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Big Biz Bails on Bush?

Posted By Barry Ritholtz On October 28, 2004 @ 7:20 am In Politics | Comments Disabled

“If President Bush loses on Nov. 2, the finger-pointing among Republicans will begin immediately. Some may ask whether corporate America did its part. “The business community has to recognize that the public-policy arena is a very competitive place,” says Mr. Fuller. “If you aren’t going to participate fully, you aren’t going to get results that are very satisfactory.”

Indeed. We continue to observe a number of demographic groups slipping from the incumbent’s grasp: Cubans, Arab Americans, Hispanics, Soccer moms [1] — even conservative states such as Coors hometown, Colorado [2], is in the swing column.

How did the GOP let these traditional strongholds slip from their grasp? Alan Murray of the WSJ [3] notes the deafening silence from big business as one possible factor:

“President Bush holds a lead of less than three percentage points among “likely voters,” according to an average of recent national polls. Some Republican strategists worry that isn’t enough to offset a potent mix of antiwar warriors, anticapitalism capitalists and organized labor working night and day to turn out legions of new voters.

The counterbalance to the [left leaning 527 donors] of course, should be the hordes of American business leaders who support capitalism and limited government, who have benefited handsomely from the policies of this administration and who would like to see George Bush re-elected. Where are they? Surprisingly quiet.

It is one of the great ironies of Election 2004. Mr. Bush’s opponents attack him daily for being the tool of big business. But big business is hardly heard.”

Why is that so? Say what you will about the colder aspects of the markets, but at its heart, modern capitalism is a meritocracy. Why would the business community endorse an administration that by all measures appears to be bumbling incompetants?

Maybe its the economy. After all, the recovery has been feeble, and executives are loathe to put their quarterly numbers at risk. But I doubt that’s it. Corporate America’s balance sheet is in the best condition it been for years. Debt has been refinanced, profitibility is very high.

So what then? So far, we have heard that the new campaign finance rules have kept corporations sidelined to some extent. Others blame the trial lawyers, and even Eliot Spitzer (where are the Law & Order Republicans when you need them?)

Perhaps there’s another reason: It’s just bad business publicly backing Bush.

Look at the Sinclair debacle. Shareholders punished the stock. Fund managers screamed at their self-indulgent politicizing of shareholders assets. Calls for an FCC investigation have been made, shareholders law suits have been filed, and there is a grassroots movement to publicly challenge their licenses the next time they come up for renewal.

The bottom line is, well, the bottom line.

And it appears in an evenly divided nation, alienating exactly half of your clientele is simply bad business.

UPDATE: October 28, 2004 10:04
Just noticed that The New York Times has a related story: Private Political Donations Can Carry a Business Price [4]
More of the same . . .

Cubans, Hispanics, Arabs: Are Key Demographic Shifting Party Affiliation? [1]
Barry Ritholtz
The Big Picture, Thursday, October 21, 2004


Wary Big Business Is Loath to Speak On Bush’s Behalf [3]
By Alan Murray
The Wall Street Journal, October?26,?2004;?Page?A4


Private Political Donations Can Carry a Business Price [4]
Glen Justice
New York Times, October 28, 2004


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/10/big-biz-bails-on-bush/

URLs in this post:

[1] Cubans, Arab Americans, Hispanics, Soccer moms: http://bigpicture.typepad.com/comments/2004/10/arabs_hispanics.html

[2] Colorado: http://bigpicture.typepad.com/comments/2004/10/can_colorado_sw.html

[3] WSJ: http://online.wsj.com/article/0,,SB109874306239655206,00.html

[4] Private Political Donations Can Carry a Business Price: http://www.nytimes.com/2004/10/28/politics/campaign/28donor.html?ex=1256702400&en=fe9205cd299c9114&ei=5090&partner=rssuserland

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