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Catherine Rampell: Democrats have a chance to be the party of economic growth

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With Republicans openly warring with the business community, Democrats have a once-in-a-generation opportunity to rebrand themselves as the party of economic growth and opportunity.

Here’s hoping they don’t blow it.

Republicans have long assumed that tax cuts alone would guarantee the undying loyalty of businesses large and small. But companies care about other things, too. They want to keep their customers and workers happy. They want a stable regulatory and political environment, with the rule of law rather than rule of the would-be tyrant. They want a skilled labor force, calm capital markets and the ability to engage in trade.

They also care about getting the spread of COVID-19 under control. The pandemic remains the main obstacle to getting customers and workers through their doors again, and the economy back on track.

Over time, the GOP has abandoned or actively obstructed all of those objectives.

Arguably most damaging are policies and rhetoric that increase coronavirus infections. High-level Republicans have undermined confidence in vaccines, banned private businesses’ own inoculation requirements and fought other measures that might curb the virus, though it is both killing people and slowing job growth.

Republicans have destabilized economic conditions in other ways.

They’re responsible for dramatically slashing legal immigration — both during the pandemic and for several years prior. This has made it harder for industries as varied as tech and seafood processing to hire the workers they need to continue operating (or grow).

Republicans are also responsible for costly trade wars that have raised prices for businesses and closed off market access. Despite a stated commitment to deregulation, the Trump administration raised many regulatory burdens and created enormous regulatory uncertainty. This was in no small part because President Donald Trump frequently used state power to punish companies he perceived as political enemies. Elsewhere, his administration cut so many corners when changing regulations that its policies usually got thrown out in court.

More recently, Republicans have again brought the federal government to the brink of default by blocking Democratic votes to suspend the statutory debt limit. A default would be catastrophic for financial markets and the economy. Yes, Republicans agreed this week to temporarily allow the government to continue paying its bills — but they’ve also signaled plans to take the debt limit hostage again in December.

Given all this, it’s hard for GOP officials to continue calling themselves “pro-business” or “pro-growth” with a straight face. Maybe they don’t care. As their base has become more populist and skeptical of “big business,” Republican politicians have embraced that antipathy in their rhetoric.

GOP officials talk less about economic optimism and more about cultural grievance. They’re no longer the party of the supposedly overtaxed small-business owner trying to catch a break; they’re the party of the unhinged mob screaming at that overtaxed small-business owner, because he asked customers to wear masks.

Meanwhile, relations between GOP party leaders and business leaders have frayed.

The U.S. Chamber of Commerce, for decades a close GOP ally, last year endorsed 23 freshman House Democrats. More recently, the Chamber was booted off strategy calls with House Republican leadership, according to Punchbowl News. House Minority Leader Kevin McCarthy, R-Calif., suggested this week that the Chamber will have no influence if Republicans take the majority, Punchbowl also reported.

When asked about reported frictions with Republican leaders, a Chamber spokesperson replied: “We expect criticism when we work with Republicans who are aligned with us on key issues, and when we work with Democrats for the same reason. No member of Congress has a right to our support — they have to earn it and re-earn it.”

So now Democrats have an opportunity to exploit this possible realignment — or what American Enterprise Institute fellow Michael R. Strain has called a political “portfolio rebalancing” by business groups.

To be sure, the business lobby despises much of Democrats’ agenda. Especially the tax hikes. But many of Democrats’ supposedly bleeding-heart policies — child care, paid leave, worker retraining, high-quality pre-K, increased legal immigration — are pro-growth. They would create a more skilled, resilient and productive workforce.

In fact, some version of most of these initiatives has already been endorsed by business groups including the Chamber and Business Roundtable.

If Democrats are strategic, they could win over more than labor and the working class with their economic vision. They could bring powerful private-sector allies into their coalition and use that broader alliance to get their pro-growth programs enacted.

It’s not clear whether Democrats have appetite for this, though.

President Joe Biden has rejected some low-hanging fruit. He has kept Trump-era metal tariffs on U.S. allies in place, for instance.

And while Biden has repeatedly said that he’s not out to “punish” anyone, corporations included, the more populist members of his party prefer a punitive framing — on taxes, antitrust and other issues. Helping working families requires penalizing Big Bad Businesses, in this zero-sum view.

Dividing the economic pie more fairly matters. But so does growing the pie. Democrats must seize this moment to sell their vision for both.