As the legal and political shenanigans unfold around Donald Trump and Joe Biden, we should not forget that the business of America is business.
Now that we are in what pundits call “the silly (election) season,” the corporate sector is wondering what a Biden second term might mean for their bottom line. If Biden faces Trump in the presidential election, as is expected, CEOs, investors, entrepreneurs and Wall Street will be watching with keen interest.
Trump’s business agenda is simple and predictable: roll back regulation and decrease taxes. The past will be prologue. Biden’s is more complex — a combination of accommodations to labor, Big Tech and clean-energy interest groups.
A denizen of corporate-friendly Delaware, Biden was expected to be one of the most pro-business Democrats in recent years. Yet four years later, his record toward business has been mixed.
The president hangs his reputation — and his chances for reelection — on economic recovery. He cites the American Rescue Plan Act, a $1.9 trillion stimulus, the Bipartisan Infrastructure Act, and the Inflation Reduction Act, among others, as evidence of his success in leading the economic recovery.
Inflation and interest rates are coming down, jobs are up, and the supply chain has been restored, for the most part. And, according to several leading economists, America’s economic future looks brighter.
But the scenario has been anything but rosy. And many Americans are not buying the Biden narrative.
The president’s willingness to raise corporate taxes to fund infrastructure and social programs does not sit well with business interests. His pro-labor, pro-union positions have corporate leaders skeptical of his understanding of what it takes to protect and preserve the interests of U.S. companies. And then there are the climate tech subsidies, which are seen to undercut other engines of growth.
Biden’s bouts against Big Oil have seemed tone deaf, and are among his biggest unforced errors. Today, the oil and gas industry is experiencing strong growth and earnings, while the green energy movement has hit a plateau. This, despite his alliance with extreme environmentalists and total embrace of the Green New Deal.
When it comes to regulation, President Biden needs to chart a new path. As American companies are facing mounting competition throughout the globe, they are also facing more regulation at home. From the Department of Justice and the Federal Trade Commision to the Federal Communications Commission and the Securities and Exchange Commission, the Biden administration has shown a propensity for more, not less, regulation. This is especially burdensome on small and minority business — a constituency Democrats have courted with some success in the past.
The administration’s critical scrutiny of mergers throughout the past four years cannot be overlooked. Several of their merger reviews have been extraordinarily intense, leading to unwarranted and unnecessary conditions and delay, if not outright denial.
If Biden wants to regain — or gain anew — the trust of business, he should start with an agenda that prioritizes fair regulation, free competition, and unfettered growth for American companies. Government should do its best to get out of the way.
That means rational rules by the SEC on climate disclosures and crypto. It means a realistic review of the FCC’s limits on broadcast ownership and net neutrality. And it means a responsible, self-regulatory approach by the executive branch on artificial intelligence and other technology.
When it comes to the societal issues impacting business, Biden needs to find a third way. The case against ESG investments, diversity, equity, and inclusion (DEI) policies and other progressive demands are now metastasized in courts and legislatures throughout the country. Doubling down on his support for these policies gives no cover to corporate leaders who are balancing competing interests; data suggests that companies do not want to abandon their voluntary initiatives wholesale, but also need to rebalance the scales in light of conservative push-back.
Companies need in-the-moment leadership, not laissez faire legacy on the consequential issues facing them today. The president and his business policy advisers need to focus on what matters most to the millions of small- and medium-sized businesses in America if he is going to be competitive.
To be sure, Biden’s support for infrastructure, broadband and clean energy are net positives based on principle. But if there were ever a time when pragmatism should trump dogma, this is it.
Adonis Hoffman is CEO of The Advisory Counsel LLC. He served in senior roles in the U.S. House of Representatives and at the FCC and as an adjunct professor at Georgetown University.