The right’s anti-business turn
Major League Baseball’s decision to move its All-Star Game from Atlanta, Georgia, in the wake of changes to state voting laws probably won’t be the Peach State’s most serious piece of economic fallout from the law. Indeed, the millions of dollars in economic impact from a single event’s cancelation pales in comparison to the potential of a multi-billion-dollar fallout from a near-universal big business rejection of the law.
Republican politicians everywhere should consider this a stark warning. A party that started by supporting textile factories and railroad kings against the South’s slave economy, boosted the auto industry about a century later with the interstate highway system and helped create Silicon Valley through a combination of technology/defense subsidies and a hands-off regulatory attitude, has largely discarded the pro-business approach that long differentiated it from the Democratic Party. This rupture has resulted from changing party demographics and growing business scale and may well be permanent, which could prove disastrous for the health of our country.
Consider the facts in Georgia: Home Depot, the biggest company with headquarters in the state, initially criticized the law, as did the state’s best-known brand, Coca-Cola. Moreover, 200 large companies joined together with large retail employers like Wal-Mart and household names like Hewlett-Packard to come out against it. These big companies are the lifeblood of the American economy. They employ millions of Americans, allow the nation to compete on the global stage, are better places to work than their smaller counterparts and, contrary to popular belief, create most new jobs. A prosperous economy depends on them.
Scanning the top 20 places on the Fortune 500 list: Five are held by the Big Tech companies that former President Trump made his chief enemies, six by large health care companies that benefit from the ObamaCare law nearly every Republican claims to hate, and six by retail or financial services giants that rely heavily on global markets, which the party’s new anti-trade orthodoxy rejects (one of which is also Big Tech).
Even companies that the last half-decade of Republican policymaking have tried to help are unhappy. For example, energy giant ExxonMobil, American’s third-largest company, supports the Paris climate change agreement that Trump rejected and a carbon tax to reduce the greenhouse gas emissions Trump has said aren’t a problem.
These companies are making business decisions about the future of our country and watching politicians reject everything they have worked decades to build together.
The Republican Party’s changing demographics in the Trump era explains much of this disconnect. Efforts to create the “workers’ party” that Trump and current Republican Study Committee head Rep. Jim Banks (R-Ind.) have called for implies a rejection of many things favored by the Americans who own, invest in and work at big companies. For example, while free trade benefits most everyone, only big global-trading businesses and people with comfortable, mid-level incomes (i.e. enough money, but no great wealth) experience benefits across the board. Similarly, while less-skilled workers benefit the most, they are also the most likely to lose their jobs as markets open. Efforts to combat the globe’s biggest environmental problem, greenhouse gas emissions, by making fossil fuels costlier have minimal pocketbook impact for urban families and offer new business opportunities for many big companies but will meaningfully reduce disposable income in less populated, heavily Republican, rural areas, where per-capita energy use is higher.
Growing corporate scale at the top end also has an impact. From a strictly dollars and cents standpoint, huge companies that want to serve everyone have every reason to embrace ethnic diversity, gender equality, LGBTQ+ rights and high levels of immigration: all things that many in the Republican Party hold in contempt. While a regional department store that serves a narrow demographic might well find that refusing to serve LGBTQ+ consumers doesn’t create a meaningful change in its bottom line, pervasive, national retailers such as Amazon, Target, Kroger and CVS would see shareholder revolts if they didn’t make every reasonable effort to reach a 15-million-person demographic. Likewise, this also explains why the restrictions in the Georgia voting law – which were opposed by many Black-led civil rights organizations – bothered so many companies. While many may have taken a stand simply because they felt it was right, they also had reasonable fears of losing 42 million customers if they did not speak out.
Above all else, business’ rejection of so many key Republican priorities in Georgia and elsewhere shows that the party has given up standing for the most successful, entrepreneurial segments of America and, instead, is throwing its lot in with a downscale, anti-business demographic. The political and even economic price of this course of action may well turn out to be quite high for the party and, eventually, the nation.
Eli Lehrer is the president of the R Street Institute.