Big business needs a makeover.
The business sector is playing the unhappy role of bogeyman in this year’s presidential campaign, with Democrat Bernie Sanders bashing banks into pulp and other candidates following his lead. Democrat Hillary Clinton and Republican Donald Trump have both become enemies of free trade, the enabler of multinationals. Trump says hedge funds are “getting away with murder,” while President Obama, for his part, has tightened up on rules meant to prevent Americans firms from relocating overseas to lower their tax payments.
Are big companies really so objectionable? “A lot of what corporate America is doing is right,” Julie Sweet, CEO of Accenture North America, says in the video above. “But we’re not telling a great story.”
One way to improve the plot is for businesses to make a better case for why free trade is good for ordinary Americans. Trade has become controversial because the downside of globalization – U.S. companies moving work overseas where labor is cheaper – is tangible and simple to understand when a factory or U.S. office closes. The benefits of trade – much lower prices for thousands of products – typically accrue incrementally and are harder to pinpoint.
These sentiments are playing out now as the trans Pacific Partnership languishes in Congress, unlikely to be approved before the November elections, and perhaps ever. The TPP is complex, but advocates say it will help the United States and 11 other countries form a powerful trading bloc able to offset China’s growing market heft. But skeptics think it will just mean more American jobs going overseas.
Companies typically rely on lobbyists in Washington to persuade members of Congress to approve trade deals that otherwise don’t get that much public attention. But business may need to change tactics on the TPP. “One of the things we haven’t done is tell enough of a story about how it’s actually really good for small and medium-sized businesses," Sweet says. "There’s 4.5% of the world’s population in the U.S., but the rest is outside the U.S. A large part of the goods consumed are going to be consumed outside the U.S."
In addition to connecting TPP with an expanded market for American firms, business should push new ways to make the economy grow faster. “A lot of this negative rhetoric is about whether the average American is benefitting from growth,” Sweet says. “CEOs need an agenda for growth.”
That agenda would include some policy changes CEOs already favor, for the most part, especially tax reform that would give big companies an incentive to bring home profits parked overseas, and spend them in the United States. Streamlined regulation – especially at the state level – would make it easier for people to start business. And it’s in companies’ interest to make sure more people share in the riches the digital economy is throwing off. Spreading the wealth would around is always a good way to boost your popularity.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.