Earlier this year the U.S. Chamber of Commerce sent an open letter to the candidates for president, outlining the steps the nation’s largest companies believe would boost their investment in the United States. It is, in large part, a list of things that presidential front-runners in both parties have denounced.
The recommendations included expanding international trade and immigration reform, reducing deficits, relaxing regulations and cutting corporate tax rates and safety-net programs such as Social Security and Medicare. Few have attracted support from the major candidates.
Big companies — not just Wall Street bankers — find themselves and their priorities more adrift from American politics than they have in decades. Republican candidate Donald Trump blasts firms for outsourcing jobs overseas. Democratic candidate Bernie Sanders hits them for how much corporate tax they pay; his rival Hillary Clinton laments their focus on profits at the expense of broader economic vitality.
A confluence of factors is fanning the flames. The ginger recovery from the financial crisis has produced few sustained income gains for most workers. Corporations are enjoying record profits but investing a historically low amount of them back into the economy. Meanwhile, social media has given corporate critics new and powerful platforms.
“Business is a popular punching bag in every election, but it’s reaching unprecedented levels this time around,” said Tom Donohue, the chamber’s president. “This is what happens in a poorly performing economy when people are looking for someone to blame.”
Frustrated with the dynamic, some executives, such as the CEOs of General Electric and Verizon, have taken the extraordinary step of rebutting their campaign-trail critics online. Others are warning lawmakers and candidates that they risk damping investment and economic growth for years to come.
Leaders of the top business lobbying groups, in particular, heap scorn on lawmakers and candidates, who they say have lost the will to push for policy changes that have long enjoyed corporate support. Many of those policies have aroused voter anger in a time of middle-class income stagnation, low growth and lingering memories of the crisis that began on Wall Street and spread to the deepest recession since the Great Depression.
In the postwar era, “There’s never been a greater disconnect” between the presidential campaign trail and the business community, said John Engler, a former Michigan governor who now heads the Business Roundtable in Washington.
Others, though, say that business leaders are misreading the mood of the electorate and the steps they must take to reconnect with angry voters.
“Some in the business community think that if we just explain things better, people will understand,” said Peter Scher, who served in President Bill Clinton’s administration and is now vice chairman of JPMorgan Chase in Washington, overseeing the firm’s $100 million investment in Detroit. “It’s more than just a messaging issue.”
“Not enough leaders in Washington are offering alternatives to the idea that if it’s good for business it must be bad for the middle class,” he added.
Big corporations remain large drivers of employment and investment in the United States, but their attachment to Americans’ everyday lives is fading.
The number of U.S. companies listed on the stock market dropped by half from 1997 to 2012, said Jerry Davis, a sociology professor at the University of Michigan’s Ross School of Business. New companies that have undertaken initial public offerings and issued public stock have created relatively few genuinely new jobs, Davis argues, especially compared with the industrial giants of 50 years ago. Existing companies remain under pressure from shareholders to automate or outsource jobs and hold salaries down.
“In the Twentieth Century, the American economy was dominated by major corporations,” Davis writes in a book out this month. “In the Twenty-first, that will no longer be true.”
A Pew Governance Survey last summer found that only one-third of Americans believe large corporations are having a positive effect on the way things are going in the country. Gallup surveys show that about 2 in 10 Americans say they have a high amount of confidence in big business, a slight improvement from the depths of the recession but still lower than in the late 1990s.
“There’s no question that this is the toughest communications environment that I’ve ever seen,” said Lance Morgan, a former aide to the late New York senator Daniel Patrick Moynihan, who is now chief communications strategist at Powell Tate. “To the extent that the presumption of ‘good’ ever existed” for companies, “it certainly is rarer and rarer.”
The democratization of complaints online — and the opportunity for candidates to seize upon them — complicates companies’ collective image problem, executives and veteran corporate communicators say.
“In the past, information was disseminated through established media, so if a candidate said something outrageous you worried less because reporters would fact-check it,” said Craig Silliman, executive vice president of public policy and general counsel of Verizon Communications. “That’s not true anymore. With social media there are no truth filters, so it is important to respond directly before a false statement gains traction.”
Verizon chief executive Lowell McAdam recently tangled online with Sanders over issues stemming from a worker strike at the company. He disputed Sanders’s allegations of “corporate greed” and called the senator from Vermont “uninformed.” GE chief executive Jeffrey R. Immelt published a similar counterattack this month on Sanders, defending the company’s record of job creation — including in Vermont.
More than reputations are at risk for business leaders. Their agenda is effectively stalled in Washington, where immigration reform and infrastructure spending are dead issues for now, tax reform is proceeding sluggishly and prospects look dim for the Trans-Pacific Partnership trade agreement negotiated by the Obama administration.
Donohue and the chamber are focusing their political spending this year on the House and Senate, in hopes of electing candidates who will pursue the business lobby’s agenda no matter who wins the presidency.
The critiques may sting on the trail, said Jay Timmons, who heads the National Association of Manufacturers, but the agenda is what business leaders are most worried about losing. “Having people say nice things about you only goes so far,” he said. “You’ve got to have the policies in place that will let us thrive and let us expand.”