Republicans are getting a lot of pressure from business, which doesn’t like what’s happening. And some pundits are already speculating about the possibility either of a split within the GOP or a kind of coup in which the business-backed party elders take control back from the crazies.
So I’ve been thinking about this, and have managed to convince myself that it’s wishful thinking.
Now, it’s true that Republicans are bad for business — and they didn’t start being bad for business when the latest hostage crisis erupted. Ever since Republicans retook the House, federal spending adjusted for inflation and population has been dropping fast:
This is exactly the wrong thing to be doing in a still-depressed economy with interest rates at zero; my back of the envelope says that GDP would be at least 2 percent higher, and corporate profits at least 6 percent higher, if this wrong-headed austerity weren’t taking place. So even before the current crisis Republican obstructionism was costing corporate America a lot of money.
But here’s the thing: while the modern GOP is bad for business, it’s arguably good for wealthy business leaders. After all, it keeps their taxes low, so that their take-home pay is probably higher than it would be under better economic management.
Also, when you make as much money as the 0.1 percent does, it’s no longer about what you can buy — it’s about prestige, about receiving deference, about what Tom Wolfe (in an essay I haven’t been able to find) called “seeing ‘em jump.” And there’s clearly more of that kind of satisfaction under Republicans; under Democrats, as Aimai at No More Mister Nice Blog points out, tycoons suffer the agony of having to deal with people they can’t fire.
In a way, this is an inversion of the usual argument made by defenders of inequality. They’re always saying that workers should be happy to accept a declining share of national income, because the incentives associated with inequality make the economic pie bigger, and they end up better off in the end. What’s really going on with plutocrats right now, however, is that they’re basically willing to accept lousy economic policies from right-wing politicians as long as they get a bigger share of the shrinking pie.
This may sound very cynical — but then, if you aren’t cynical at this point, you aren’t paying attention. And I suspect that the GOP would have to get a lot crazier before big business bails.