Pro-Business Republicans Are Bad for the Economy

Democrats and center and left commentators must puncture the greatest myth in American politics, where Republicans are most delusional: that they are better at managing the economy.

Republicans bill themselves as the pro-business party. Most CEOs, investors, and entrepreneurs support the Republican Party. In polls, voters consistently rate Republicans higher on the economy.

In fact, Republicans far underperform Democrats on the economy. Since 1945, the economy has grown almost two percentage points a year faster when Democrats hold the White House than when Republicans do. (Today a single percentage point of growth is worth $280 billion.) Since 1989 over 50 million jobs have been created under Democratic administrations versus only 1.3 million under Republican administrations.

Republicans fool themselves (and us) by claiming the “pro-business” label. Now, being pro-business in America is like being in favor of motherhood and apple pie. But Republicans twist the meaning of the word.

For Republicans, “pro-business” means resolving any conflict with workers, consumers, and government in favor of business. So Republicans want to reduce taxes on the wealthy and roll back government regulations. These moves actually hurt the economy.

Republicans say lower taxes will stimulate business investment, but the effect is minimal. Lowering taxes on the wealthy leaves consumers with no more money to buy things. Hence no new business opportunities are created for the wealthy to invest in.

Opposing government regulations means benefitting individual businesses at the expense of everyone else, including other businesses. To set a regulation in the first place, government must gather input from businesses and other stakeholders, and then show that the economic benefits to the country outweigh the cost of compliance.

For example, a pollution control mandate costs certain businesses money (though there are often subsidies and incentives). But keeping people from getting sick and dying more than makes up for it through reduced healthcare costs and higher productivity. If the regulation is repealed, the regulated businesses save money while raising healthcare costs and reducing productivity for everyone else.

Overall government regulators must do a good job, or the U.S. economy wouldn’t be the $28 trillion colossus it is today.

The economy and businesses do best when the interests of the three main actors—businesses, workers/consumers, and government—are balanced. Pro-business Republicans are one-sided and counterproductive. That’s why their economic record is surprisingly bad.

Please forward this to your contacts to build awareness of these ideas.