As Sean Trende and others have noted, middle- and working-class voters did not turn out for Mitt Romney in the 2012 presidential election in the numbers that Republican leaders had expected. In the eyes of many of these once-Republican-leaning voters (including former Reagan Democrats), the GOP appears to be too closely linked to “big business.” In response, many conservative thinkers have called for a more populist GOP, oriented toward the middle and working classes and distant from corporate elites.
It is time to reexamine the relationship between big business and the American center-right. While corporate America has a close relationship with the Republican party generally, its engagement with American conservatism is fraught with complications. Business leaders and conservatives often join forces for pragmatic gain on significant issues such as Obamacare, taxes, trade policy, cap-and-trade proposals, and other environmental and government regulations. This issue-by-issue alliance is tactically useful to both groups and no doubt will (and should) continue.
Republicans as a party, however, and conservatives specifically, should not be subservient to corporate interests on core issues. The American electorate must come to view Republicans as the party of the middle class rather than the courtiers of big business. The GOP “brand” must change. While conservatives and business will remain part of a broad center-right coalition, the key question is: On what terms, and who calls the shots?
Let’s review some history. In 1980, as conservatives rallied to Ronald Reagan, many corporate leaders were enthusiastic supporters of former Texas governor John Connolly for the GOP presidential nomination; Connolly was a former conservative Democratic politician who looked and talked like a CEO. Others liked Senator Howard Baker and George H. W. Bush. Mindful of the Goldwater defeat, all these business leaders saw Reagan as too conservative to win. Most CEOs were more comfortable with a mainstream candidate closer to the political center.
One of the big internal fights in the Reagan administration pitted business interests against national-security conservatives. In the 1970s, hundreds of major corporations as well as the U.S. Chamber of Commerce and the National Association of Manufacturers had joined to form a private pro-trade group, the U.S.-USSR Trade and Economic Council (USTEC). While conservative hawks wanted to curb the flow of military-use items to Communist countries, USTEC lobbied to remove barriers to Soviet trade. The group opposed, for example, the Jackson-Vanik amendment, which placed trade limits on certain Communist-bloc countries that restricted emigration, as the USSR did with Jews and Evangelical Christians.
Cold War ancient history, you say? Okay, let’s go back to this summer and look at a crucial domestic- and constitutional-policy issue. In July 2013, House Republicans voted to remove some federal mandates in the No Child Left Behind Act and empower the states to formulate their own accountability systems and curricular standards. Strong opposition to this federalism-affirming legislation came from every Democrat in the House, the Obama administration, an array of leftist groups (including the ACLU, the Children’s Defense Fund, the National Education Association, the Center for American Progress Action Fund, and the Southern Poverty Law Center) and also from business interests led by the U.S. Chamber of Commerce and the Business Roundtable. Former Reagan education official Chester Finn Jr. rebuked the two business groups for their stance: “Both . . . joined the left . . . in savaging the Kline [House Republican] bill and demanding more federal regulation and control of education. . . . I suppose this is yet another sad example of corporate America succumbing to big-government-itis.”
In fact, since the days of Theodore Roosevelt and Progressive theorist Herbert Croly over a hundred years ago, business has done well enough working with the regulatory forces of the administrative state. As Milton Friedman often remarked, corporate executives are not fans of the free market. They are often involved in “rent-seeking” behavior, lobbying the federal government for special privileges at the expense of others.
Not only will corporate America readily depart from conservatives on a matter such as state control of education, it also appears to have little use for the various other constituencies within the conservative coalition. Social conservatives advocating life, pro-family policy, and religious freedom; national-security conservatives defending American sovereignty, arguing for a strong military, and working to meet the challenges of China and radical Islam; national-cohesion conservatives aiming to curb racial, ethnic, and gender preferences and the pernicious ideology of multiculturalism; and free-market conservatives fighting statist measures – all these find that business leaders are often either indifferent to their concerns or lined up on the other side of the barricades, alongside the forces of the leftist establishment. Better to shun supposedly extreme right-wing ideologues than challenge liberal orthodoxy.
