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The Business-republican Party Relationship Is on the Rocks

The Business-republican Party Relationship Is on the Rocks
Republican President Calvin Coolidge famously said that “the chief business of the American people is business.” It was a slogan that nicely captured the relationship between the Grand Old Party and the American business community for much of the past 100 years.

Republican President Calvin Coolidge famously said that “the chief business of the American people is business.” It was a slogan that nicely captured the relationship between the Grand Old Party and the American business community for much of the past 100 years.

But now, that relationship is soured as Republicans lash out at their corporate benefactors. The attacks range from taking on tech giants such as Facebook and Twitter over their canceling of conservative voices such as Donald Trump, Tucker Carlson and Steve Bannon to blasting old-line companies such as Coca-Cola and Delta over their criticism of restrictive voting laws.

But the most extreme example so far is Florida Gov. Ron DeSantis’ canceling of Disney’s preferred status in the Sunshine State.

Last week, the state’s Republican legislature did DeSantis’ bidding, sparing no time to rubber-stamp a law revoking the special privileges Disney’s Reedy Creek Improvement District enjoys to essentially self-govern its 27,000 acres of theme parks and other properties in central Florida.

Local politicians immediately said the move, which is scheduled to take effect in June of next year, will raise taxes on residents around the Magic Kingdom by as much as $2,000 a year. Disney now provides its own fire, police and other services, which presumably would now fall to Orange and Osceola counties where Disney operates, though the exact particulars are still unclear.

It was a brazen attack on the state’s most powerful company, employer of 80,000 Floridians, and the destination for 58 million visitors a year. But, it was the direct result of the global entertainment colossus speaking out against a law championed by DeSantis that prohibits “classroom instruction by school personnel or third parties on sexual orientation or gender identity” in grade school.

Critics have branded it the “don’t say gay” bill, although the word itself is missing from the legislation. While Disney did not speak out publicly in advance of the bill’s passage, reportedly working behind the scenes with legislators, CEO Bob Chapek did once it was passed.

Chapek said he had reached out to DeSantis “to express our disappointment and concern that if the legislation becomes law, it could be used to unfairly target gay, lesbian, nonbinary and transgender kids and families.”

Since the legislature voted to revoke Disney’s “special privileges,” the company has made no public comment.

DeSantis has been anything but silent. He has made frequent comments about the “leftist agenda” of Democrats who are using corporations to further goals they know cannot be advanced at the ballot box.

“[Disney] pledged themselves to mobilize their considerable corporate resources out of the coffers of this Burbank, California-based corporation to overturn the rights of parents in the state of Florida, and effectively commandeer our democratic process,” he said during an appearance on Fox News’s Tucker Carlson show.

Joe Kilsheimer has lived in central Florida for decades and worked as a reporter at the Orlando Sentinel, then as a public relations consultant. He also served as the mayor of Apopka, a town 12 miles northwest of Orlando that has prospered from Disney’s presence.

“Walt Disney World is the rock upon which modern central Florida is built,” Kilsheimer says. “And the Reedy Creek Improvement District is the rock upon which Disney is built.”

“The impacts are just too many to measure,” he adds, pointing to Disney’s charitable giving in the community and its support of the arts and other activities. “Disney is woven throughout the life we have in central Florida. This is shaking the foundations for short-term political gain.”

While the fracas over sex education in the classroom and Disney has grabbed the recent headlines, the Republican about-face toward big business has been brewing for a while.

One of the first and most significant splits came more than a decade ago over the Common Core State Standards – a set of academic benchmarks for what children should know by the time they finish each grade.

Before denouncing them became a purity test for Republican candidates, the standards were created at the behest of governors – including a handful of Republicans who drove the effort – and business leaders, both of whom were alarmed that the educational establishment was not preparing students for the workforce.

The standards were published in June 2010 and hailed by both parties as a national commitment to improving learning for students – but particularly among Republican governors and the business community as a way to increase the global competitiveness of the U.S.

