Wednesday, February 15, 2006

Pro-Business Liberalism

Too many liberals are reluctant to embrace the pro-business label. Meanwhile, the DLC Joe Lieberman types are really corporatists who claim to be pro-business. This contradiction places the Democratic Party in a hole because our political dialogue doesn’t distinguish between those who are pro-business and corporatist. The distinction is important because the corporatist Republican Party has benefited from the perception that they are the pro-business party and the modest risk-taking entrepreneur has supported them against their own interests. Meanwhile, the Democrats are enduring the worst perceptions among voters from both wings of their party: liberals reluctance to identify with pro-business policies makes the party appear in favor of handouts while the DLC reinforces the suspicion among voters that the Democrats are just as corporatist as the Republicans. It’s an odd contradiction and a rare feat of political ineptitude: the two wings of the party have managed to make Democrats appear socialist and corporatist at the same time.

The genesis of this affliction occurred in the late eighties when Tony Cohelo, a ranking member in the Democrats House leadership aggressively courted major corporations. Cohelo had good intentions. He wanted the Democratic Party to be more competitive after having its clock cleaned by Ronald Reagan twice. Consequently, the Democrats lost touch with their populist roots as they wined and dined corporate CEOs for campaign cash. Those Democrats who opposed this trend were labeled “protectionist,” outside the mainstream, and opposed to entrepreneurial capitalism. Sadly, as the Democrats became less identified with economic populism, the Republicans were able to exploit cultural populism while small business owners were persuaded that Democrats were going to raise their taxes and impose stifling government regulation. As the party’s base soured on Democrats for supporting pro-corporatist NAFTA legislation, small business owners responded to Newt Gingrich’s rhetoric about reducing taxes and government regulation. In 1994 the Democrats base stayed home, small business owners rallied to Gingrich’s banner and the vital center imploded on the Democratic Party. Bill Clinton proceeded to fight a rearguard action from the White House and enjoyed remarkable success but the center of political gravity shifted to the Right anyway.

Bush’s failed policies however offer the Democrats an opportunity to be the party of small business and become the majority party again. For one thing, there is an emerging consensus among small and medium sized businesses about the cost of health care. Businesses of all sizes are hemorrhaging money because the increasing number of uninsured Americans is hiking premiums. In that environment a single payer system is an appealing alternative because it will lift a heavy financial burden from employers. Personally, I don't believe single payer health care in America is politically viable but government assuming more of the financial burden certainly is. Real health care reform can be sold to the business community as an economic stimulus package designed to liberate entrepreneurs to invest their profits into growth and development instead of keeping up with the rising cost of premiums.

Another way the Democrats can appeal to the business community is by revisiting the bankruptcy reform law that passed last year. The new law is actually damaging to the modest risk-taking entrepreneur because it takes away a potential safety net in case their business fails. Typically, small businesses are largely financed out of the entrepreneur’s pocket and if his business fails, declaring bankruptcy allows him to have a fresh start and take care of his family. Hence, DLC Democrats like Joe Biden, Harry Reid and Evan Bayh actually stifled job creation by supporting this legislation because it will make prospective entrepreneurs more risk adverse. Yet the new law allows large corporations such as Delta Airlines to declare bankruptcy and default on their pension obligations. That’s wrong morally as well as economically. Democrats should vigorously campaign on a platform to revisit the legislation. This can be sold to the business community as a safety net for the small entrepreneurs who create jobs.

One interesting perspective about running a small business is from a loyal Democrat named Damon Leavell. Mr. Leavell runs a public relations and marketing firm in New Jersey called Forrest Communications. Specifically, Mr. Leavell’s business services firms in the finance and technology industry. Recently, he vented to me about how the political culture doesn’t distinguish between pro corporatist policies and helping entrepreneurs like him:

“I agree with you that there is a huge difference. Pro-business shouldn't be an excuse to give huge pennies to huge businesses so they can get campaign donations. I run a small business. I'm always amazed by what the Republicans say they're doing to help small businesses. In fact, each year, I only see the things they are doing to hurt small businesses. I'll give you an example. For the early years of running a business, guys like me are hit with a double tax that you the employee avoids. When you pay social security, 6% is taken from your salary each year. When I pay social security, 12% is taken from my salary. And I can't write a penny of that off. That's a huge number when you're taking a hit in your salary and taking financial risks to run a business. I would like a pro-business politician to do something like this: Eliminate the double taxation up until the first $80k, but extend the maximum social security payment for upper income business owners, who are more able to pay an additional 6% when their business is a couple years old. But that'll never happen. I think that times have changed and our government will be bought and sold in the future. It's always happened, but never to the degree it's done now. But I don't know how it can be stopped. The very people who we elect to stop it benefit from it, and nobody seems willing to provide real public funding for candidates. I don't know what the solution is, other than to try to make as much money as we can so we can be the buyers of politicians instead of the other way around.”
Mr. Leavell’s desire for elimination of double taxation is quite sensible and one all liberals should embrace enthusiastically. If employers such as Mr. Leavell were relieved of this burden he would have greater incentive and flexibility to hire more employees. Unlike Republican supply side nonsense that give tax breaks to corporate CEOs earning seven figures, it makes more sense to help those entrepreneurs who are on the frontlines of job creation. I find it especially interesting that an entrepreneur such as Mr. Leavell actually supports public financing for candidates as well. Perhaps leveling the political playing field with a new campaign finance structure can be sold to the business community as a way of replacing crony capitalism with legitimate competition.

I am a liberal Democrat opposed to corporatism but strongly pro-business. Liberalism and pro-business sensibilities are not in conflict. They go hand and hand.


Tergenev said...

Hi there. As a progressive who also happens to be in an MBA program at the moment, I find your take on the issue of the relationship between the Democrats and business to be critical, and right on. I think the distinction you highlighted between corporatist and pro-business is accurate, and is precisely the place where the Democratic party lost its way in the early 90s.

The funny thing about the classmates I've met in the business school I attend (the University of South Florida) is how progressive they tend to be. I went into business school with the idea that I could be a hidden subversive force against corporatists. But I find that I'm not that uncommon. Those of us who are in mid-career and trying to progress in the business world seem to have a common thread of Democratic ideals running through us. There is a large disdain for the modern Republican party in most business school classes. (With the possible exceptions of classes heavy in Finance, Marketing and HR, which I also find odd.) Management, accounting, entrepreneurship, and most other business subdisciplines seem to have a larger progressive population than conservative. I think it has something to do with the fact that the 'corporatist' power structure of the current political parties is not inherently attractive to those of us who want to be our own bosses and want to stake our own claim to the American dream.

I request that you keep pushing this meme. It's important. said...

Just look at what Google, Microsoft, Cisco, and Yahoo did in China. What these countries did is horrendous, as word creeps ouut through America people are appalled.
Raymond B

Anonymous said...

Both Rob and "tergenev" are right on. As an old guy who's observed the scene for a few years, it doesn't surprise me that the finance, marketing and HR types tend Republican. Tergenev is into substance that creates general wealth, the modern Republican is into hype that gives him money and/or power. The modern Republican philosophy can be summed up in the phrase, "I've got mine, Jack, so screw you." It inspires confidence in the future to read that folks at a university in Florida would see through the greed and sham and strive for what is real and beneficial to others than themselves.

Mike said...

righttttttt. I think you are wrong, and whats more, you think you are wrong its apparent in your writing. Oh, and in case you were considering commenting on my site. Don’t, my wit and debate skills will crush you into oblivion.
God 1
sinners 0

Anonymous said...

Dear Elohim Maximus,

While Buckshot Rob may be crippled by your God's Jewish heritage. I, on the other hand, am not shackled by such handicaps. Douchebags abound on your website and mine, except I can spell.

The Dickel

Anonymous said...

Ya know...

Here again, I have to wonder at the gross incompetence of the Democrats. Why do they let the Republicans posture themselves as the pro-business party?

I run my own business (General Contractor) and I am paying a considerable price for the Republicans' dismal big money policies. It should be obvious that the only health the Republicans care about is the fiscal health of their Party. The insurance industry waves money in front of their snouts and the rest of us be damned.

Be thankful for the lawyers and doctors or health care would be far, far worse. As it is, the Relublicans allow the health insurance industry to freely veto the decisions of Doctors. Furthermore, the Republican legislature has indemnified the insurers against lawsuits as a result of their medical decisions. And that's the way the Republicans like it -- no checks or balances and lots of government intereference and regulations, as long as its Republican intereference and regulation. How many Americans are dying each year because insurers don't want to pay for necessary treatments? A recent story was just posted at Yahoo, describing a man who was allowed to die of liver cancer and the insured had *no* recourse. The bottom line in the Republican model of health care is not health but money. That is reprehensible.

Meanwhile, the a--holes in the legislature, Democrats and Republicans alike, are given, as a matter of course, universal health care simply by being "in the government". Like the former Senate Majority Leader of the Republican Party stated: "If you want universal health care, run for office." There is the government, that treats itself far differently from the people, and then their are the people.