A major weapon in the Left’s continuing campaign to “fundamentally transform America,” as Candidate Obama so memorably promised to do, is what I call the coercive diversity project. This is the ongoing effort to use federal power to impose proportional representation along race, gender, and ethnic lines in all aspects of American life. If women, for instance, constitute 50 percent of the work force, then 50 percent of engineers, doctors, accountants, etc., should be women. Ensuring that each group is represented in each endeavor in the correct demographic proportion would require a degree of government coercion incompatible with a free society. Yet, with strong support from the business community, the coercive diversity project has advanced steadily for decades. Little by little, race- and gender-based preferences and quotas have replaced the original affirmative-action goal of achieving colorblind and gender-neutral equality of opportunity.
Corporate America was present at the creation of the coercive diversity project. Business executives provided funds and political support and collaborated with activists in promoting “diversity.” Most significantly, they helped blunt opposition from principled conservatives.
In The Diversity Machine, sociologist Fred Lynch details how corporations teamed up with progressives to fight the Reagan Justice Department’s attempt to end group preferences based on race, ethnicity, and gender. Attorney General Edwin Meese met strong resistance from the business community. The Reagan administration surveyed 127 chief executives of large corporations and found that 95 percent “planned to use numerical objectives to track the progress of women and minorities . . . regardless of government requirements.”
When Ward Connerly led a series of successful statewide referenda opposing the use of group preferences in education and employment, business interests fought him at every turn and poured money into the leftist campaigns to stop his efforts. After his successful initiative in the State of Washington in 1998, Connerly wrote: “The most significant obstacle we faced in the Washington campaign was not the media . . . but the corporate world. . . . Boeing, Weyerhaeuser, Starbucks, Costco, Microsoft, and Eddie Bauer all made huge donations to the [opposition]. . . . The fundraising was spearheaded by Bill Gates’ father, Bill Gates, Sr., a regent at the University of Washington whose famous name seemed to suggest that the whole of the high-tech world was solemnly shaking its head at us.”
In the most significant Supreme Court case on the coercive diversity project, Grutter v. Bollinger, in 2003, corporate America weighed in heavily on the side of mandated proportional representation and racial preferences. Sixty-five Fortune 500 companies (including Coca-Cola, Dow Chemical, DuPont, Eli Lilly, Intel, Johnson and Johnson, Procter and Gamble, Sara Lee, Texaco, Microsoft, Eastman Kodak, Pfizer, and United Airlines) submitted an amicus curiae brief in support of the University of Michigan Law School’s affirmative-action admissions program, which was being challenged by Barbara Grutter, a white woman whose law-school application the school had denied. The majority (5–4) decision, written by Justice Sandra Day O’Connor, cited the Fortune 500 brief as evidence that major American businesses had made it clear that they supported the diversity project.
I have been using the term “corporate America,” but this moniker is something of a misnomer in an age when executives are increasingly “post-American” and major businesses almost always identify themselves as global ventures. Not untypical are comments from the vice president of Coca-Cola, who said in a speech in 2005, “We are not an American company,” and from a top Colgate-Palmolive executive, who in 1989 said, “There is no mindset [at Colgate] that puts this country [the United States] first.”
Speaking to Atlantic reporter Chrystia Freeland in 2011, a U.S.-based CEO of one of the world’s largest hedge funds described an internal debate at his company. One of his senior colleagues had suggested that the “hollowing out of the American middle class didn’t really matter,” the CEO told Freeland, adding: “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and [that] meanwhile means one American drops out of the middle class, that’s not such a bad trade.” Almost a decade ago, Samuel Huntington identified this trend as the “de-nationalization” of American corporate elites. The new “economic transnationals,” he said, are the “nucleus of an emerging global superclass.”
Not surprisingly, the Chamber of Commerce and leading corporations are currently supporting the U.N. Convention on the Law of the Sea (UNCLOS), a treaty strongly opposed by Senate conservatives, who argue that UNCLOS would undermine American sovereignty and establish a global regulatory system in which the U.N. would receive direct tax revenues for the first time. Corporate elites approve the global regulations in the treaty because these regulations, they believe, would be good for business.
