The outcome of the 2012 presidential elections was widely touted as a win for average Americans and a defeat for big money, which overwhelmingly seemed to back the Republican challenger, Mitt Romney. But the reality is that corporate money followed both parties in that race, and the deciding factor was not the amount but the fact that the GOP’s candidate simply did not match the public’s mood. Romney’s donors erroneously assumed that an extremely conservative and elitist GOP party representative could succeed in 2012, but they turned out to be wrong.
That calculation by the business sector is now changing, and in the process, aligning its immediate interests with the wishes of voters, which can potentially determine who our next president will be.
The tipping point was the government shutdown this year and the subsequent down-to-the-wire game of chicken that our political leaders played over the federal debt ceiling. While the markets shrugged off the threats for the most part, the business sector was still disturbed by how close we came to the edge. Corporate leaders ranging from Starbucks CEO Howard Schultz to JPMorgan Chase CEO Jamie Dimon vented their extreme displeasure with everyone in Washington – but mostly the GOP, in letting this happen. Immediately following this, Ken Cucinelli, the Tea Party favorite in the Virginia governor’s race and the frontrunner, lost the race reputedly due to a lack of financial support from the U.S. Chamber of Commerce and the business sector in general. In another race, Bradley Byrne, a GOP establishment candidate, won an Alabama congressional seat in a runoff against a Tea Party flamethrower, with considerable support from the business community.
The business sector, it seems, is leaning towards moderation, or at least to left of the far right, and that is in keeping with the public sentiment in general. Following the shutdown, the GOP’s disapproval rating rose to 63 percent and even the Democrats suffered with a disapproval rating of 49%. Americans are sick of gridlock and want to see a functioning government. That cannot happen with extremist politics (from either side), and that is what both voters as well as the business community are repudiating. This trend is likely to continue through the midterms and will accelerate as the next presidential election nears, and will put Republican candidates like Governor Chris Christie into a well-deserved spotlight
It will also, on the Democratic side, bolster the potential of the highly pragmatic and experienced Washington player Hillary Clinton. While there are rumors that Boston’s favorite daughter Senator Elizabeth Warren, who is an outspoken critic of Wall Street and the business sector in general and has crusaded against corporate abuse for most of her career, might challenge Hillary for the nomination, it is unlikely that it will come to pass – if for no other reason than it would split Democratic loyalties at a moment when the party must present a united front against the GOP. In addition, Senator Warren’s stormy relationship with the business sector could lose the party valuable support from that side.
The business sector tends to vote its pocketbook and so the Republican platform of low taxes and less regulation usually trumps the Democratic platform. However, what the races in Virginia and Alabama illustrate is that fiscal conservatism alone cannot win the day (if the Tea Party really had its way, there would no taxes or regulation at all). Even the profit-motivated business community realizes the necessity for some type of balance and by putting its money behind that philosophy, can help to make that a political reality for America. The last presidential election was the most expensive in our history and most of the money for both parties came from large corporate donors. The next race is likely to be even more expensive and once again, donations from the business community will form the bulk of the fuel. Only this time, the business sector is more likely to fund centrist candidates who can help shepherd us back towards something of a center, and political sanity.
That is a good thing.
Bio: SANJAY SANGHOEE is a political and business commentator. He has worked at leading investment banks Lazard Freres and Dresdner, as well as at multi-billion dollar hedge fund Ramius. His opinion pieces have appeared in FORTUNE, Bloomberg Businessweek, Christian Science Monitor, and Huffington Post, and he has appeared on CNBC’s ‘Closing Bell’, TheStreet.com, and HuffPost Live on business topics. He is also the author of two thriller novels. For more information, please visit http://www.sanghoee.com