Don't forget, our taxes our paying for the health care of Congress & the President. But those SOBs won't do the same for us.

As for myself, to employ two individuals for one year at a cost of 30,000, I have to pay over $7000 dollars in the form of a worker's comp TAX. If I were to add myself into the mix, the health TAX would come to almost 33% of my expenses. That's a hell of TAX on a start-up.

The privatized model of health insurance DOES NOT WORK. We either need a single payer system, one that allows businesses to compete fairly in a global economy, or we need a model like that being considered in Massachusetts.

In MA, every resident of the state would be required to have health insurance, much like car insurance. Every resident would be insured and the cost of health care would be evenly spread out which, in principle, would make the cost to individuals much less.

Instead, this country is being held hostage by a Party who puts themselves first and the country second, as usual. It is rife with corruption and ruled by the interests of the moneyed. (1.6 Billion was spent on George Bush's public relations, essentially for propaganda.) How many Americah lives could have been saved by 1.6 Billion? But that's not what's important. It's the Party that's important.

As a small business, I am forced to assiduously avoid hiring employees. I leave that to the Corporations, the Republicans' true constituency.

Ari F. Lauren said...

There is hope for '08. Check out this article:

Warner, Richardson try centrist tone for possible White House run
Associated Press
RALEIGH, N.C. - New Mexico Gov. Bill Richardson and former Virginia Gov. Mark Warner got a chance this week to try out some of the political themes that some observers believe could help them win over voters in solidly Republican states such as North Carolina should they make runs for the White House in 2008.

Richardson and Warner both came to the Emerging Issues Forum at North Carolina State University at the behest of former North Carolina Gov. Jim Hunt, himself a moderate Democrat who served a record four terms as his state's top executive.

Richardson described his approach of tax cuts, education and economic development the "New Progressivism."

"Now you're going to hear from a Democrat that is going to say this: cutting taxes is good, being pro-business is good. Putting more money in people's pockets is good," Richardson said.

Warner said voters don't want partisanship, but rather honesty that people may need to make some sacrifices for government to achieve fiscal responsibility.

"People are so anxious to hear the truth. A little bit of truth can go a long way in the American political process today," Warner said.

Their successes in their own states are worth sharing with the nation, some of their fellow forum participants said.

"Personally, I would like to see Richardson and Warner out there as opposed to the liberal faction of the Democratic Party," said Robert Peltz, 47, a Fayetteville businessman and unaffiliated voter. Peltz referred to Sen. Hilary Clinton, D-N.Y., a leading Democratic hopeful for the 2008 presidential race, as "a gift that keeps on giving for Republicans."

North Carolina's electoral votes last went to a Democrat in 1976 when Jimmy Carter won office. With the state's population estimated to grow 52 percent to 12.2 million by 2030, winning or losing North Carolina will become more important as its 15 electoral votes grow.

Warner had been on the pre-presidential circuit for months before he left office in January with the highest job-approval ratings for any Virginia governor since pollsters took such surveys.

Now out of a job, Warner has had more time to talk about how he helped turn a $6 billion budget shortfall into what could be a $1 billion surplus this year with tax cuts and tax increases approved with the help of a Republican-controlled Legislature.

"I don't think it's big government versus small government," he said. "It's smart government."

Warner told forum participants he hasn't decided about a 2008 presidential run, "but I sure as heck believe that there is a wide, sensible center in this country waiting for one party to reclaim."

"I think the Democratic Party serves itself and the country if it ends up with candidates and ideas that are competitive in the whole country, and not just 16 states and then tries to hit a triple bank shot to win Ohio and Florida," he said to applause from some in the crowd.

Richardson, a former Clinton administration energy secretary, has also been traveling around the nation as chairman of the Democratic Governors Association with a similar story of bipartisan budgeting success after working with members of both parties to cut personal income and capital gains tax rates.

Richardson pointed to coalition building with the business community, labor and others as reasons for the state's recent success and a projected half-billion-dollar surplus this year.

"Democrats have to be more pro-economic growth.... We shouldn't be reflexively against cutting taxes," he said in an interview. "We should be a party that embraces competitiveness and economic growth."

Both governors also promote improving education by linking more spending to higher levels of accountability in the public schools.

But several participants at the Raleigh forum said the governors - particularly Warner - offer alternatives to candidates who may be considered established Washington insiders.

"He was able to being various groups together, which is something that this country needs," Sandy Sands, a legislative lobbyist and former Democratic state lawmaker, said after Warner's speech.

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