, which ruled the House, the Senate and the presidency, I no longer recognize." Similarly, New York City Mayor and billionaire businessman Michael Bloomberg recently left the GOP, complaining - as reported by the Journal - that "conservative politicians in the U.S. [are] guilty of 'lunacy' for running up deficits for future taxpayers to pay." The GOP's gigantic deficits have also weakened the dollar, making business for many much more expensive.

Focus On Social Issues. Countless businessmen I know tell me they are exhausted with the Republicans' focus on abortion, gay marriage, and the host of social issues the party insists on putting on the front burner. Business journals have similar reports. This is not surprising, for all polls show that for most Americans, these are not the centrally important issues.

Immigration Policy. Business Week has reported that as the Republican presidential candidates have increased their who-can-talk-the-toughest-on-immigration efforts, they are also losing support in the business community. Business Week pointed out that "in industries like agriculture, construction, landscaping, and restaurants, most employers want comprehensive immigration reform that allows undocumented workers to join a guest worker program or pursue a path to citizenship, as well as an effective way for new immigrants to work in the U.S." With the exception of John McCain, all the GOP presidential candidates start their day with a hefty dose of xenophobia.

Health Care Policy. Many industries want the federal and state governments to address the soaring cost of health care. Not only do they need healthy workers, but health care costs are narrowing profits. Few savvy businesspeople think well of the Republican health care plans, which make health care providers and insurance companies richer at the expense of everyone else.

Environmental Responsibility. American business is the leading polluter in America, and for years business has rebelled against efforts to regulate the damage it causes to the environment. Even now the pre-Enlightenment attitude of certain conservative Republicans toward science has enabled them to actually believe that global warming is merely a hoax. Yet more sophisticated businesspeople understand they must clean up their acts. Many know that short-term gains are leading to long-term and potential irreversible damage. Accordingly, outside the auto and fossil-fuel-related industries, businesspeople are increasingly disgusted with the failure of recent Republican Administrations (Reagan, Bush I and Bush II) to develop a realistic, responsible and comprehensive environmental policy.

Republicans Have Proven Themselves Bad For a Good Economy

Business, however, is only part of a broader picture for it operates - as do we all - within the American economy. Thus, there is an more fundamental question: Which political party is best for the American economy, and why?

That will be the subject of Part II of this look at the future implications of further Republican rule. Frankly, I was surprised at what I found.

John W. Dean, a FindLaw columnist, is a former counsel to the president.

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