Does Business Really Love Hillary?

Big business doesn' t like change, and compared with her rivals, Senator Clinton is a known quantity.

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"Through persistence and patience, [Hillary] Clinton has assembled what is probably the broadest CEO support among the candidates, ranging from Wall Street to Hollywood," concludes an article in the most recent issue of Fortune. "Business Loves Hillary," is how the business magazine's cover—which features a photo of a bemused Clinton—puts it. Now a more accurate description might be "Big Business Loves Hillary," since the story is all about how Fortune 500-type business leaders and megarich Hollywood moguls are sweet on the junior U.S. senator from New York. But why is this surprising? To put a twist on a famous Dilbert quote, "Large corporations welcome change and risk-taking in the same way the dinosaurs welcomed large meteors." And in many ways Hillary looks like a safe bet.

1) Hillary appears to be the odds-on favorite. Polls of late show Clinton regularly beating her various GOP opponents in 2008 election matchups, although the margins are quite narrow, to be sure. But the online betting markets show a landslide. According to TradeSports, Clinton is the favorite to win the Democratic nomination—50 percent to 30 percent—over Barack Obama. Furthermore, Dems are the favorite—by 55 percent to 41 percent—to take the White House.

2) Big Business loves the status quo. Why would large, successful companies want radical changes in the economic, political, and regulatory environment that currently sustains them? They don't. Certainly, Clinton is not promising business as usual. But her healthcare ideas are less sweeping than those of rival John Edwards, and she has fudged about whether she wants to get rid of all the Bush tax cuts, such those on capital gains and dividends. Plus, a Clinton Restoration looks pretty good given the economic record of her husband, the most business-friendly Democratic president since Grover Cleveland.

3) Big Business loves Big Government. According to the libertarian Cato Institute, the federal government currently spends roughly $75 billion a year on programs that provide subsidies to private businesses. Is that going to change in a major way if Clinton—who has not made an issue of corporate pork the way, say, John McCain has—is sitting in the Oval Office? Good question. To be fair, she does want to eliminate tax breaks and subsidies to the oil industry. But what government takes from Big Business with one hand, it often gives with the other, perhaps in the form of tax breaks and subsidies for alternative energy. As she outlines in her "innovation agenda," Clinton wants to establish a $50 billion "strategic energy fund" to devise ways to make the United States energy independent and reduce the threat of global warming. She also wants to make the 20 percent research and experimentation tax credit permanent. Federal dollars will continue to flow to the private sector in a big way.

Could a magazine accurately run with this headline: "Small Business and Entrepreneurs Love Hillary"? Seems a bit less likely. As Jeff Cornwall, entrepreneur guru at Belmont University and author of the outstanding Entrepreneurial Mind blog, puts it in an E-mail to me:

There has emerged a sharp contrast between the interests of Big Business and Small Business. In the past century, Big Business, Government, and Labor created a cozy relationship in which they found common ground to support each other. This system worked great until the 1970s-1980s, when the Big Businesses that dominated our economy for so many decades lost their economic steam. Entrepreneurs began to fill the void, creating 78 percent of all new jobs over the past 20 years. Big Business has continued to be supportive of both parties, and as a result both parties have mostly ignored the emergence of the entrepreneurial economy we now find ourselves in. They govern as if it is still 1965. However, over 50 percent of the GDP (according to the Small Business Administration) is now generated by small business in the U.S.

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Clinton, Hillary