TEXT OF COMMENTARY
Kai Ryssdal: It’s going to be pretty interesting if the president does pick a business-type to replace Larry Summers. Because at some point private spending — that is, private corporate spending — is going to have to replace all the government money that’s supporting the economy right now.
Commentator Robert Reich says what happens in Washington over in the next couple of years will depend on which kinds of businesses get the most political clout.
Robert Reich: Some giant American corporations depend on a buoyant American economy and a world-class industrial base in the United States. That’s because their business strategy is built around U.S. consumers.
A second group of companies are gleaning substantial profits from their overseas operations — especially China, India and Brazil.
Now, not surprisingly, this second group is doing far better than the first, because American consumers are reluctant to spend, while China, India and Brazil are spending like mad.
What does this mean for politics? In my experience, big companies most dependent on American consumers are also most supportive of expansive fiscal and monetary policies. These policies cause unemployment to drop and wages to grow, and thereby get Americans consuming again.
Companies in this first group are also less obsessed by inflation and deficits. And they’re more likely to support new investments in infrastructure and education, which improve the productivity and earnings of Americans over the longer term.
Yet more and more American companies are moving into the second group, that get their profits overseas — because that’s where the money and the markets are.
Years ago, the business roundtable consisted mostly of big American corporations that were indubitably American, and took largely progressive positions on U.S. jobs and wages. I recall working with the National Association of Manufacturers to improve U.S. education and job training, which was one of their major goals. The American Electronics Association pushed the Reagan Administration for an industrial policy to preserve and enlarge the industrial base of U.S. computing.
But now that big American corporations are going global as fast as they can, we’re losing companies that champion the American economy and American workers. This may be good for their shareholders. But in a Washington ever more susceptible to corporate money and influence, the trend is not necessarily good for most Americans.
Kai Ryssdal: Robert Reich was the secretary of labor for President Clinton. His new book is called “Aftershock: The Next Economy and America’s Future.”
David Frum will be here next week at this spot in the broadcast.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
