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Trump’s corporate trouble: CEOs keep their distance from the party of business

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When Donald Trump accepted the Republican party’s presidential nomination in 2016, he touted his credentials as an executive who understood how to create jobs.

“I have made billions of dollars in business making deals — now I’m going to make our country rich again,” the property developer turned television star declared, pledging to make the American brand as great (again) as he had made his own.

It was a rare theme the iconoclastic candidate shared with two of his most recent Republican predecessors — Mitt Romney, who co-founded the private equity group Bain Capital, and George W Bush, whose oil industry career prompted magazines to dub him “the CEO president”.

It was also in keeping with a Republican party that had for decades pitched itself as the natural party of business, espousing low corporate taxes, deregulation and free trade.

But in 2020, as Mr Trump faces a bruising re-election battle against the life-long Democratic politician Joe Biden, a significant number of corporate America’s leading voices are being raised against him. Angered by his management of the coronavirus pandemic and attempts to sow doubt about the election, some executives are now speaking out.

As Joe Biden, left, and Donald Trump, battle to become the next US president, some Republican business leaders are reconsidering their historic allegiances © Oliver Douliery/Pool/AFP/Getty

The Republican party has long grappled with a division between its establishment wing and a more populist base, but that split is becoming ever harder to manage. The growing rift between US business elites and the anti-elite president could spell longer-term trouble for the GOP.

It might be too early to predict a lasting realignment of corporate America’s political allegiances, but Jeffrey Sonnenfeld, a Yale School of Management professor, doubts that the Republicans can continue to accommodate a “pro-expertise” corporate cadre alongside its “rural, anti-intellectual conspiracy group” for much longer.

“What is hard to imagine is that after next week the two-party system will be the same,” he says.

The brewing clash came to a head this week when Mr Trump claimed it would be “totally inappropriate” for election officials to keep tallying ballots after next Tuesday’s election day.

Early voting in Lawrenceville, Georgia. The president’s attempts to undermine postal ballots have sown doubt in the minds of some previous business supporters © Elijah Nouvelage/AFP/Getty

Within hours, Washington’s top business lobby groups joined forces with a statement contradicting him. In the midst of a pandemic that has prompted millions more voters to request mail-in ballots, the groups noted that counting all the votes could take weeks. They urged all Americans to support the process and remain confident in the country’s tradition of fair elections.

The neutrally worded statement followed sterner warnings from investors, academics and executives of the potential for electoral chaos and the importance of a previously unquestioned peaceful transfer of power. One chief executive, David Barrett of the software group Expensify, told his 10m customers that “anything less than a vote for Biden is a vote against democracy”.

Breaking cover

Most chief executives have kept their voting intentions to themselves but concern about the impact a contested result could have on a polarised workforce and a pandemic-scarred economy has pushed companies into taking an unusually prominent role in this election.

According to a UBS survey of business owners with at least $1m in annual sales, 55 per cent favour Mr Trump © Chip Somodevilla/Getty

More than 1,700 US companies have given staff paid time off to vote, and in a week when the International Crisis Group warned that the president “will more likely stoke than calm tensions” CEOs have felt the need to call for patience and civility as votes are counted.

“We have no historic parallel,” says Prof Sonnenfeld of the fissure between the business community and the Republican president. But he says the senior executives he convenes at regular conferences never saw Mr Trump as one of their own.

“I would bring Donald Trump to our CEO summit years ago and the top tier CEOs would say ‘Don’t bring him in here. We don’t consider him a top CEO’,” he recalls. When he told the president this after his 2016 election victory, Mr Trump replied: “Well, they’re all coming by to see me now.”

Financial service leaders see risks in a second Trump term, from a mismanaged pandemic, unfavourable trade policies and continued inaction on climate change © Brendan Smialowski/AFP/Getty

Once Mr Trump was in power and calling executives to sit on his business advisory councils, Prof Sonnenfeld notes, “they bit their lip and said, ‘well, maybe we’ll have some impact’.”

But few directors of America’s largest companies, two-thirds of whom he estimates are typically Republican, have warmed to Mr Trump: a Yale poll found that 77 per cent of them planned to vote for Mr Biden.

That is not the case among bosses of smaller companies, where confidence in the economy was approaching a 30-year high before the pandemic hit. According to a UBS survey of business owners with at least $1m in annual sales, 55 per cent favour Mr Trump.

