One of the great puzzlements in politics is the lock that the GOP has on businessmen, from Main Street to corporate America. Are they blind to their own self interest? The truth is out there, after all, and not hard to find.
By virtually every measure, over the lifetimes of every voter in the country, Democratic administrations have been better for the economy than Republican ones. Not by a little, either. By a lot.
In a sense this is a vindication of the GOP’s economic principles, which are the opposite of its actual practices once in power. The GOP, in fact rather than in theory, is historically the party of big deficits and big government. Reagan busted the budget. Clinton balanced it. Bush busted it again, even worse.
What’s going on, then? Are all these tough-minded, hard-nosed, bottom-line business men actually suckers? Well, yes and no. Yes if the businessmen are engaged in what Samuel Ricard called gentle commerce. This is positive-sum commerce, in which both parties profit from a transaction. It characterizes much of what we thing of as Small Business and it largely depends on return customers.
But the answer is no if the businessmen are engaged in zero-sum transactions where there is a loser for every winner. Think of a monopoly electric utility, as we are doing so unhappily in Connecticut right now. Think of a broker selling a mortgage to a man who can’t afford it. Think of most of the credit “industry.” These people don’t need to care if they cost the other fellow his job, his health or his home; they’ve got yours, Jack, and now they’re off to the Hamptons with it.
When they win, everybody else loses. This is one of the reasons for the seemingly odd disconnect between the Dow Jones Industrial Average and the real economy in which most of us live. After all, profits go up when you fire workers.
The small businessman easily grasps this point, and so he votes Republican in order to bust the unions and do away with the minimum wage — even, if Newt Gingrich has his way, to bring back child labor. He only grasps when it’s too late the further point that fired workers can no longer afford to be his customers.
Wall Street and the corporations may grasp the point, but don't much care. Their operating principle is that of those Enron energy traders who cashed out after collapsing California’s economy — IBG, YBG. I’ll Be Gone, You’ll Be Gone.
More tomorrow on the role played by budget deficits in implementing this great Republic moral principle. (As a member of the Democrat Party, I guess I can turn Republic into an adjective if I want to…)