How Corporate America exercises its immense political power - Narain Batra

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https://vtdigger.org/2021/10/07/narain-batra-how-corporate-america-exercises-its-immense-political-power/

This commentator has had some very astute observations on our world and national situation. I wanted to bring his writings to our DU audience.

This commentary is by Narain Batra, a resident of Hartford, professor of communications and corporate diplomacy at Norwich University, and author of “The First Freedoms and America’s Culture of Innovation” and the forthcoming “India in a New Key.”

Fascinated by how the political football of raising the debt ceiling ($28.43 trillion) is being played between Democrats and Republicans, a recurrent annual issue that eventually gets resolved, I wondered how the economic power of Corporate America generates political power, and how it’s being used.

Sen. Bernie Sanders and other progressives bemoan that Big Business does not pay its fair share of taxes, which of course is true, but they don’t question its political power.

Consider this: Bloomberg reported recently that Treasury Secretary Janet Yellen appealed to the CEOs of Wall Street’s biggest financial firms, including JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, and Goldman Sachs, “to enlist their help in her campaign to pressure Republicans to support raising or suspending the debt ceiling.”

One might say that Yellen is using all the available means of political persuasion; nonetheless, it seems that Corporate America has become an autonomous center of political power, an unelected fourth branch of government, the role earlier played by the press.

Yellen would know that, although Wall Street and Corporate America fund both political parties, ideologically it has greater affinity with Republicans than Democrats.

It’s also true that Corporate America cannot afford to be content to feed only the stockholders’ bellies. that its responsibilities go beyond profitmaking, and that it is a political actor.

Hardly anyone, and rightfully so, pays heed to what Chicago economist Milton Friedman argued in 1970: “The Social Responsibility of Business Is to Increase Its Profits,” which Gordon Gekko (Michael Douglas) in the 1987 movie “Wall Street” took to the extreme: “Greed, for lack of a better word, is good. … (Greed) captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, for money, for love, for knowledge — has marked the upward surge of mankind.”

Gekko might have foreshadowed the ascent of Donald Trump. Addressing his stockholders, Gekko likened the United States to a “malfunctioning corporation. … America has become a second-rate power. Its trade deficit and its fiscal deficit are at nightmare proportions.”

Gekko did not foresee the rise to power of Corporate China, but President Xi Jinping did, and he soon realized that the growing might of Chinese tech giants — including Alibaba, Tencent, Baidu, Xiaomi and others — could be a challenge to his absolute power. So he plucked growing feathers from their wings to keep them grounded.

As the whole world watched in horror the Jan. 6 Trump-guided catastrophic — but nonetheless spectacular — assault on the Capitol to overturn the presidential election that the Senate had met to certify, Americans also saw the immense political power of Big Business and Silicon Valley, which soon went into political action and not only shut off the financial spigot to Trump and the politicians who voted against the certification, but also choked their voices. Trump was banned from Twitter and Facebook; Apple and Google removed the conservative Paler platform app; and Amazon refused to host Paler anymore. BigTech de-platformed the once mighty Trump.

Without Twitter — which Trump had brilliantly weaponized to advance his political agenda and browbeat his political opponents — he sounded like a village idiot.  Which, however, has raised serious First Amendment issues — whether BigTech, which controls channels of information, could, without due process, deny access to social media platforms and apps through which we exercise our free speech rights as citizens in a democracy.

The European Union might seem to be a congeries of sovereign states, but when it comes to dealing with global corporations like Google, Microsoft, Apple and Facebook, for example, or a technological juggernaut like China’s Huawei, the EU does not underestimate their politic-economic power and takes a united stand.

Nonetheless, EU countries cannot ignore the political power of their own domestic corporations. Consider this, for example: Germany’s politically powerful automobile and precision machine industries, as William Galston commented in The Wall Street Journal, exercised tremendous influence on Angela Merkel’s trade and foreign policy with China. So does Big Business in the United States in its dealing with China

Instead of depending upon Washington, major corporations have their own political affairs experts who use the same tools and talents as diplomats do in dealing with national and international affairs. Many of them are retired ambassadors, state department officials and military officers; they know how to negotiate with global and national stakeholders, including Senate and House members, Republicans and Democrats.

Building social and political capital is sine qua non because Corporate America in distressing times would need help, as happened in 2008, when the Obama administration bailed out some Wall Street firms euphemistically dubbed as “too big to fail.” Therefore, to help a powerful politician in need — Treasury Secretary Yellen’s debt ceiling conundrum, for example — it makes political sense for Wall Street financial firms to use their political influence with Republicans.

But we cannot ignore what Professor Jerry Davis of Michigan Ross School of Business said — whether “the exercise of such overt political influence on the workings of U.S. democracy — with almost no room for oversight, by shareholders or anyone else — requires a new set of regulatory tools for a new form of corporate power.”