The Washington PostDemocracy Dies in Darkness

The fissure between Republicans and business is less surprising than it seems

Business groups have always worked with both parties to support globalization and free trade

Senate Minority Leader Mitch McConnell (R-Ky.) during a Senate Rules Committee markup on the For the People Act, which would expand access to voting, at the Capitol on May 11. (J. Scott Applewhite/AP)

Today’s Trump-oriented Republicans are testing the traditional alliance between the Republican Party and big business. The CEOs of Coca-Cola, Delta Air Lines and AT&T, as well as lobbying organizations like the U.S. Chamber of Commerce, have spoken out against Republican-backed policies such as Georgia’s new voting law, immigration restrictions and anti-trans bathroom laws. These polarizing culture-war policies make it hard for business leaders to uphold their commitment to diversity, inclusion and social responsibility, which is key to their good standing with both customers and diverse workforces. Business’s opposition to these policies has created waves in the Republican Party, leading Senate Minority Leader Mitch McConnell (R-Ky.) to request that Big Business “stay out of politics” if it could not be nonpartisan. Commentators and pundits were quick to mock McConnell’s sanctimonious plea, noting how Republicans have depended on big business engaging in politics for decades.

Despite the long-standing association between the GOP and corporations, big business lobbies have also always been bipartisan. They have to work with whatever party is in power and whatever politicians are in office, so it makes sense that they contribute generously to both parties. Moreover, both parties have shared big business’s vision of the globalization of American-style capitalism. Since the Reagan era, there has been an effort across the aisle to embrace freer trade and more open borders. This history reveals that the popular narrative of a pro-business Republican Party squared off against an anti-business Democratic one was never truly accurate.

An instructive example of business bipartisanship comes from the National Association of Manufacturers (NAM) in the 1980s and 1990s. Historically, NAM has been one of the most reliably Republican of business lobbies. In the 1950s, NAM conservatives played a key role in articulating the small-government, tax-cutting principles of the New Right.

Yet, ironically, precisely at the moment when the New Right finally gained power in 1980, with Ronald Reagan winning the presidency and Republicans capturing the Senate for the first time since 1955, NAM gained Democratic leadership. NAM president Alexander Trowbridge, an Allied Chemical Corp. executive, had been Lyndon B. Johnson’s commerce secretary. He brought in Jerry Jasinowski, a policy wonk in the Carter administration and an aide for liberal former vice president and Democratic Sen. Hubert Humphrey, as chief economist. Jasinowski had even helped draft the 1978 Humphrey-Hawkins Full Employment bill (which NAM opposed).

Trowbridge and Jasinowski supported Reagan initiatives, but they also often found themselves at odds with the administration, especially on tax reform. This division highlighted the often forgotten reality that Reaganomics did not help America’s large manufacturing corporations. In the throes of deindustrialization, beset by foreign competition and falling victim to hostile takeovers, the large corporations represented by NAM hoped for manufacturing-specific tax relief.

Instead, Reagan’s tax reforms removed loopholes that had long subsidized American industry. Tax rate cuts also put money into the hands of consumers, which fed a market for cheap imported goods and bolstered the financial sector. Winners included investors who put their money in emerging industries, international capital markets, real estate and junk bonds rather than America’s dying manufacturing sector. Changes in antitrust law also led to a takeover wave that dismantled one-third of the largest corporations, many of them NAM members.

Reagan’s policies and politics weren’t all bad for NAM. His pro-globalization rhetoric, faith in free markets and policies that loosened capital and trade constraints were a boon to what NAM saw as the solution to manufacturing’s ills: exports and trade expansion. The United States pursued free-trade deals, most notably what would become NAFTA, which the NAM leadership supported even as some of its members did not. Reagan enforced anti-dumping agreements and devalued the dollar against the yen in what the Wall Street Journal condemned as protectionism but NAM members saw as “fair trade.” Plus, Reagan was avowedly anti-union, although deindustrialization was decimating unions without government help.

But the Reagan administration’s moves made clear that manufacturers could only count on its officials so much to attempt to reverse industry’s decline. And Reagan opposed Trowbridge and Jasinowski’s top policy priority: some kind of industrial policy that would help manufacturers regain productivity, automate their plants and retrain workers. In the 1980s, Jasinowski invited liberal economist Robert Reich to explain how government could help industry recalibrate for a more precisely engineered, downsized, technologized future. Conservative Republicans like Reagan, however, had little patience for this kind of policy talk.

But NAM’s ties to people like Reich paid off with the rise of “new Democrats,” sometimes called “neoliberals,” who steered the Democratic Party away from unions and the old industrial economy to a future of trade and tech, dismantling much of the New Deal infrastructure along the way. Bill Clinton epitomized these tendencies, and he appointed Reich labor secretary. Reich promoted “high-performance workplaces” and employee participation committees that seemed to resemble old-time (and NLRB prohibited) “company unions.” These were the kinds of innovations Jasinowski, who had succeeded Trowbridge in 1990, was pushing for at NAM and that helped U.S. manufacturing regain its competitive position. NAM also welcomed Clinton’s education policy, which bolstered students’ technological skills.

While the Clinton administration jettisoned Democrats’ New Deal commitment to unions, it double-downed on the party’s free-trade internationalism, delivering NAFTA and the new World Trade Organization, while working to give U.S.-based corporations access to China’s consumer and labor markets. Some NAM members opposed these trade deals — Roger Milliken of Milliken & Co. (textiles) resigned from NAM over NAFTA — but Jasinowski and the NAM leadership understood that access to international markets and integrated supply chains would make U.S. corporations more competitive. In a bold embrace of internationalism, Jasinowski recruited international companies like Toyota and Siemens into NAM. While conservatives in the organization balked, viewing NAM as existing to protect and enhance American industry against international competition, this move recognized how nationalism was problematic in a new era of globalization.

The bipartisan consensus boosting free-trade internationalism extended into the 21st century, as both the Bush and Obama administrations pushed for increasing free trade and comprehensive immigration reform — priorities of businesses looking for new markets, high skilled immigrant labor, as well as low-wage labor. It rested on the marginalization of those on both the left and the right who opposed freer trade and internationalism, including manufacturers like Milliken and neo-isolationists like Pat Buchanan on the right, and former industrial workers and Rust Belt communities on the left. These groups would eventually find leaders in Donald Trump and Bernie Sanders.

The nationalist, neo-isolationist, “America First” energy that has transformed the Republican Party is a rebuke of these decades of bipartisan internationalism that did the bidding of big business. It leaves large companies less willing to quietly swallow Republican cultural politics that they oppose, because while Republicans remain allies on taxes and regulations, their abandonment of free trade and freer immigration policy hurts the bottom line. Business has always been more open to bipartisanship and supporting Democratic initiatives than commonly perceived. What we’re witnessing now is more a rebalancing than wholesale change.