Washington’s top business lobby groups have urged Americans to keep faith in the mail-in ballot system that many have been forced to use because of the pandemic © Robyn Beck/AFP/Getty

Companies of all sizes have welcomed some — though not all — of Mr Trump’s moves to roll back regulation, Prof Sonnenfeld notes. And businesses strongly supported Republicans’ 2017 cut to top corporate tax rates from 35 per cent to 21 per cent.

But these victories for corporate interests were marred by actions few large companies supported, such as restrictions on skilled immigration or escalating disputes with trading partners from China to Europe. Some Republican policies which business backed, from an alternative to Barack Obama’s Affordable Care Act to promised investment in the country’s crumbling infrastructure, never materialised.

Mr Trump’s way of doing business has also jarred, Prof Sonnenfeld says. As he played companies from Boeing to GM off against their rivals, “I was in touch with all these CEOs and they were asking ‘where’s this coming from?’”

Trump at the Mexico-California border. Many large companies have not supported the administration’s immigration restrictions © Kevin Lamarque/Reuters

But it was not until the summer of 2017, when Mr Trump blamed both sides for deadly clashes at a far-right protest in Charlottesville, Virginia, that executives abandoned his business panels. Since then, many have seen him as a source of unwelcome instability.

“There’s a lot more to having a favourable business climate than just having a lower tax rate. Predictability is one of those things,” says Sarah Bonk, founder of Business for America, an alliance of companies working to improve government.

Many CEOs have also resented the extent to which controversies stirred up by Mr Trump have forced them to speak out about political issues, at the risk of alienating one side or another of a polarised electorate.

Jeffrey Sonnenfeld of the Yale School of Management: ‘What is hard to imagine is that after next week the two-party system will be the same’ © Yale School of Management

But corporate America’s frustrations with Washington predate Mr Trump, Ms Bonk adds: “If they didn’t have to think about the political climate because it was stable, because problems were being solved, because we have predictability in our markets, they would be thrilled. But we’ve seen a failure of government to solve big problems for decades.”

“Business leaders are not ideologues,” echoes Neil Bradley, chief policy officer for the US Chamber of Commerce: “Like most Americans they’re frustrated by the gridlock and the polarisation that they see in government and it’s now having tangible negative consequences.”

The failure to produce further coronavirus stimulus packages for a fragile economy has encapsulated that exasperation. “Five months and we still don’t have anything. That should not happen,” Mr Bradley says.

Last year, the Chamber pledged to start supporting candidates from either party who work constructively across the aisle. That has led the traditionally conservative group to inch towards Mr Biden’s party: this year it endorsed 30 Democrats in the House of Representatives, up from its usual handful, alongside 192 Republicans.

Corporate donations show a similar shift. Listed companies have given 13 per cent more to Democratic groups this year than in 2016, and 15 per cent less to Republicans, according to the Center for Political Accountability, although Republicans still raised double the Democrats’ $5m from this group.

Individual executives’ donations show the divides in the business community. “You have more of the buccaneer type of CEOs giving to Trump and more of the traditional CEOs giving to Biden,” says Bruce Freed, CPA’s president.

Mr Trump has been backed by 15 CEOs of companies in the S&P 500 index, including Jeffrey Sprecher of Intercontinental Exchange, Steven Roth of the property group Vornado and Sheldon Adelson, the Las Vegas Sands casino magnate who has poured $180m into the Republicans’ 2020 war chest.

But twice as many big company CEOs have given to Mr Biden’s campaign, MarketWatch calculated, led by Disney’s Bob Iger, Edward Breen of DuPont and Merck’s Ken Frazier. James Murdoch, whose father Rupert controls Fox News, has become one of the top Democratic donors.

From left: Merck’s Kenneth Frazier, James Murdoch and Disney’s Bob Iger have led donations to Mr Biden and his party © Getty, Bloomberg

Some of the biggest Republican corporate supporters in 2016, such as Paul Singer, Robert Mercer, Steven Cohen and Larry Ellison, have also cut back or disappeared this year. And while Citadel’s Kenneth Griffin and Blackstone’s Stephen Schwarzman have vaulted into the top ranks of Republican donors, Mr Biden has also outraised Mr Trump by a wider margin than Hillary Clinton did on Wall Street. In 2012, Wall Street election funding favoured Mr Romney.

Some of these donations, Mr Freed notes, are about executives “buying access” to a Democratic party most expect to take the White House and perhaps the Senate.

