Corporations and their chieftains have seldom been more vilified than what we're seeing as the 2012 election nears. In an effort to understand what the goals of the anti-corporation camp are, Euro Pacific Capital's Peter Schiff, author of The Real Crash, headed down to the Democratic National Convention last week in the guise of a liberal talk show host to get a firsthand view of what the other side thinks.
In the attached video Schiff explains that he wasn't surprised by the antipathy towards big business but thinks the left has the wrong impression of big business. The much-reviled "corporate America" isn't a group of faceless, humorless overlords shackling serfs to the plow. "Corporations are simply a group of people who come together and incorporate," Schiff says. "They are people."
Of course, Republican Presidential nominee Mitt Romney famously offered a similar view on the campaign trail. Suffice it to say it didn't do much good for his reputation as a company man. Like it or not, the reality is American needs healthy corporations to exist as we know it. To seek an arbitrary cap on profit levels not only misses the point but would short-circuit the very foundation of capitalism.
A more empathic society in which entitlements are a given can't exist without funding from the government. Corporate taxes and payroll taxes account for 50% of all tax revenue. Fewer jobs and less profitable corporations means money for government aid.
"It's the pursuit of private profit that is the reason all the consumer goods, all the services, are provided," Schiff says. "The idea that profits are evil; they're not, they're virtuous. Profits are the most important part of a free market economy."
The battle lines are drawn and the caricatures are easy. Schiff believes the Commander in Chief could help bridge the gap, were he willing to do so.
"I'd like to see Obama repudiate what these Democrats are saying," says he, adding, "I don't think he can because I don't think he wants to alienate his base."