Roundtable Syndrome And The Paradox Of American Democracy

David Leonhardt notes that most of the business groups pressing for deficit reduction are also, in practice, calling for massive increases to the deficit via a combination of giant tax cuts and modest spending increases. For example:

Last year, the Business Council — a group of top corporate executives headed by Jamie Dimon of JPMorgan Chase — and the roundtable released a 49-page plan that simultaneously warned that projected deficits would “retard future growth” and called for policies that would add hundreds of billions of dollars a year to the deficit. That’s the essence of roundtable syndrome. When I ask roundtable officials and other lobbyists about this contradiction, they show an impressive ability to avoid specifics and stick to their talking points. Mr. Engler, by e-mail, said, “A simpler, flatter tax system can be enacted in a fiscally responsible manner that better serves American workers and supports economic growth.”

So do business lobbies support tax reform that would eliminate deductions to raise more revenue in an efficient way? Well, no: “It’s pushing for tax cuts for its members: a lower rate, the continuation of existing loopholes and the creation of new ones, like a permanent credit for research and a tax holiday for overseas profits.”

John Judis’ The Paradox of American Democracy: Elites, Special Interests, and the Betrayal of the Public Trust is ten years old at this point but still one of the best books to read to understand the current political situation. Judis traces the rise and fall of the idea of a disinterested business elite that was capable of focusing on the idea that if America did well, that rich businessmen would also benefit. That’s supposed to be the idea of something like a Business Roundtable rather than just individual firms having lobbyists. Qua firm, of course each firm wants handouts and breaks. But business as such can be seen as having an interest in a strong, prosperous America. But the present-day versions of that kind of thing—and especially the US Chamber of Commerce—instead function as force multipliers for rent-seeking and interest groups favors. The big question of Obama-era politics, in my mind, is why there isn’t any meaningful pressure from non-financial firms to generate full employment and decent financial regulation. The “roundtable syndrom” Leonhardt identifies on the deficit is just one symptom of the broader trend Judis diagnosed.