The 'awesome' power of America's CEOs

(Image credit: KAREN BLEIER/AFP via Getty Images)

published 23 January 2021

America's CEOs have suddenly become "a new political force," wielding "awesome power," said Felix Salmon at Axios. "They have money, they have power, and they have more of the public's trust than politicians do." We saw that on full display last week from a "broad coalition of CEOs who are silencing Trump and punishing his acolytes in Congress." Corporate political action committees, or PACs, gave $91 million directly to members of the House of Representatives in the last election cycle, according to The New York Times, and companies spent billions more on political advertising through "Super PACs." Now many of them have turned off the money to politicians who voted to overturn the election results. In 2019, corporate leaders took the political stage reluctantly, largely responding to outside pressure. This time they are actively flexing their muscles and mobilizing on coronavirus response, racial justice, and climate change.

Let's hope the CEOs' resolve sticks, said Joe Nocera at Bloomberg. "When I suggested a week ago that companies should stop making campaign contributions to House and Senate Republicans who perpetuated the fiction that Joe Biden had stolen the presidential election, I didn't really think it would happen." It has — in fact, at least 48 major corporations have now taken this stance. This is "more than public relations and more than a purely business calculation." In a country in which trust in almost every other institution has cratered, corporations are trying to project "confidence in the rule of law and the stability of democratic institutions." Sure they are, said Paul Waldman at The Washington Post — at least as long as they think they face a risk of being "targeted by boycotts because they're helping to fund the GOP's sedition caucus." They'll hold on to their contributions for now. But they'll change their minds when Republicans come calling and say, "You can have all the tax cuts you want."

Indeed, you shouldn't assume that corporate America "spontaneously grew a conscience," said Derek Thompson at The Atlantic. However, there may be a different business calculus at work. "Corporate America is running so far to the left of the GOP because both corporations and parties try to win the future." Corporations do that by appealing to consumers, parties do it by appealing to voters. The Republican Party, though, has followed its "older, whiter, less-educated" base to the right while "younger Americans and college-educated Americans have moved sharply left." Companies are acting just as cowardly or brave "as their consumer demographic allows them to be." For many decades, "college-educated Americans voted far to the right of those without diplomas," said Eric Levitz at New York magazine. Now that's turned upside down, and companies are siding with their most valuable employees and customers in a time of "historic generational polarization."