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Big Business vs. the GOP

David Callahan

Once upon a time, it was a given that Republicans were the friends of business. Lately, though, the picture has grown far murkier. While Congressional Republicans are still the dutiful servants of business on any number of issues, such as their endless campaign to gut Dodd-Frank, the past five years has seen a growing chasm between big business and the new libertarian populist right that commands the heart of the Republican Party. 

Think about: If the libertarian right had had its way, there would have been no TARP to bailout Wall Street and avert a much bigger financial crash. Most  business leaders supported TARP; many leading Republicans did not. 

Most top corporate leaders also favored a major stimulus package in 2009, backing the consensus of mainstream economists that government spending should make up for reduced demand. Not a single House Republican voted for that stimulus package. 

Most corporate leaders favor a balanced approach to deficit reduction that combines new taxes with spending cuts. Yet every Republican candidate in 2012 famously said they would reject even a 10-to-1 ratio of spending cuts to tax hikes. 

Most corporate leaders think it's madness to play politics with the debt ceiling. Yet this has become a standard tactic for the House GOP. 

And now comes the immigration debate. Even as big business, and particuarly Silicon Valley, lines up behind immigration reform that includes a path to citizenship, House Republicans seem nearly certain to kill the best chance at reform in years. 

One reason for the growing division between Republicans and business is that the GOP base has little in common with America's corporate leadership class. The base voters tend to live in rural, small-town, or exurban America, and typically don't have professional degrees. Today's business elites tend to have MBAs and JDs and work in glass towers in major cities. 

Much has been made of the growing division between "metro" and "retro" America -- the cosmopolitan blue parts of America and the red heartland. 

But it's seldom noted that most corporate leaders are firmly part of "metro" America. So, yes, the GOP and big business have a marriage of convenience on a great many issues, particularly those involving regulation. 

Culturally, though, these two groups have less and less in common. They are headed in different directions and that divergence has big implications for American politics over the long term.