Thought of the Week:
Yesterday, All My Troubles Seemed So Far Away. This week, two seemingly unrelated developments struck me—passage of Georgia’s election law and a letter by 13 Democratic Senators calling on the White House to suspend the Buy American waivers that allow foreign firms to bid on U.S. government contracts. In Georgia’s case, what hit me wasn’t the call by activists to move Major League Baseball’s All Star Game out of Atlanta or even the disinformation spread on social media and elsewhere about a ban on providing water to those waiting in line to vote. In the case of the Senate letter, it wasn’t the request to suspend legal provisions within negotiated trade agreements that was most bewildering. In both instances, the extent to which partisan politics had spilled directly into the day-to-day operations of private companies was what was most prominent in my mind.
Like the immediate aftermath of the January 6 attack on the Capitol, passage of the new Georgia state law prompted activists to wage pressure campaigns on private companies. Incredibly, the Senate letter, signed by my own Senator, Chris Van Hollen (D-MD), baselessly stated that “…60 countries currently qualify for such a waiver…despite that these firms do not have American workers or pay American taxes.” These two examples demonstrate the very real new risks that companies are facing in light of the fraught political situation in Washington and beyond.
Although companies have long been engaged in politics—making political contributions, lobbying policymakers, funding ballot initiatives, and taking public stands on policy issues—this era of intense political polarization, with the immediacy, ubiquity, and often inaccuracy of social media, leaves companies open to ever-greater scrutiny. No longer is it possible for companies simply to choose to limit, or avoid engaging in, political activity. Legislation, regulation, shareholder proposals, and/or activist campaigns will eventually impact even the most non-partisan corporation.
While companies might find some limited value or short-term expediency in simply choosing to succumb to activist political pressure, this is not a winning strategy for the longer-term. Among the actions members of the Conference Board’s Government Relations Executive Council, of which SCOA is a member, are taking in this new environment are:
- Preparing for the inevitable backlash;
- Aligning political activity/community involvement with corporate values;
- Ramping up education, communication, and engagement efforts with all stakeholders;
- Increasing coordination internally and with third parties;
- Using any resumption to halts in political activity as opportunities for education.
Thought Leadership—from our Associations, Think Tanks, and Consultants:
Conference Board: Economy Set to Boom: In March, U.S. consumer confidence hit the highest level since the pandemic started a year ago this month. In fact, the closely watched consumer confidence index jumped to 109.7 in March from 90.4 in February. It was the third straight monthly increase. The index, while at a pandemic-high, is still below where it was in the halcyon days of February 2020. Ultimately, with savings rates significantly elevated, it’s likely more of a question of when consumers will spend their money, instead of if they will spend it at all. That’s backed up in the survey, in which consumers expressed a growing desire to purchase homes, cars and other big-ticket items. Still, inflation concerns may temper that going forward.
Capital Alpha: Infrastructure to Eventually Move in One Bill: The president has rolled out a $2 trillion-plus infrastructure plan. This is as large as the climate and clean energy infrastructure numbers will ever get. President Biden is expected to roll out a second set of proposals for health care and the caring economy, or human infrastructure, reportedly during the weeks of April 12 or April 19, before his scheduled April 22 climate summit. Those proposals, taken together, will bring total spending to between $3 trillion and $4 trillion on a gross basis. The base case remains that there will eventually be a single bill of no greater than $2 trillion net that passes under reconciliation rules by Thanksgiving.
AEI: Does America really have an infrastructure crisis: While American infrastructure needs an upgrade, we don’t have an infrastructure crisis. Joe Biden’s infrastructure plan should therefore account for the fact that more spending is not always better, and it should be paid for in the most efficient way possible. https://www.aei.org/articles/does-america-really-have-an-infrastructure-crisis/?mkt_tok=NDc1LVBCUS05NzEAAAF8MQAnhH0L8RewDKy0sXF8tomTau4uNHB0zNxtRwy8Oa-4iJ9kc0LNK50REd8iuRSGqTf1LapzkyPDDdlpb8GDTRaSy_ZzueHPVmxY6NzPYBA
In Other Words (Quote):
“They keep saying, ‘We’re going to transition you into solar jobs.’ That’s not how it works. We build power plants, petrochemical plants and maintain steel mills. Would you ask Tom Brady to play middle linebacker just because he’s a football player?” – Shawn Steffee, a leader of the Boilermakers Local 154 in Pittsburgh, on Biden’s infrastructure plan.
Did You Know:
The White House Easter bunny made its first appearance in 1969, when a staffer for First Lady Pat Nixon dressed as a rabbit.