All too often, the interests of corporate elites overlap with those of high-profile Republican donors and lawmakers. The foremost example of this connection is Carlos Gutierrez, George W. Bush’s former secretary of commerce and the ex-CEO of the Kellogg Company. With fundraiser Charlie Spies, Gutierrez has founded a super PAC, Republicans for Immigration Reform, and through TV appearances and op-eds he has become a major spokesman for the push for amnesty and low-skilled mass immigration. Gutierrez fits Huntington’s “economic transnational” profile rather well. As Bush 43’s commerce secretary, he was the major proponent of the North American Security and Prosperity Partnership (SPP), which sought to increase “economic integration” between the United States, Mexico, and Canada. The SPP also called for the “harmonization” of security and customs regulations “in all three countries” in order to speed up border crossings – which would have made American border security dependent on Mexican and Canadian personnel and practices.
Today, Carlos Gutierrez is vigorously campaigning for the mass immigration of low-skilled workers. A few years ago, however, his goal was equally globalist: a transnational labor force for North America. Under Gutierrez’s leadership, the SPP in March 2006 included in its list of priorities the effort “to formalize a transnational technical labor force that could work in any North American country on a temporary basis.” Understanding the effect this would have on the standard of living of American blue-collar and white-collar workers was not then, and is not now, on the high-priority list set by Gutierrez and his colleagues in the corporate–Republican alliance.
American conservatism has in the past few decades become an ever more robust coalition of populist “non-conformist dissenters”: free marketers, social conservatives, national-security hawks, national-cohesion conservatives, patriotic libertarians, etc. Analogous to 18th-century British Whigs, these dissenters are united in their non-conformity to the “established church” of 21st-century America and its prevailing progressive orthodoxy. On the other hand, American business and its GOP allies who do not look beyond “economic man” either silently accept or actively approve the dogmas of progressive orthodoxy – the diversity project, multiculturalism, radical feminism, globalism, mass immigration, environmentalism, and all of the progressive social issues.
Immigration politics is at the heart of the divide between conservative populist groups, on one side, and corporate elites within the GOP on the other. Senator Jeff Sessions of Alabama wrote a memo in July to his fellow Republican lawmakers, calling on them to “flip the immigration debate on its head.” At National Review Online, Sessions urged the GOP to “adopt a humble and honest populism” and distance itself from “the corporate titans who believe the immigration policy for our entire country should be modeled to pad their bottom line.”
The GOP lost the 2012 election, Sessions said, “because it hemorrhaged support from middle and low-income Americans of all backgrounds,” and the party must now mount an “unapologetic defense of working Americans.” He noted that Americans oppose by a two-to-one margin increasing low-skilled immigration and also strongly oppose any legalization of illegal immigrants before border security is in place. Sessions made the key political point that Republicans have a golden opportunity to appeal once again to Reagan Democrats, who are, as John O’Sullivan put it in a statement lauding Sessions, an “electoral bloc that dwarfs any other in numerical terms.”
Two preconditions of populist ascendancy are already emerging in embryonic form: first, a Sister Souljah–style rebuke of corporate elites and, second, the development of policy measures aimed specifically at supporting the middle and working classes. To the first point, Sessions on Labor Day chided pro-immigration-reform business groups and pointedly raised the issue of American patriotism, asking, “What is the loyalty a nation owes to its own citizens?” On the second point, conservative policy intellectuals as well as elected officials such as Senator Mike Lee of Utah are beginning to formulate policy initiatives focused on strengthening the middle and working classes.
Barack Obama’s most effective campaign argument in 2012 was that Romney represented corporate America while the president and his party were fighting for ordinary Americans. Immigration is the first issue on which to turn this accusation back against Democrats and seize the moral high ground by speaking up for the real underdog, the American worker. Let us begin the re-branding, as Jeff Sessions suggests, with conservatives and the GOP vigorously and unapologetically opposing all legislation that increases low-skilled immigration and denouncing “comprehensive immigration reform” for what it is: class warfare waged by an unholy alliance of Obama, progressive elites, and big business against the well-being and way of life of the American middle and working classes.
— John Fonte is a senior fellow at the Hudson Institute and author of Sovereignty or Submission: Will Americans Rule Themselves or Be Ruled by Others?