When I was growing up, the common understanding was Corporate America was firmly behind Republicans. Afterall, Republicans fought for lower taxes, lower regulations, letting states dictate their regional payrates based upon their localized economies and free and fair trade. All of these issues impacted the bottom line of corporations and in many cases would determine if they were profitable. While Republicans still stand for their principles and believe solidly in ensuring that they are applied, corporations have changed. This change has led corporations to financially back Democrats, and as Democrats decry corporate, PAC and dark money contributions continue to reap in vast amounts of campaign contributions from these very entities.
While it would be easy enough to point to a political shift in leadership within the boardrooms as the reason for this change of allegiance, I believe that it is a problem goes deeper than a mere change of party registration. Mega corporations do not value the same things nowadays. While the Trump tax cuts were a needed boost for midsize and small corporations, they were largely irrelevant for the mega corporation. When a mega corporation is racking up enough loses and write-offs to effectively nullify their tax rates what does it matter where the rate is set. Conversely, a midsized corporation getting a 6 percent reduction in taxes means that they are reinvesting in their company. Adding some protectionist policies to bring countries to the negotiating table to promote free and fair trade definitely helps the little guy be competitive at home, but the mega corporation has zero qualms about off shoring a job to a country where they pay slave labor to produce their product.
While there are a lot of factors at play, the one thing that has created the unholy alliance between Democrats and mega corporations is regulations. Yep, you heard me correctly. Mega corporations love regulations because they are their biggest competitive advantage. Where the big companies have giant legal teams to review, extra bodies to throw at staying compliant and deep coffers to pay fines when they make mistakes, small business does not have this luxury. Regulators can use the weight of government to kill off a small business when they fail to meet the standards of these regulations. Mega corporations are more than willing to allow government to create the hurdles to competition; it is easier to buy your competitor once they go broke than to continuously innovate and create the best product.
Mega corporations have realized that by donating to Democrats they get a seat at the table when it comes to drafting legislation. What better way to ensure that a small company will never take your market share than to help Democrats draft the rules that while easy for your company to handle makes it impossible for a smaller company to compete. In the past, Democratic administrations would be comprised of thought leaders and academia, the Biden administration is almost wholly leveraged from mega corporations bringing in the worst of Big Tech and Wall Street for seats at the table. Large corporations have embraced what would have been considered unthinkable 20 years ago… government control. The Faustian bargain that they have forged with Democrats is that they accept the yoke of government control to limit competition and allow them to pursue globalist policies that screw Americans and they provide Democrats with cover, donations and do the things that government is not empowered to do, like silence their opposition.
The battle for the mega corporations has been lost, but the war will continue to rage. They have moved on from Republicans and we can either hope for the good old days or we can adjust to the new reality. While our positions on economic policy have not really changed, we need to understand that is not true for mega corporations. While they will pay lip service to free and fair markets, they are working behind the scenes with and at the behest of Democrats to ensure our system is anything but, free and fair. These behemoths have grown too large; they wield more power and influence than the majority of countries in the world and they are willing to use that power and influence to tip the scale towards Democrats. This is the reality. While Republicans need to continue to promote policies that allow small and midsized corporations to thrive, they need to be prepared to take on mega corporations when they act in bad faith.
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