Leading lights of the GOP establishment praised the effort, including former Secretary of State Condoleezza Rice, Florida Gov. Jeb Bush, and others. The U.S. Chamber of Commerce and the Business Roundtable endorsed the standards, which were adopted by 45 states and the District of Columbia.

“America’s economic strength and standing in the world economy are directly linked to our ability to equip students with the knowledge and skills to succeed in the 21st-century economy,” Bush, who played an outsized role in the creation and adoption of the standards, wrote in a Wall St. Journal op-ed in 2011 with Joel Klein, former New York City Schools Chancellor, who at the time was CEO of News Corporation’s educational division.

“Students are no longer competing with their peers in other cities—they are competing with students across the globe,” they wrote. “Business leaders have become champions of education reform, recognizing the role that rigorous academic standards have on their success.”

But then the Tea Party struck, tying Common Core to the Obama administration and painting it as a part of the nanny state.

Republicans, including Gov. Bobby Jindal of Louisiana, Gov. Mike Huckabee of Arkansas, Gov. Scott Walker of Wisconsin, and Gov. Bill Haslam of Tennessee (one of the most ardent supporters of the standards) were forced to backtrack at the behest of conservative voters who whipped into a frenzy by talk show hosts blasting the Common Core standards as a push by progressives to indoctrinate children.

“This is slavery. They are breeding an entirely new generation of slaves,” conservative radio show host Glenn Beck said on his show in 2013. “These guys who are involved in Common Core are enslaving you to giant corporations and to the states.”

Now, education is a bedrock of the conservative movement, seen in the recent attempt to convince Americans that their kids are being forced to study critical race theory and other teachings that Republicans brand as anti-American.

“CEOs are becoming politically homeless.”

That, along with fatigue over COVID-19 school closures, proved a powerful message for Virginia Gov. Glenn Youngkin in his successful 2021 race.

“The takeaway is that Republican governors are no longer saying the economic issues are going to be as important to us,” says Dan Clifton, managing director and head of Washington research at Strategas Research Partners, an institutional brokerage and advisory firm. “That’s a big change.”

Clifton says “we’re going through a cultural shift in U.S. politics,” driven by the move of higher-income, educated voters toward the Democratic Party and lower-income, less-educated workers forming the bedrock of the modern Republican Party.

As a result, Clifton says, “CEOs are becoming politically homeless.”

Along the way from Common Core to Disney, the anti-business movement within the Republican Party has gathered steam – and topics with which to bash corporations and Democrats.

A review of newsletters sent by Republican members of Congress in late 2020 ahead of the presidential election, and then in July 2021 as executives from top tech firms testified on Capitol Hill, shows increasing mention of the term “big tech.” The GOP also started a group that month called the “Big Tech Censorship and Data Task Force” which coincided with hearings featuring tech CEOs throughout the summer.

One newsletter from Rep. Drew Ferguson, a Georgia Republican, dated Oct. 4, 2021, featured a broad attack on corporate America.

“This year, the MLB (major league baseball) along with CEOs from several Fortune 500 companies have decided to start playing politics, picking and choosing where they’ll do business according to the whims of the woke mob,” Ferguson wrote. “Unfortunately, when it comes to issues of real human rights and genocide, they fall silent. It’s time to hold American organizations and companies accountable for their roles in propping up communist China on the global stage.”

Republicans may be appealing to constituents who have soured on business in recent years. A Pew survey last year found that the share of Republicans saying large corporations have a positive impact in the U.S. declined 24 percentage points from 2019 to 2021, from 54% to 30%.

At the same time, Democrats have become slightly more positive toward corporations during the same period, with those seeing them as positive influences rising from 23% to 28%. “As a result, while there were wide partisan differences in these evaluations two years ago, there is not a significant gap today,” Pew noted.

“The incentives for Republican politicians are different than they were before the Trump era,” says Geoff Kabaservice, vice president of political studies at the Niskanen Center, a Washington think tank. “You not only have to attack Democrats, you have to attack RINOs (Republicans in name only) and corporations.”

