April 17, 2021

The GOP-Big Business Divorce Goes Deeper Than You Think

POLITICO’s Holly Otterbein reports on how Pennsylvania Lt. Gov. John Fetterman’s Senate run has become…

POLITICO’s Holly Otterbein reports on how Pennsylvania Lt. Gov. John Fetterman’s Senate run has become an inflection point in the Democratic party. Plus, Speaker Nancy Pelosi says she won’t bring progressive “court packing” legislation to the floor. And House Minority Leader McCarthy meets with scandal-ridden Rep. Matt Gaetz.

Most of the CEOs on the call were Republicans; Sonnenfeld himself has been an informal adviser to Republican and Democratic presidents, but he has a longstanding relationship with McConnell, and spoke at the senator’s wedding to Elaine Chao. The CEOs “ranged from amused to outraged” in their reaction to the GOP attacks on businesses, says Sonnenfeld. “Their comments ranged from talk about ‘taxation without representation’ to the paradox of ‘cancel culture’: It’s OK if they speak out, but only as long as they stay on script?”

As the GOP tries to position itself as the home of “working-class values,” capturing loyalty with a steady campaign against the perceived excesses of progressive culture, it’s running afoul of a business community that can’t simply silo off “culture war” topics. In the eyes of major corporations, issues like voting rights, immigration and transgender-inclusive restrooms have economic impact, too. The millions of people alienated by those fights aren’t just their future customers, many of whom expect to support brands they believe in, they’re the companies’ employees.

“The bad news for Republicans is that they seem to have a 1920s view of who Big Business’ workforce is,” says Sonnenfeld. “That workforce is, at a minimum, highly diverse—and they get along. Trying to stir that up is misguided.”

The new Republican penchant for mocking corporations for being too socially aware—for instance, Sen. Ted Cruz’s Twitter threat to use the power of the state to harm Major League Baseball’s business, signing the message off with “go woke, go broke”—fundamentally misunderstands what matters to business in the 21st century, says Sonnenfeld. “Basically, business leaders believe that it’s in the interest of society to have social harmony. … Divisiveness in society is not in their interest, short term or long term.”

If the marriage between the Republican Party and the business community is on the rocks, what does that mean for politics? What do we misunderstand about what really matters to CEOs? And why aren’t business executives more afraid of boycott threats from the right?

For answers to all of that and more, POLITICO Magazine spoke with Sonnenfeld this week. A condensed transcript of that conversation follows, edited for length and clarity.