Yep, Washington Is Out-of-Touch

Like Mike Allen and Jim VandeHei at Politico, Charlie Cook does a nice job of unintentionally revealing the huge blindspots of our business elites:

While the vast majority of major corporate leaders either backed Mitt Romney last year or stayed neutral, they don’t really see the Republican Party as the good guys and Democrats as the bad guys. They see the whole political and governing process as dysfunctional. They believe that even the smart, well-intentioned, and economically sophisticated policymakers on both sides of the aisle are rendered almost powerless by the extremists.

This, too, contributes to the leaders’ reluctance to hire, expand, and invest. Instead, they are hoarding cash or borrowing cheap money to have plenty of cash reserves in case things get really bad. The whole “Fix the Debt” movement is a rather extraordinary interjection of corporate leaders in a process that most would prefer to avoid. When I talk to these leaders, they say they really do worry that Washington has broken down. [Emphasis added]

What has brought corporate America to despair over the state of Washington? Is skyrocketing inequality? Mass unemployment? Diminishing opportunity for a wide swath of Americans?


Above all, our business elites are worred that taxes will go up on wealthy people and investments, and that—at some point in the future—our entitlements might lead to a debt problem. That our economy has far more to fear from a persistent underclass of unemployable people does not even register to them.

This gets to something Jonathan Chait pointed out in his delightful evisceration of Allen and VandeHei’s aforementioned ode to elite conventional wisdom—these are people are utterly insulated from the economy as ordinary Americans experience it. It’s why their proposals for economic growth—domestic energy production, spending cuts, lower taxes—bear no relationship to the actual problems facing our economy, namely, low demand for goods and services.

On a related note, this is why I have little confidence that Washington will do anything to further stimulate demand and employ idle workers—it’s just not a priority for elite opinion makers. Yes, they fear going over the “fiscal cliff,” but given the extent to which that conversation includes nothing about new continuing unemployment benefits or cutting payroll taxes, it seems their worry has more to do with the prospect of higher taxes than any concern for ordinary workers.