May 31, 2007
Those Revoltin' CEOs
So are the CEO's revolting? Well, it depends on what definition of the word you use. There's certainly a trend, ably documented by Chris Hayes, for them to take a more constructive, rather than obstructionist, stance on certain issues. Wal-Mart has joined with SEIU to call for universal health care reform, to be sure, and various companies have begun highly public efforts to lighten their carbon footprint. But aside from a few rare cases of genuine reformism, like with P&G's decision to back hefty emissions regulations, I'd counsel skepticism.
Take Wal-Mart. As Hayes writes, "Wal-Mart CEO Lee Scott joined Andy Stern, the president of the Service Employees International Union, to announce his company’s support for some form of universal health care." On the surface, that looked pretty good. Progressives have a certain series of mental associations that are triggered when we here that some institution or individual supports universal health care: We know what that health care looks like, and that they will advocate for it, and fight to get it passed. But it's not clear any of these assumptions are on target with Wal-Mart.
Rather, they mopped up good press for supporting the vague goal of universal coverage, devoted absolutely no resources to the fight, offered no specificity over what they meant by universal coverage, and promised to continue funding candidates who opposed universal health care. That they're on record behind the policy change is nice, but there's no sign that their participation in the coalition will keep them from working against the bills that Democrats actually offer, and no evidence that their change of heart is likely to result in sustained advocacy of any particular solution, either.
Indeed, to frame this as a Revolt of the CEO's gets it backwards. What you're seeing are not changes of heart, but changes of tactics. In other words, it's the pressure of the progressive movement that's forcing corporations to adapt. As outright obstruction becomes less effective -- see Wal-Mart's increasingly bad reputation -- they'll make moves to appear more constructive, as they did in the early days of the Clinton health care debate. But if the pressure is eased, if we toss up our hands and welcome them to the coalition, then, just like in the Clinton debate, there'll be a lot of long faces when we find that the coalition held until the moment business felt comfortable eviscerating it. Getting behind the abstract goals of reducing climate change or the uninsured is easy enough, garners good press, and in no way stops you from transitioning to full-out opposition when a carbon or payroll tax emerges on the agenda. So for now, I'm happy to celebrate a new attitude among business types. But we've seen this before. As the man said: Trust, but verify. And remember, it's not the CEO's revolting, but the organizers effectively pressuring them. Let up the pressure, and you'll lose the CEOs.
May 31, 2007 | Permalink
The Walmarts will support any effort that reduces the pressure on them to increase their costs, and as you say Ezra, if the forthcoming result looks like their current advantage in the marketplace by not having this expense is to be replaced by a market-leveling expense for all, they will turn away. They'd be giving up a significant cost advantage to no gain for the company. Some would argue that it is the CEO's responsibility to do anything that reduces shareholder value, and giving up a cost advantage surely would cut their profits compared to others that don't today have that advantage.
Until society requires that corporations accept other goals in addition to profit maximization, unbridled capitalism will continue to gallop in the pasture. Corporations are purely the creation of society's laws, but they haven't accepted that they can be required to balance what benefits they receive under the law with obligations as well.
I'd go further: don't trust since they won't let you verify, and they will find ways to oppose anything that limits their freedom to do anything, even if that freedom results in socially irresponsible behavior. Just look at what they pay now to avoid regulation in the public interest. They have the best government that money can buy.
Posted by: JimPortlandOR | May 31, 2007 12:00:52 PM
why do you have faith in organizers to pressure business in traditional ways, i.e. by pressing on some issue, but so little faith in organizers to act tactically when engaging businesses?
SEIU and Andy Stern are aware of the risks of partnering with Walmart. Obviously they have not gone on public record declaring how exactly they will respond to potential future moves from Walmart that seem to violate the spirit alliance. But they can't effectively engage if they do so.
Yes, "trust, but verify." But also trust our guys (but verify).
Posted by: e | May 31, 2007 4:47:15 PM
I'd suggest that companies desires to decrease their costs represents a huge opportunity to (re)consider the way we deliver health care in the US.
Currently the vast majority of health care costs are subsidized or paid for entirely by corporations as part of the health care benefits that they provide to their employees. This doesn't address the unemployed or employees working part-time jobs with no benefits (i.e. at Wal-Mart), but it does cover the vast majority of the rest of the nation not covered by VA, Medicaid, or Medicare programs.
The issue with this approach to funding health care (excepting those not covered at all) is that there is increasingly more and more pressure on the competitiveness of US corporations. Consider GM, Ford, and Chrysler. Their legacy of providing high quality healthcare to both current employees and retirees results in significantly higher costs for them to build a car versus foreign manufacturers such as Toyota or Honda that do not have these embedded costs. The Big 2 and 1/4 are not alone in this situation, they have just become among the more visible as they lose billions of dollars each year.
From an economic view, US companies are less competitive (and less competitive means fewer jobs) because we deliver healthcare differently from most of the rest of the world. Healthcare costs for US companies go directly to the bottom line and impact companies with a large base of professional or union employees the greatest. Healthcare costs in countries with universal healthcare are assessed in the form of taxes that are spread across the countries entire economy or population.
Rather than demonizing companies for being profit driven, it would make more sense to embrace these desires and find solutions that provide higher quality healthcare while making our corporations more competitive. Taking Ezra's core position that the US provides lower quality healthcare at a higher price, selling universal health care as competitive advantage could enhance US companies competitiveness worldwide, provide more jobs for US workers, and result in better healthcare delivery.
Just a thought anyway.
Posted by: m | May 31, 2007 5:36:31 PM
If big business supports an expansion of the regulatory/welfare state, it will be out of self-interest. If we have universal healthcare, the main political force behind it will be employers that currently provide insurance. The pols will present it as a response to public pressure, but then they pretended the Meat Inspection Act was because of Upton Sinclair rather than at the behest of the big meat packers.
It's quite plausible that a major wing of big business will swing back to the corporate liberal policies it backed under FDR. Thanks to the polarization of wealth and income over the past 30 years, the problems of overproduction and underconsumption are reasserting themselves--the same problems that caused so much of big business to back FDR. It's not by accident that GE's Gerard Swope played such a huge role in drafting the New Deal agenda, along with an army of investment bankers and corporate lawyers.
It's never been big business vs. big government. It's always been big government and big business vs. us.
Posted by: Kevin Carson | Jun 1, 2007 1:19:20 AM
I think both the Left and Right can agree on one single point: employers shouldn't be providing health care. Employer-provided health care turns businesses less competitive, makes employees dependent on a single job in order to keep their benefits, limits consumer choice, etc.
Now whether or not we move to a single payer or market system is a separate question.
Posted by: Jason | Jun 1, 2007 11:07:33 AM
Posted by: judy | Oct 6, 2007 12:02:43 AM
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