By David K. Shipler
Somewhere between the reverence for private business and the excoriation of capitalism there must be a middle ground where the virtues of free enterprise are recognized and its menaces are contained. Finding that territory of moderation seems especially difficult today, as President Trump and the Republican-led Congress move to unchain corporations from the taxes and the regulations that protect social justice, consumer interests, worker safety, and the environment. Meanwhile, the incipient revolution against corporate villainy, now led by Senators Bernie Sanders and Elizabeth Warren, remains alive but marginal.
So Washington, for the moment at least, has a government of, by, and for the corporate elite, which was hardly enthusiastic about the Trump candidacy. That is the irony of Trump: a rich entrepreneur stirring up resentment toward powerful business, a splashy spendthrift touting himself as the voice of the “forgotten” struggling blue-collar class, which still approves of him after a year of getting nothing except slogans and wishful thinking.
The wishful thinking relies on an old myth about business, which has two main parts. First, the notion that reduced corporate taxes will liberate cash to flow to workers, in the form of higher salaries and employment rates, has been a matter of debate for decades between conservatives and liberals. Despite the paucity of evidence from the past, conservatives insist that liberating private companies will boost the overall economy by enhancing capital investment. Liberal economists, by contrast, tend to see the gains going to the wealthy stockholders. Companies are expected to increase dividends and buy back shares, which will raise stock prices.