Competent and credible leadership in a crisis is also important. As well as the opportunity to hire needed talent.
Under Donald Trump, the GOP failed on all of these goals. The party lost corporate support and relations with key allies such as the US Chamber of Commerce publicly deteriorated.
Catherine Rampell: This Republican U-turn Is So Much Worse Than ‘Cancel Culture’
The Democrats could have benefited from that. They could have stepped in and presented an alternative economic vision – one that is pro-growth but based less on tax cuts and more on the rule of law and fairness. They could have worked with the private sector when the goals were aligned.
Instead, Democratic officials decided they also wanted to be enemies of the private sector.
This election appears to be driven partly by ideology and partly by short-term political considerations. After all, Democratic and Republican survey participants now take a very negative view of “big business”.
Additionally, Democratic policymakers have been looking for ways to distract from their own fiscal missteps that likely contributed to inflation. The most useful scapegoat – the only one that, according to polls, is their base beautiful eager to defame – is big business.
And so, after months of denying inflation was a problem, Democrats agreed on a new message: Inflation was real, but it wasn’t being driven by red-hot demand outstripping still-constrained supply. Rather, it was caused by “corporate greed,” “usury,” “price gouging,” and other vague allegations of corporate wrongdoing. (Also: Vladimir Putin.)
This anti-corporate babble has been proven both factually incorrect and a strategic misstep. It cost Democrats a valuable political partner heading into the midterm when the fate of democracy itself could be at stake. It has also hampered Democrats’ ability to respond to the great economic challenge of our time.
Perceiving inflation as being driven by “corporate greed” prevented them from taking many good measures that might marginally ease price pressures. Especially approaches that could be considered too “industry friendly”.
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This includes, for example, what is actually slowing down oil production.
Ramping up drilling and refining requires large, expensive investments that companies fear won’t pay off when (if) oil demand eventually falls again. Many companies went bust in 2020 when oil prices briefly turned negative. The long-term prospects for fossil fuels are not good. One solution could be to insure companies against some “downside risk”. For example, the government could guarantee a certain minimum level of future prices or profits.
But that would be politically toxic. How can Democrats guarantee profit levels when they’ve convinced their constituents that these greedy corporations are beautiful “Usury”? Progressives have effectively locked themselves in.
Meanwhile, Democrats’ obsession with the performative punishment of big business has given a boost Poorly Suggestions that could make inflation worse. These include price controls penalty taxes preventing further production.
Or, to stay with the energy example: the Biden administration threatened to do so withdraw Drill permits not currently in use – a punitive “use it or lose it” policy. However, each permit is for a specific site operated by a specific company that owns the lease for that area. In other words, if a permit to drill at a particular location is revoked, nobody different can also drill there.
The existing permit holder may not be drilling at this location now to see how nearby wells are performing, or may be awaiting equipment held up due to supply chain issues. In the meantime, if the unused permit is cancelled, “the operator has to apply for the permit again, which is a time-consuming affair,” explains Rene Santos, energy analyst at S&P Global Commodity Insights.
Which means that this approach would be likely to reduce Oil output, do not increase. Biden officials would know that by now if they actually spoke to people in the energy industry, which they seem reluctant to do.
Dem’s distrust of the industry is understandable. After all, companies misbehave. The corporate lobby is likely to always exaggerate how much regulation harms its members, while always downplaying any negative externalities it causes.
But the choice is not to take everything leaders say at face value or to intimidate them at every opportunity. Another option is to talk to industry and find out how these companies actually work and what changes in incentives could help achieve broader economic goals.
Unfortunately, Democrats are so eager to prove their anti-big business authenticity – and so afraid of being tarred as “corporate shills” – even that seems like too much to ask.