America’s chief executive officers can’t relish taking on the Republican Party.
After all, a lot more of them are Republicans than Democrats. Republicans push for lower corporate taxes while Democrats do the opposite—witness President Joe Biden proposing to pay for his infrastructure bill in part with an increase in the corporate tax rate. Republicans don’t much care how much CEOs make; Democrats do. For years, the Chamber of Commerce backed Republican candidates and Republican legislation almost exclusively with nary a complaint from its big business membership.
Yet here we are.
In the last 48 hours, big important U.S. companies such as Delta Air Lines Inc. and JPMorgan Chase & Co. have loudly denounced the attack on voting rights in the wake of a Republican-sponsored law in Georgia that makes casting a ballot more difficult, especially for Black citizens. After 72 Black executives signed an open letter calling on corporate America to take a strong stand on the issue—similar bills have been introduced in 43 states—several CEOs did just that.
In early January, dozens of business leaders condemned the assault on the U.S. Capitol and vowed to withhold campaign contributions from those Republican legislators who declined to affirm Biden’s victory in the presidential election. After George Floyd’s death in police custody in Minneapolis, companies large and small openly supported the Black Lives Matter movement, promising to seek greater diversity in their hiring practices and to back efforts to eliminate systemic racism.
Did CEOs applaud the corporate tax bill that reduced rates from 35% to 21% in 2017, which was pushed through by Republican majorities? You bet they did. But that didn’t stop many of them from criticizing President Donald Trump’s immigration policies, not to mention his defense of white nationalists after a rally in Charlottesville, Virginia, turned violent. Merck’s Kenneth Frazier, one of the country’s few Black CEOs, pointedly stepped down from a Trump advisory council. “As a matter of personal conscience,” he said, “I feel a responsibility to take a stand against intolerance and extremism.”
One more step back: to the bathroom bill that North Carolina Republicans passed in 2016, the one that required transgender people to use public bathrooms that corresponded with the sex on their birth certificate rather than their gender identity. After businesses froze expansion plans and companies and sports organizations like the NCAA boycotted the state, the legislature passed a different bill within a year—one without the bathroom requirement.
Do you remember when prominent television advertisers such as Procter & Gamble Co. would pull their ads from shows that were even slightly controversial? Companies didn’t want to be seen as even implicitly taking sides for fear of alienating potential customers. In Washington, and in statehouses around the country, companies lobbied for measures that would help their businesses (or hurt their competitors) while carefully avoiding the country’s larger social issues.
So what changed? The most important difference is the Republican Party itself. Most executives who lean to the right view themselves more in the mold of George H.W. Bush than, say, Senator Ted Cruz of Texas. Moderate Republicans may be nearly extinct on the Senate floor, but they still dominate executive suites. The extremism of the modern Republican Party is so far outside the norm that executives feel they have no choice but to speak out.
Then again, the modern Republican Party doesn’t much care about business, not the way it used to. Republicans tried to get rid of the U.S. Export-Import Bank, which companies such as General Electric Co. and Boeing Co. relied on to complete international deals. They heard chronic complaints about “crony capitalism.” The immigration restrictions favored by Republicans have hurt hundreds of companies. When Trump lashed out at companies, no prominent Republicans came to their defense. Once upon a time, the Republican base was businesspeople; now it’s Trump supporters.