Line chart showing how Trump and Biden are doing in the US national polls

Looking for a political home

Among corporate leaders, there are plenty of anxieties that a Biden victory could provide a platform for the policies prioritised by the Democratic party’s leftwing. Surveys from PwC and UBS show that executives see significantly greater risks on tax policy, healthcare reform and technology regulation should Democrats win. But they also see risks in a second Trump term, from a mismanaged pandemic, unfavourable trade policies and continued inaction on climate change.

Forecasts from Goldman Sachs and Moody’s that a Biden presidency offers better prospects for growth have provided “cover” to those executives who were looking for an economic excuse to break with Mr Trump.

Where CEOs find their next political home may depend heavily on events next week. The Chamber’s Mr Bradley still hopes that executives’ worst fears about election unrest are not realised, just as predictions of chaos at the turn of the millennium proved unfounded.

“I hope this is all like Y2K,” he says. But if the worst-case scenarios play out, he adds, “you will hear more from the business community”.



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'It’s more than sport – every day we are fighting for our rights to be equal’

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French pro basketball player and podcaster Diandra Tchatchouang on her role beyond the court



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Emily Dean on how allyship amplifies the female experience on film

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When I was six years old, I decided to be an artist. When I was 12, I decided to be a filmmaker. And instead of saying no, you can’t do that, or it’s not possible, my mum bought me a video camera.

After several years of working in the industry, I’m working with a female director for the first time. And it’s been such a gratifying experience. Women express leadership in different ways. Maybe you don’t have to be the loudest person in the room. But you can have great ideas.

And the best thing about being mentored by women and being a mentor to women is that make friends with women.

There’s something so powerful the women coming alongside other women, especially in a group setting. Because it means that you can and back each other up. You can support each other’s decisions, and you can amplify each other’s voices.

It’s about seeing yourself in your work. Seeing some part of yourself reflected is really gratifying. It’s also important that we speak up for female characters. I want to see girls and women on screen who have the whole cacophony of experience of what it’s like to be female.

I want to see their flaws. I want to feel their struggles. I want to see their joy. That is so important to making a character feel real. And it took me a little while to settle into myself and realise, if the characters I like to come up with are not your everyday run of the mill characters you see in animation, that’s fine. Because this is who I am.

When you walk into a story room, when you’re working on a film, you have to leave your ego at the door. I think that can be interpreted like keep your ego out of the work. But I’d also say for women who are maybe more shy that leaving your ego at the door means you walk in. And your job is to focus on what’s best for the story and for the film.

The story needs you. The film needs you, and it needs your best ideas. It won’t thrive unless you speak up.



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Crimea ‘water war’ opens new front in Russia-Ukraine conflict

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When a cyclone drenched Crimea in rainfall last month, rivers burst their banks and thousands of people in the Russia-annexed peninsula had to be evacuated from the floods.

The silver lining to the deluge was that the rains also filled Crimea’s depleted reservoirs, temporarily alleviating a crisis brought on by an extended drought and a Ukrainian blockade of the Soviet-built canal that previously provided up to 85 per cent of the peninsula’s water supplies.

Moscow’s struggle to supply Crimea’s 2.4m residents with fresh water has become a flashpoint in an undeclared war, seven years after Russian troops seized Crimea from Ukraine. An even longer conflict between Kyiv and Russian-backed separatists in eastern Ukraine has claimed more than 14,000 lives.

Russia has accused Ukraine of “genocide” over the building of a concrete dam across the North Crimean Canal, in addition to the existing sandbag and earth dam that was built in 2014. Kyiv fears that Moscow is plotting a military incursion to secure water flows from the nearby Dnipro river.

Coupled with surging food prices and international isolation because of western sanctions, the water shortages threaten to undermine President Vladimir Putin’s promise of a better life for Crimeans under Russian rule.

Though state-run pollsters claim Putin remains more popular in Crimea than on average across Russia, the patriotic fervour that sent his approval ratings to record levels after the 2014 annexation has long since subsided.

Map showing Ukraine and the North Crimean Canal, Crimea

“The water reserves and fields have dried up,” said Viktor, 47, a Crimean who regularly travels to Ukraine for work. “Each year it’s getting worse and worse. We didn’t have this problem before annexation,” he said, adding that most Crimeans blamed Ukraine for the crisis.

A $3.7bn bridge across the Kerch Strait linking Crimea with mainland Russia has become a conduit for trucks ferrying water for locals to take away in plastic containers. Popular Black Sea tourist resorts can turn on their taps for just a few hours a day during peak droughts, while the canal has filled with grass and weeds.

