basic patterns. There was a gradual recovery in business investment levels starting at the end of the Obama era and continuing in Trump’s first years, owing to a recovery in energy prices and a modest growth in consumer demand (partly fueled by rising consumer debt, it seems). Surveys in 2018 found a significant increase in business “optimism” and plans to hire, and the official unemployment rate dropped to under 4 percent.28 However, corporations continued to keep trillions of dollars out of the real economy, including $2.5 trillion in domestic reserves alone.29 Moreover, they continued to make strategic use of their cash hoards to win policy changes from government. The demands had not changed: more tax cuts, more deregulation, more public subsidies, and more privileges overseas. In return, they promised to invest in the United States.
A preview of the Trump administration’s approach to business came in November 2016, when Trump negotiated an agreement with the Carrier manufacturing company. Carrier and its parent company, United Technologies, had declared that they would transfer over two thousand jobs from Indiana to Mexico. Three weeks after the election, Trump gloated that he had saved over half of those jobs. Carrier’s executives offered a clearer account of the deal, however, explaining that Trump had offered them preferential input in policymaking: “the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive US business climate,” meaning tax cuts and deregulation. Economist Michael Hicks called the negotiation “damned fine deal-making” on Carrier’s part: “The chance for Carrier (and their lawyers) to help craft a huge regulatory relief bill is worth every penny they might save [in exchange for] delaying the closure of this plant for a few years.” The self-styled master of “the deal” had just surrendered to a classic capital strike. He had negotiated a partial postponement of Carrier’s disinvestment and gained a public-relations victory, but only by promising the company future leverage over regulatory policy. Tellingly, the company stressed that the deal had not altered its policy of moving investment overseas: “This agreement in no way diminishes our belief in the benefits of free trade and that the forces of globalization will continue to require solutions for the long-term competitiveness of the US and of American workers moving forward.”30 Its control over its investment capital made it the more powerful partner in the deal.
Other companies quickly followed suit, promising investment in exchange for pro-business reforms from government. Corporate tax cuts remained a central demand. In January 2017 the CEO of AT&T vowed to “step up our investment levels” in exchange for a reduced corporate tax rate. AT&T was not holding back on US investments for lack of capital: it was posting over $1 billion a month in profits. It had also received $38.1 billion in special tax breaks from the government since 2008, more than any other company. But it still was not confident enough.31 Even after Congress slashed the top corporate tax rate from 35 percent to 21 percent in December 2017, the fate of the hoarded cash remained far from certain. Corporations did start to repatriate their overseas money, but spent most of it on stock buybacks and dividends rather than productive investments or wage increases for workers. Business investment levels in 2018 were still much weaker than during the second half of the twentieth century.32
The Trump presidency has thus exhibited the same basic patterns as its predecessors. Corporate representatives have been directly involved in making policy, even more blatantly than in the past.33 Quid-pro-quo deals have traded government handouts to corporations for new investment in the economy, asking government to trust that business leaders will follow through. And the negotiating relationship in those deals has remained asymmetrical, with capitalists free to renege on their pledges. Trump’s own billionaire status and unabashedly pro-business rhetoric mark a partial difference from Obama, but he has remained subject to the same basic parameters and constraints.
Capital and the Origins of Progressive Legislation
Major legislation that challenges corporate profits or power might seem to be a different story, initiated despite business wishes rather than because of them. Many observers regard the signature legislative achievements of the Obama presidency as a reflection of Obama’s electoral mandate and, by extension, the tide of public opinion. And, indeed, insofar as they sought to protect the public from business, the ACA, Dodd-Frank, and climate reform all coincided with majority opinion. However, while Obama’s 2008 election victory and strong public backing played some role, it’s unlikely that any of these bills would have been introduced without at least some support among business leaders.
Healthcare Reform: Setting the Table, Limiting the Menu
The healthcare reform process began in that way. In human terms, the existing system was a catastrophe: 47 million people lacked health insurance and 45,000 died each year as a result. Per-capita healthcare costs were about twice as high as in other industrialized countries yet health outcomes were much worse. A large majority of the public thought the government should ensure universal coverage.34 However, the key impetus for national reform was not mortality rates or public opinion, but business costs. Top corporate leaders outside the healthcare sector had long sought a way to contain the cost of healthcare provision and insurance. They had tried various ways of offloading the rising costs onto their workers: capping benefits, hiring part-timers and subcontractors, or simply slashing coverage.35 But these strategies were insufficient. In the 2000s, health costs galloped far ahead of the overall inflation rate, meaning higher and higher costs for employers. Between 2000 and 2007, employer spending on healthcare rose 87 percent, leading the majority of executives in the Business Roundtable to cite healthcare costs as “the biggest economic challenge they face.”36
As a result, long before the Obama election or even the Democratic victories in the 2006 midterms, the business press was already noting “an ever-louder complaint from U.S. businesses that they can’t compete in a global economy when companies from other countries don’t have to pay for health care,” leading to “the business community’s heightened interest in sweeping change” at the level of government policy.37 Several prominent business-led coalitions centered on health reform were either formed or stepped up their work. The National Business Coalition on Health (NBCH) and the business-dominated National Coalition on Health Care (NCHC) became more visible.38 The business press from the mid-2000s was full of corporate complaints about health costs. Figure 1 shows the number of articles mentioning “health care” in three of the top business magazines in the years 1995 through 2008. The annual average rose from 58 articles in 1995–1999, to 102 in 2000–2004, to 123 in 2005–2008. As with the 2009 stimulus, many business voices called for more aggressive action than what policymakers were proposing. “We don’t see anything in the national debate now that’s big enough or ambitious enough to address the problem,” said the NCHC president in 2004.39
Figure 1 Articles mentioning healthcare, 1995–2008
Source: Based on Business Source Complete database searches for “health care,” excluding duplicates and corrections.
By the mid-2000s the mounting concern over healthcare costs had become a steady complaint among manufacturing and commercial corporations. With increasing frequency, companies threatened
