Wednesday, October 29, 2008

Corporations, Republicans and Democrats

Newsweek asks why corporations still love Republicans? The author, Daniel Gross, examines some articles from the Wall Street Journal and comes away convinced that corporations don't know what's good for them.

He starts with unions.

Big retailers such as Home Depot, Wal-Mart, and Target, the Journal reports, are freaked out that Obama and a Democratic Congress would pass the Employee Free Choice Act, "which would do away with secret balloting and allow unions to form if a majority of employees sign cards favoring unionization.

and goes on to describe all of the problems facing these corporations besides unions. All of his points may be true, but unions seldom help large corporations. Look at the automotive industry. The unionized American companies are failing. The non-unionized foreign companies are still solvent. GM has not been able to compete for years because of the overhead of union pensions. When you buy a car from GM, a greater percentage goes to the union pension than to pay for the steel in the car.

Later Gross tosses out this statement:
Once again, the past 16 years provide a great controlled experiment: eight years of a Democratic regime that was comparatively pro-labor, higher tax, pro-regulation and anti-free trade, followed by eight years of a Republican regime that was comparatively anti-labor, decidedly low tax and anti-regulation, and pro-free trade.

I have serious problems with this assertion, especially the part about trade. Clinton went against his party to pass the pro-trade NAFTA. His main flirtation with higher taxes was during his first two years. Once the Republicans took over after the election of 1994, Clinton practiced "triangulation". He moderated his policies. He also signed a major bank deregulation bill.

This is, in fact, a major problem with Gross's argument. He equates Clinton and Obama as having the same policies because they are Democrats. In fact, Clinton was much closer to Bush on most economic policies.

Obama is running an anti-trade and anti-corporate campaign. He promises to raise taxes on corporations and capitol gains (the rise in the value of your stock). He promises to tax excess profits (decided by him) and "return them to the people". He is against globalism in general.

But that's only Obama. consider the Democrats in general. Big box stores in general and Walmart in particular are hated by a large number of people, all of them on the left. There have been several local initiatives that would outlaw big box stores in specific cities. There have been attempts at putting them at a competitive disadvantage. There have been numerous boycotts.

Why would these corporations ever trust a party that hates them?

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