“It’s Lonely At The Top”: Will Republicans Ever Realize That Deifying Business Owners Is Bad Politics?
Last week, congressional Republicans got together at a Chesapeake Bay resort to contemplate their political fortunes. In one presentation, House Minority Leader Eric Cantor delivered a bit of shocking news to his colleagues: Most people are not, in fact, business owners. It would be a good idea, he suggested, if they could find a way to appeal to the overwhelming majority of Americans who work for somebody else. Their aspirations don’t necessarily include opening up their own store or coming up with an amazing new product, so the prospect of lowering the corporate tax rate or slashing environmental regulations may not make their pulses quicken with excitement. They’re more concerned with the availability of jobs, the security of health care, and the affordability of education. “Could it actually have taken Republicans that long to realize they should address such problems, especially when Democrats have made huge gains appealing directly to middle-class voters?” asked conservative journalist Byron York, who reported on the meeting. “Apparently, yes. And even now, not all House Republicans are entirely on board. ‘It’s something that’s been growing and taking time for members to get comfortable with,’ says a House GOP aide, ‘because they did spend the last decade talking about small business owners.'”
You’re probably surprised at the Republicans’ surprise. But it isn’t so much about a numerical misconception—I’m sure that with the possible exception of a couple of the most lunkheaded Tea Partiers, the GOP members of Congress don’t actually think that most Americans own businesses—as it is about a moral hierarchy they’ve spent so much time building up, both in their rhetoric and their own minds.
We all believe that some people are just more important than others, and for conservatives, no one is more important than business owners. Remember how gleeful they were when President Obama said “you didn’t build that” when discussing businesses during the 2012 campaign? Sure, he was taken out of context (he was talking about roads and bridges, not the businesses themselves), but Republicans genuinely believed they had found the silver bullet that would take him down. He had disrespected business owners! Surely all America would be enraged and cast him from office! They made it the theme of their convention. They printed banners. They wrote songs about it. And they were bewildered when it didn’t work.
Just like those members of Congress listening incredulously to Eric Cantor, they couldn’t grasp that the whole country didn’t share their moral hierarchy. After years of worrying primarily about the concerns of people who own businesses, they’ve elevated to gospel truth that the businessman’s virtue is unassailable, that his rewards are justly earned, and that no effort should be spared to remove all obstacles from his path. When it comes down to a choice between, say, a business owner who would like to pay his employees as little as possible and a group of employees who’d like to be paid more, conservatives don’t just see the choice as a simple one, they can’t imagine why anyone wouldn’t agree.
As a liberal, I have a different view, precisely because I don’t place the businessman at the top of my moral hierarchy. As a society we need entrepreneurs, but there are many kinds of people we need. To be clear, I’m not saying there’s anything wrong with business owners, just that the guy who owns the widget factory isn’t necessarily a better person than the guy who works on the line making widgets. Owning a business can be difficult and challenging, but so can a lot of things. I know business owners who work very hard to succeed. I also know teachers who get up at 5 in the morning every day to grade papers and plan lessons, and nurses who have to comfort the dying and change people’s bedpans. Those jobs are hard, too. And they don’t come with the prospect of great wealth if you’re good at them.
That matters too, to both liberals and conservatives. Many conservatives find wealth to be a marker of virtue—not a perfect marker, maybe, but pretty close. If you’re rich, they plainly believe, it’s probably because you worked hard for your money, and if you’re poor it’s probably because you’re lazy and unreliable. Things like unemployment insurance and food stamps only reward the indolent. The bootstraps are just there waiting to be tugged on, and if you haven’t grabbed a firm hold you have no one to blame but yourself.
As for the businesspeople themselves, it’s little wonder that so many find warmth in the embrace of the GOP, nor that they are shocked and appalled when other people criticize them. The venture capitalist Tom Perkins may have come in for a ton of ridicule when he wrote a letter to the Wall Street Journal suggesting the possibility that liberals will soon be rounding up rich people and herding them into death camps (“I would call attention to the parallels of fascist Nazi Germany to its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich'”), but Perkins—a guy who once killed a man with his yacht—was surely speaking for more than a few of his peers. In the Republican party they find not only tireless advocacy for policies that will help them hold and expand their wealth, but the love and admiration they so clearly crave.
In 2012 on Labor Day, that same Eric Cantor tweeted, “Today, we celebrate those who have taken a risk, worked hard, built a business, and earned their success.” Even on the day created to honor working people, the only Americans for whom he could spare a thought were business owners. Perhaps in the year and a half since, he has come to a new awareness that even if you work for someone else, like most of us do, you’re still worthy of consideration. Whether his party agrees—and whether they’ll do anything about it—is another question entirely.