Case in point: the state legislator who led the effort against Disney, Randy Fine, said this week on CNBC that “Dems lie, that’s what they do,” branding a group that conducted a sit-in to protest a redrawing of the state’s congressional districts that would remove one with a Black representative “a bunch of thugs.”

Referring to DeSantis’ Disney law, Fine said, “When you are a guest in our state, you need to comport yourself accordingly.”

When Delta Airlines and Coca-Cola spoke out in April 2021 over restrictive voting laws in Georgia, Texas Sen. Ted Cruz was quick to pounce. In an opinion piece written for the Wall Street Journal, Cruz went on the attack.

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“To them I say: When the time comes that you need help with a tax break or a regulatory change, I hope the Democrats take your calls, because we may not,” Cruz wrote in April of 2021. “Starting today, we won’t take your money either.”

None other than Senate Republican Leader Mitch McConnell, who more than just about anyone in the party has nurtured a cozy relationship with business, joined the fray.

“So my warning, if you will, to corporate America is to stay out of politics,” McConnell told reporters at a 2021 news conference in Louisville. “It’s not what you’re designed for. And don’t be intimidated by the left into taking up causes that put you right in the middle of one of America’s greatest political debates.”

Ken Spain, the founding partner of Narrative Strategies and a longtime Republican communications adviser, says: “Republicans and the business community are responding to competing constituencies.”

“The populist wing of the GOP is ascendant and far less sympathetic to business, while large employers are often trying to balance the progressive interests of some of their employees and other stakeholders,” Spain adds. “The one thing that could keep the marriage intact in the short term are the myriad regulatory and legislative policies coming out of the Biden administration.”

McConnell softened his tone the next day, clarifying that he was annoyed that the Georgia legislature was being mischaracterized and did not do what the corporations criticized.

“CEOs, rather than being cowed over the last year, they’ve become more vocal,” says Jeff Sonnenfeld, a senior associate dean at the Yale School of Management and president of the Chief Executive Leadership Institute.

Sonnenfeld points to the long history of corporate involvement in social and political issues, dating to the opposition to apartheid in South Africa in the late 1970s and 1980s, as well as the rapid withdrawal of top companies from Russia following Vladimir Putin’s invasion of Ukraine.

But if McConnell backed off, the message did not get to the rest of the party.

In November, Florida Sen. Marco Rubio gave a speech to the National Conservatism Conference in Orlando, one of many speakers who struck an anti-business tone.

“The first is that any time it (Marxism) appears there are always some who think they can protect themselves from its wrath by cooperating with Marxism,” Rubio told the audience.

“That is why right now big business is all in,” he added. “With major American corporations boycotting states that pass laws which are not ‘woke’ while sending our jobs to a China ruled by a genocidal government. It’s why tech companies…have become enforcers, censoring views they don’t like and silencing those who dare to speak out.”

Sonnenfeld notes that many of the most vocal Republicans criticizing elites and big business are creatures of those very institutions. Cruz and DeSantis, for example, are graduates of Harvard Law School, while DeSantis was an undergraduate at Yale. “These are fake populists,” he says. “They are attacking the institutions that sired them.”

While the moves may seem like a case of the party shooting itself in the foot – not to mention the wallet – it may be smart politics. Conservatives have developed a capability to raise small sums from multitudes of die-hard supporters on social media and may well be less reliant on their traditional support from corporations.

“Certainly, corporate PACs are a diminishing part of candidates’ campaign fundraising, at least on the federal level,” says Zhao Li, assistant professor of politics and public affairs at Princeton University.

And the very nature of businesses has changed. A company like Disney or Coca-Cola is a global enterprise that serves customers and employs workers around the globe. These companies must listen to a diverse group of stakeholders, including shareholders who favor environmental, social and good government policies.

Being seen as a company supporting legislation that is seen as targeting groups on account of their race or sexual orientation is not an option for companies today.

Li says she is hearing conflicting comments coming from Republican quarters, with the firebrand conservatives seeing value in stoking the cultural wars to rally the base and others wanting to maintain ties to their traditional paymasters.