Anti-Corporatism, Democratic Style

In his Wall Street Journal column Daniel Henninger is alarmed at the Democratic presidential aspirants’ anti-corporate rhetoric:

Naturally, the Democrats running for their party’s presidential nomination needed a bogeyman, and they have created one even scarier than the Trump monster. It’s them—“corporations!” At their recent presidential debate, one candidate after another claimed corporations were wrecking the country.

Elizabeth Warren, who knows a thing or two about scaring people: “They have no loyalty to America. They have no loyalty to American workers. They have no loyalty to American consumers. They have no loyalty to American communities. They are loyal only to their own bottom line.” And by the way, “I have a plan.” Yikes.

Cory Booker ranted about “corporate tax incentives,” and Amy Klobuchar wants a rollback of “what we did with the corporate tax rate.” Beto O’Rourke somehow related a woman he said was working four jobs with “some of these corporations,” and Tom Steyer, billionaire, said we have to “break the power of these corporations.”

Finally Joe Biden, seeing where this was going, invoked the “corporate greed” of companies that are “not investing in our employees.”

The one of those plaints I want to consider in a little more detail is Joe Biden’s. It isn’t greed that deters large companies from “investing in its employees” but prudence. Why spend money training your present employees to ensure that they have the skills you want when you can call an Accenture, Wipro, or Infosys and get temps, whether here in the United States or offshore, with precisely the skills, experience, and qualities you need? Under the circumstances doing anything else would be irresponsible. It is no accident that month after month employees in the category “business services” continue to increase in numbers in the labor situation reports.

That those affordable outsourced workers design planes that crash or provide poorer service than the workers they replaced is a mere bagatelle.

The solution to that isn’t retraining programs, which are nearly always backwards looking and have spotty track records. The solution is removing the incentives that have been put in place that move companies to outsource, when onshore or off. There are plenty of them.

But that brings me to the real conclusion. I don’t think that Mr. Henninger need worry about some anti-corporate fervor seizing the Democratic Party. Sure, the candidates will rail against “corporate greed” but after the election is over and they’ve satisfied their union and populist supporters, they’ll fail to enforce antitrust laws, rescue big companies when they get themselves into trouble, expand patent and copyright terms, provide breaks for specific companies, and generally be as corporatist as their Republican opponents would have been. They need those big companies. They need their money, both while running for office and when they leave office and are looking for a cozy sinecure that pays the big bucks.

Even Elizabeth Warren, that bugaboo of banks and financial services companies, will be able to tell her friends from her enemies.

That’s the real competitive advantage of large corporations. They can offer incentives to politicians that can’t be matched by small ones.