“Death of the Machine” – Krugman – 10/19/07

Friday's NYT has Krugman discussing corporate campaign financing via K Street.The ability of the Republican Party to raise significantly more funds, especially from the business community, has been considered a given over the last few election cycles. The methods of Rove and elected Republicans, such as Santorum, to garner a permanent majority were predicated on the ability to grossly outspend opponents in elections. The current election cycle is strongly challenging this given, as Democrats are receiving more funds from each of the top ten industries in America. The question at the core of this issue is why is corporate America abandoning the GOP at this rate? The easy answer is political calculus. This argument holds that businesses know how to read the signs of an impending bomb of an election for the GOP in 2008. With 22 of the 34 contested Senate seats held by Republicans, a wave of GOP retirements in the House, and a lackluster presidential field the corporate world is quite simply hedging on the likelihood of a unified Democratic government for the first time since 1993. This calculus, along with the business community getting tired of seemingly being held hostage by the Republican Party, are two of the likely reasons for the funding shift.

Another possible cause of the growing gulf between business and the GOP is the lack of competency by the current administration. Though it is hard to argue that Bush has been unfriendly to business, his actions and policies have not exactly been the most conducive to growth and stability in the national and world economy. Disruption, volatility, and incoherent policies are bad for business, and the current administration has had no shortage of any of the three.

I would add two additional reasons for this growing disaffection between GOP and business. The first is that as the GOP maintains its intimate relationship with social conservative organizations and groups, the business community is forced to recognize that the GOP isn’t always with them – but occasionally must pander to the vote base. A singular example of this issue is the public financing of research facilities for stem cells – here in Madison the business community is very receptive to the idea, while the religious organizations are vehemently opposed. The final reason, and most disturbing, that I can come up with regards to business money flowing to the Dems instead of the GOP, is that the Democratic National Committee and the presidential candidates are viewed as in the pocket of big business.

Krugman, I think, would disagree with this last point being intentional, but he recognizes it as a real possibility:

“Many progressives, myself included, hope that the next president will be another F.D.R. But we worry that he or she will turn out to be another Grover Cleveland instead – better-intentioned and much more competent than the current occupant of the White House, but too dependent on lobbyists’ money to seriously confront the excesses of our new Gilded Age.”

The idea that a Democrat may be well intentioned, but unable to make some necessary politically bold moves seems more likely when the influx of corporate dollars is noted. The business community is often inherently conservative in nature – along with being enemies of volatility and incoherent policies; they also fight against change and any policy that is assumed to be harmful to the bottom line. I am, like Krugman, very concerned that we have established such a low baseline over the past seven years for leadership, that the progressives in America will rally behind a candidate that is primarily financed by some of the very industries (pharmaceuticals and insurance) that are most impeding necessary social changes.