By: Paul Waldman, Contributing Editor, The American Prospect, February 3, 2014
“The Rebranding Mirage”: The GOP Mirage Isn’t Radical Grassroots Power But Elite Control And “Pragmatism”
Anyone who reads a lot of political commentary is aware there’s a broad division in opinion about what’s going on in the Republican Party these days. One camp holds that all the radicalism and restlessness associated with the Tea Party Movement (and before that, the Christian Right) is ultimately insignificant because the GOP is an elite-driven, business-dominated enterprise that’s willing to let conservative activists and their rank-and-file foot soldiers have the keys for a joy-ride now and then, but is ultimately in charge and is ultimately pragmatic and “centrist” in its outlook. The other camp holds that the mirage isn’t radical grassroots power but elite control and “pragmatism.”
I’m firmly in the second camp. So is Salon‘s Brian Beutler, who has a long essay today disputing the President’s relatively benign view of the direction of the GOP, as expressed in that gazillion-word interview-based profile by David Remnick in the latest New Yorker.
The most interesting thing in Beutler’s argument is his discussion of how immediately after the 2012 elections GOP elites decided on comprehensive immigration reform as their “rebranding” vehicle:
Republican leaders settled on immigration reform as their one big overture precisely because they thought it would be the easiest gesture to make to the voters who rejected them without antagonizing the ones who didn’t. The GOP donor class hates taxing wealthy people to subsidize takers, but supports immigration reform uniquely among social issues for opportunistic reasons; and of all the Republican Party’s potential growth constituencies, working immigrants are the most sympathetic to conservative voters who oppose abortion and marriage equality out of religious principle.
So immigration reform is the greatest common factor — and it has been on a breathing machine for half a year and counting.
This should be kept carefully in mind when more difficult issue-position maneuvers–i.e., over entitlements, poverty programs, abortion, foreign policy, same-sex marriage, taxes–are put out there as potential image-changers for the GOP. If GOP elites, with the full backing of the business community and many conservative religious leaders in tow, can’t succeed in convincing “the base” and its ideological shock troops to pursue the ripe, low-hanging fruit of a bigger share of the Latino vote with immigration policies accepted by Ronald Reagan and George W. Bush, why does anyone imagine the tougher cases are going to go well? Beats me, beyond an intensely held belief in the power of elites and their determination to follow the median voter theory in a “move to the center” whenever an election is lost.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, January 22, 2014
“The Wages Are Too Damn Low”: Hiking The Minimum Wage Has Little Or No Adverse Effect On Employment
As I mentioned in the lunch link roundup, increasing the minimum wage is all the rage in lefty precincts today. DC is considering a raise, and Democrats generally are smelling a winning issue. (For a deeper look, Arindrajit Dube had a long piece on it over the weekend.)
Conventional economists tend to despise minimum wage laws, because they’re a form of price control, and that gives The Market a sad. Setting a minimum price of labor, according to Econ 101, should increase unemployment, because some people won’t have a marginal product above the wage floor. But as Paul Krugman pointed out in his column this morning, the evidence just doesn’t support this conclusion:
Still, even if international competition isn’t an issue, can we really help workers simply by legislating a higher wage? Doesn’t that violate the law of supply and demand? Won’t the market gods smite us with their invisible hand? The answer is that we have a lot of evidence on what happens when you raise the minimum wage. And the evidence is overwhelmingly positive: hiking the minimum wage has little or no adverse effect on employment, while significantly increasing workers’ earnings.
It’s important to understand how good this evidence is. Normally, economic analysis is handicapped by the absence of controlled experiments. For example, we can look at what happened to the U.S. economy after the Obama stimulus went into effect, but we can’t observe an alternative universe in which there was no stimulus, and compare the results.
When it comes to the minimum wage, however, we have a number of cases in which a state raised its own minimum wage while a neighboring state did not. If there were anything to the notion that minimum wage increases have big negative effects on employment, that result should show up in state-to-state comparisons. It doesn’t.
As others have noted, there’s good reason to believe that increased wages at large businesses would work out well for the businesses themselves. Businesses would both reduce turnover—the hiring process is expensive, and there is a great deal of churn at the bottom of the labor market—and increase their employees purchasing power, a hefty fraction of which would likely be spent at their own place of employment or somewhere similar. I’d guess that wages are held down out of class panic and a desire for increased profits for their own sake rather than some strict business reason.
Personally, if I had to choose, I would rather see more broad-based economic stimulus through fiscal and monetary action rather than a minimum wage hike. (Though I would still support one on its own merits.) But if they don’t like it, American elites have no one to blame for this but themselves. If the power structure can’t ensure full employment through normal channels, then demands for economic justice through more easily-understood channels will only become more common.
