The people are parting company with the corporations

The disconnect between the people and the business community community has reached huge proportions in the US. Corporations are enjoying record profits but investing very little in the economy. Only one third of Americans believe large corporations are having a positive effect on the country and only 2 in 10 people surveyed say they have confidence in big business. The latter are in denial, thinking that if they explain their needs better people will come round. These needs include expanding international trade, immigration reform, reducing deficits, relaxing regulation, cutting corporate taxes and social programs like Social Security and Medicare.

(Interjection: What they think the whole point of life is is a mystery. Just making profits and allowing the bosses to run away with huge incomes?).

Meanwhile, the number of companies listed on the stock market has dropped by half from 1997 and 2012, and start-ups have not created nearly enough jobs to offset the losses caused from globalization. The troubles of business are magnified by social media,in terms both of outright criticism and also by plain lies and untruths that gain traction. There are no truth filters. Never before has business had such an image problem.

Much of the corporate agenda is stalled in Washington (except tax reduction). TTIP and TTP are both dead. Immigration reform looks a non-starter and much needed infrastructure repairs and improvements (which are plainly necessary) won’t get done because the Republicans will authorize no spending. Regulations are indeed being scrapped for the sake of business, although this may come back to bite them as safety standards drop. The stock market is doing well in the expectation of lower taxes and more profits.

(Interjection: regulations were there to protect the health, safety and welfare of the citizen. When the citizen finds he or she has no protection and is forbidden to sue corporations, the backlash will surely come, big time)

And now the Republicans are proposing to lower corporation tax substantially, on the bogus “principle” that it will act as a spur to commercial and industrial activity, and that the reduction in tax income will be more than paid for by the expected productivity and investment. The Republicans just tried that in Kansas, and as a result Kansas is bust. The idea has never worked and never will, if only because the business owners capture any benefits, if there are any.

Meanwhile, “top” businessmen are smarting at the comments of Trump and Sanders. Do we feel sorry for them? This is the beginning of the end for American business domination, excepting, perhaps, hi-tech – if China doesn’t out-perform it.

  • Owen Bell

    I don’t believe the corporations are quite as bad as you suggest. There are certainly ones guilty of illegal or immoral behaviour. But corporations also do a lot of good, from investing in science and technology to employing billions of people.
    Take for instance, the CBI’s warm reception to Jeremy Corbyn recently. Far from a hostile response to Corbyn’s socialist ideas, the CBI was surprisingly open minded. They accepted his belief that housing has become unaffordable and Britain’s employees are poorly skilled. Contrary to popular perception, they are concerned at income inequality. They agree that infrastructure should receive more investment, particularly in broadband internet.
    At the same time, some more traditionally corporate views are true. In Britain, taxes are historically higher than average. While the corporation tax rate shouldn’t be lowered by anymore, a big increase would be bad for the economy. Business rates are a concern. And renationalisation needs to be considered pragmatically, rather than assuming a state monopoly does a better job than a genuinely competitive private sector.
    Most significantly, corporations are turning away from the Conservative party because of Brexit. There is no appetite for a hard Brexit amongst the business community, and certainly not for crashing out without a deal. It would be a mistake for the left to abandon business just as business is beginning to embrace them.