With so much money running around American politics, you’d think big business ran the show. Certainly, big money, thanks to the supreme court, is now operating more freely and secretly through the American political system and does influence the behavior of public decision-makers as they weigh constantly conflicting interests. However, time and time again, business leaders are cowed by Washington.
While elections cost $billions and the rich get richer, one hard fact about North American democracy remains true: the most successful business leaders make tough business decisions—but tough political decisions are always left to the politicians.
This should reassure democrats everywhere. However, in bracing times like these, business leaders who trek to Washington would be of greater service to their country if their advice was at least tough.
The Business Roundtable, an eminent assembly of a hundred or so titans from high tech, banking, manufacturing, entertainment, and retail industries that desperately depend on the restoration of America within the global system, sent twenty business leaders to Washington twice this month to lay out, in person, their recovery plan “Roadmap for Growth.”
It is an understatement to say that these men and women are nervous about the future. It is estimated that American business is sitting on well over one $trillion of profit that it has accumulated from sales and cost savings since the depths of the recession. The unwillingness of big business to get America going again through resurgent private investment is dramatically demonstrated in the numbers. The written advice the Roundtable has to Washington, however, doesn’t add much to the prospects of restoring confidence in America.
On the one big confidence test of the day—the long-term federal deficit—the Roundtable’s advice is all too rounded. Its take-away “ask” echoes the sunniest platitudes of the fall Republican electioneering:
“Fiscal Policy and Competitive Taxation: Redesign the corporate tax system to promote investment and strengthen US competitiveness in the international economy, and undertake significant reforms to reduce government spending before the American economy is swallowed by debt.”
Maybe, in private, they explained what that meant. We were told through the Wall St. Journal that their talks were “substantive.” Conceivably, they even accepted the broad logic of the majority report of the bipartisan Bowles-Simpson National Commission on Fiscal Responsibility and Reform: more tax money must be raised as well as saved.
In fact, it is impossible to believe that they and their brilliant in-house strategists don’t recognize that the US government is underfinanced. They also must know that a collapse in confidence in the US dollar—and souring interest rates caused by that collapse—would be catastrophic for their gigantic businesses.
Nevertheless, the president and congressional leaders don’t need private lessons on Economics 101 tutoring. What would more likely bolster their untested resolve to credibly address the fiscal problem would be public support for reforms to both sides of the fiscal challenge. Something pointed like this:
Mr. President, (1) develop a plan as broad as the Bowles-Simpson majority report; its compromises work for business and would be fair for Americans. (2) Tax rates for business and individuals can come down if we eliminate most business and individual tax deductions. (3) The best next step to encourage innovation and energy independence would be a comprehensive consumption tax, at least on carbon-based energy products, and, ideally, on goods and services generally.
Extremists aren’t the only people licensed to speak clearly. Business and civic leaders who ultimately defer to elected politicians to make the hard political decisions can be pointed in their advice, accepting that at the end of the day even compromised political decisions are what political leaders are good at.