By: Ryan Cooper, Washington Monthly Political Animal, December 2, 2013
“Eight Months Until The End Of Job Lock”: A Reminder About One Of The Best Things Obamacare Does
For years, even before Barack Obama was elected, one of the many complaints liberals (mostly) had about the current employer-based health insurance system was “job lock”—if you have insurance at your job, particularly if you or someone in your family has health issues, then you’re going to be hesitant to leave that job. You won’t start your own business, or join somebody else’s struggling startup (unless they provide insurance), and this constrains people’s opportunities and dampens the country’s entrepreneurial spirit.
That this occurs is intuitively obvious—you probably know someone who has experienced it, or have experienced it yourself. And today there’s an article in that pro-Democrat hippie rag The Wall Street Journal entitled “Will Health-Care Law Beget Entrepreneurs?” Amid the worrying about the implementation of Obamacare in January, and the quite reasonable concern that the news could be filled with stories of confusion, missteps, and dirtbags like that Papa John’s guy cutting employees’ hours rather than give them insurance, to avoid the horror of increasing the cost of a pizza by a dime,11This is important: when you hear a story about an employer who cut his employees’ hours so he wouldn’t have to abide by the law, what you’re reading about is a jerk who doesn’t want to offer his employees insurance, not some inevitable consequence of the law. That’s a choice he makes. And don’t forget too that the employer mandate only applies to companies with 50 or more employers, and 96 percent of them already offer health insurance, even without a mandate. it’s a reminder that there will probably be lots of stories like this one in the news too, stories about people whose lives have been changed for the better by the fact that Americans will have something they’ve never had before: health security.
So what kind of effect could the elimination of job lock have on the economy? That’s tough to say. The study referred to in the WSJ article finds that people are much more likely to start a business if they get their health insurance from their spouse’s job than if they get it from their own job; in the former case you’d still have insurance if you started a business, while in the latter case you’d lose it. In addition, and this is particularly interesting, even though you might think of 65-year-olds as looking forward to days of golf and eating dinner at 4 p.m., a large number of people seem to start businesses pretty much the minute they become eligible for Medicare. While it’s hard to get insurance in the current private market if you’re 44, it’s basically impossible if you’re 64.
So it seems that the fact that after January, job lock will be history means that more businesses will be started. How many more? Well, we don’t know yet, and it could depend in part on how affordable the insurance you can get through the exchanges is compared to what people are getting from their employers. And it will be hard to measure precisely how much more economic activity is generated by businesses that wouldn’t have otherwise been started. Obviously, some will succeed and more will fail.
Nevertheless, beyond additions to GDP, there’s something psychological that shouldn’t be discounted, touchy-feely though it might be. The end of job lock means the end of a certain kind of fear that all of us under the age of 65 live with to one degree or another. It’s the fear that leaving a job, voluntarily or otherwise, could become an utter financial calamity if we or one of our loved ones has a health problem. Even if you wish reform hadn’t been grafted on to the existing employer-based system (I’ll raise my hand on that one), ending that fear is huge; it’s one of the best things Obamacare does. Even if it’s difficult to communicate on a bumper sticker.
By: Paul Waldman, Contributing Editor, The American Prospect, May 9, 2013
“Debunking GOP Hype”: Very Few Businesses Plan To Drop Health Coverage Because Of Obamacare
Companies that have threatened to drop coverage of their employees as a result of Obamacare are vocal, but according to a new study they are also few and far between. Only a total one percent of businesses said they are not going to continue coverage in the International Foundation of Employee Benefit Plans survey. Another 2 percent said that they are “somewhat unlikely” to continue providing health care to their employees. Meanwhile, 69 percent will definitely cover employees, and 25 percent “very likely” will.
The results are encouraging primarily because they show businesses have growing confidence in Obamacare — last year, the survey showed that far fewer companies were certain to continue their health care plans. It also means business leaders are beginning to recognize the benefits providing employees with health coverage:
That hefty percentage of respondents who said coverage definitely will be offered in 2014 contrasts with a similar survey the IFEBP did last year, when only 46% of respondents said coverage would definitely be offered. That greater certainty expressed by employers about offering coverage next year may the result of several factors, said Julie Stich, research director for the Brookfield, Wis.-based IFEBP. One factor may be a greater consideration by employers on how offering a health care plan can significantly aid in the recruitment and retention of employees, Ms. Stich said.
Offering health care does, indeed, aid recruitment and retention. And if three percent of companies chose not to do so while the rest do, they will likely suffer the consequences. Lacking health coverage also drives away some of the best employees, especially when, under Obamacare, those employees will then be forced to take on the cost burden of healh care coverage themselves.
By: Annie-Rose Strasser, Think Progress, April 11, 2013
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