Big Biz Bails on Bush?

Thursday, October 28, 2004 | 07:20 AM
"If President Bush loses on Nov. 2, the finger-pointing among Republicans will begin immediately. Some may ask whether corporate America did its part. "The business community has to recognize that the public-policy arena is a very competitive place," says Mr. Fuller. "If you aren't going to participate fully, you aren't going to get results that are very satisfactory."

Indeed. We continue to observe a number of demographic groups slipping from the incumbent's grasp: Cubans, Arab Americans, Hispanics, Soccer moms -- even conservative states such as Coors hometown, Colorado, is in the swing column.

How did the GOP let these traditional strongholds slip from their grasp? Alan Murray of the WSJ notes the deafening silence from big business as one possible factor:

"President Bush holds a lead of less than three percentage points among "likely voters," according to an average of recent national polls. Some Republican strategists worry that isn't enough to offset a potent mix of antiwar warriors, anticapitalism capitalists and organized labor working night and day to turn out legions of new voters.

The counterbalance to the [left leaning 527 donors] of course, should be the hordes of American business leaders who support capitalism and limited government, who have benefited handsomely from the policies of this administration and who would like to see George Bush re-elected. Where are they? Surprisingly quiet.

It is one of the great ironies of Election 2004. Mr. Bush's opponents attack him daily for being the tool of big business. But big business is hardly heard."

Why is that so? Say what you will about the colder aspects of the markets, but at its heart, modern capitalism is a meritocracy. Why would the business community endorse an administration that by all measures appears to be bumbling incompetants?

Maybe its the economy. After all, the recovery has been feeble, and executives are loathe to put their quarterly numbers at risk. But I doubt that's it. Corporate America's balance sheet is in the best condition it been for years. Debt has been refinanced, profitibility is very high.

So what then? So far, we have heard that the new campaign finance rules have kept corporations sidelined to some extent. Others blame the trial lawyers, and even Eliot Spitzer (where are the Law & Order Republicans when you need them?)

Perhaps there's another reason: It's just bad business publicly backing Bush.

Look at the Sinclair debacle. Shareholders punished the stock. Fund managers screamed at their self-indulgent politicizing of shareholders assets. Calls for an FCC investigation have been made, shareholders law suits have been filed, and there is a grassroots movement to publicly challenge their licenses the next time they come up for renewal.

The bottom line is, well, the bottom line.

And it appears in an evenly divided nation, alienating exactly half of your clientele is simply bad business.

UPDATE: October 28, 2004 10:04
Just noticed that The New York Times has a related story: Private Political Donations Can Carry a Business Price
More of the same . . .

Cubans, Hispanics, Arabs: Are Key Demographic Shifting Party Affiliation?
Barry Ritholtz
The Big Picture, Thursday, October 21, 2004

Wary Big Business Is Loath to Speak On Bush's Behalf
By Alan Murray
The Wall Street Journal, October?26,?2004;?Page?A4,,SB109874306239655206,00.html

Private Political Donations Can Carry a Business Price
Glen Justice
New York Times, October 28, 2004

Thursday, October 28, 2004 | 07:20 AM | Permalink | Comments (4) | TrackBack (1) add to | digg digg this! | technorati add to technorati | email email this post



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"If President Bush loses on Nov. 2, the finger-pointing among Republicans will begin immediately. Some may ask whether corporate America did its part. "The business community has to recognize that the public-policy arena is a very competitive place," ... [Read More]

Tracked on Oct 28, 2004 2:11:11 PM


Business is not helping the incumbent either by holding onto cash rather than hiring:

Paul McCulley from Pimco says:

"Like Greenspan with respect to the neutral Fed funds rate, I don’t know where NAIRU is, but I know where it isn’t. And 5½% unemployment, as currently the case, is not consistent with full employment! If it were, corporate profits as a share of GDP would not be at a multi-decade high. Likewise, the labor force participation rate would not be falling, as it is, but rather rising. And finally, President George Bush would not be the first president since President Hoover to have served a term with net job destruction, worried about his own job."

Posted by: bhaim | Oct 28, 2004 12:43:03 PM

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