Crimea’s agricultural output has fallen owing to a lack of irrigation, making it all but impossible to grow water-intensive crops such as rice.

Construction of the canal began in 1957 after the Soviet Union transferred the arid peninsula to the Ukrainian Soviet Socialist Republic to manage rebuilding after the second world war. The waterway allowed for the cultivation of arable land and helped transform Crimea into a haven for tourists.

“The canal symbolises the stupidity of the Kremlin in occupying Crimea. They didn’t weigh the consequences at a moment of electoral euphoria that was fed by their own propaganda,” said Oleksiy Reznikov, Ukraine’s deputy prime minister in charge of reintegration policies for the occupied territories.

“Why didn’t you think about water?” he asked.

The North Crimean Canal is seen with a low level of water
The severely depleted North Crimean Canal previously provided up to 85% of the peninsula’s water supplies © Pierre Crom/Getty

Workers collect potatoes on the North Crimean Canal
Workers collect potatoes on the North Crimean Canal. Ukraine blocked the irrigation channel after Russia’s 2014 annexation of Crimea © Pierre Crom/Getty

Russia, while pressing Ukraine to reopen the waterway, has launched a Rbs50bn ($680m) programme to bolster Crimea’s supplies, repairing crumbling infrastructure, drilling wells, adding storage and desalination capacity.

Russian prosecutors last week filed a lawsuit in the European Court of Human Rights accusing Ukraine of “flagrant violations” over the issue. Crimea’s governor plans to file a separate complaint demanding up to Rbs1.5tn in compensation.

“Kyiv has essentially used Crimea’s infrastructure dependence on Ukraine, which came about in the Soviet era, as a weapon of mass destruction against all Crimeans. The water blockade is an act of state terrorism and ecocide, but the international community is failing to notice the Kyiv regime’s crimes,” Sergei Aksyonov, the peninsula’s governor, said in written comments to the Financial Times.

Reznikov said Russia, as the occupation force, was responsible under the Geneva Conventions for securing water and other basic needs for local the population. Ukraine has filed its own multi-billion-dollar claims against Russia, citing losses caused by what it describes as an illegal land grab.

With tensions rising, Russia deployed tens of thousands of troops and advanced weapons to Crimea this spring, as well as to the border of the two breakaway eastern regions where Moscow-backed separatists have battled government troops into an eighth year.

Col Kyrylo Budanov, chief of Ukraine’s army intelligence unit, said Russia was looking to seize the canal as well as adjacent territory to connect Crimea with the breakaway regions. Russian troops could advance on Nova Kakhovka, the Dnipro river town where the canal begins.

Some Crimean Tatars, an indigenous ethnic group whose members largely opposed Russia’s annexation, have set up a makeshift camp near the dams to make sure the water flow does not resume.

A Crimean Tatar activist on the North Crimean Canal
A Crimean Tatar activist enters his base on the North Crimean Canal. Tatars have set up camp to make sure the water flow does not resume © Pierre Crom/Getty

A Ukraine military vehicle drives past a Soviet monument marking the entrance to Brylivka
A Ukraine military vehicle drives past a Soviet monument marking the entrance to Brylivka, a village on the North Crimean Canal © Pierre Crom/Getty

“It will be a full-scale war,” said a 55-year-old activist who gave his name as Alibaba. He said he and his fellow activists were willing to take up arms to defend the blockaded canal. “There will be nowhere to hide in these fields. Let them try,” he added.

At the Kalanchak border crossing near the new dam, Russian and Ukrainian troops have dug trench positions a few hundred meters apart.

Tensions have also flared in the Black Sea, not just with Ukraine but also with western navies. Russia fired warning shots in the path of a British destroyer sailing through contested waters off Crimea last month. Sevastopol, Crimea’s largest city, is home to Russia’s Black Sea fleet.

Moscow has insisted it would not go to war over Crimea’s water supplies, even as it conceded that Ukraine was unlikely to restore them. “All these hysterical statements from Ukrainian politicians are completely baseless — they’re just stupid, aggressive propaganda aimed at inciting hatred between the Russian and Ukrainian people. There won’t be any ‘water war’,” Crimea governor Aksyonov said.

Reznikov, the Ukrainian minister, said Kyiv was ready to provide Crimea with humanitarian assistance, including drinking water, which it already does for the separatist-run eastern territories, but no request had been made.

“For Russia to admit they’re weak is very difficult . . . it would amount to an admission that they made the wrong decision,” he said.



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