The U.S. Chamber of Commerce is not the same thing as American business

October 25, 2010

I don’t understand why everyone is so surprised to find out that large corporations are funneling massive amounts of money to the U.S. Chamber of Commerce. Last week’s NYT report has been making the Internet rounds, and while I appreciate the point that the Chamber is much more partisan than its non-profit status would suggest—70 of the Chamber’s 93 midterm campaign ads either support Republican candidates or attack their opponents, despite the Chamber’s promise to the Federal Election Commission that it only talks about issues—there’s also a curious amount of wonderment at big-company donations. Yes, Wall Street firms sent millions of dollars to the Chamber when financial re-regulation was on the table, and the insurance industry got out its checkbook when it was time to talk healthcare reform. Why would anyone be surprised?

The more counterintuitive and telling story, which the Times only flicks at, is how unsatisfied certain businesspeople are growing with the U.S. Chamber. A couple of weeks ago, New Hampshire’s Greater Hudson Chamber of Commerce decided to break ties with the national organization, because, in the words of the Nashua Telegraph:

[I]t felt recent political advertisements by the national chamber in support of specific parties and candidates were in “direct conflict” with the foundation of the Hudson chamber. Jerry Mayotte, executive vice president of the Greater Hudson Chamber of Commerce, said the Hudson group is a nonpartisan organization. He said he can’t remember the last time they chose not to renew their membership.

Last year, the Chamber of Commerce of Eastern Connecticut did the same thing. Tony Sheridan, the group’s president and CEO recently explained why:

“My issue with the national chamber is their willingness to take a very narrow slice of a piece of complicated legislation – and it’s generally the most negative spin they’re taking, like health care, when we all know that the health-care system is broken – and claim that the sky is falling, instead of using the money to educate people,” Sheridan said.

During financial re-reform, a number of local and regional chambers, including the South Carolina Small Business Chamber of Commerce and the U.S. Women’s Chamber of Commerce, tried to get out a similar message when it came to the proposed Consumer Finance Protection Agency. In one op-ed, the CEO of the U.S. Women’s Chamber wrote:

The U.S. Women’s Chamber of Commerce disagrees with the U.S. Chamber’s big business scare tactics regarding the benefits of a strong, independent Consumer Federal Protection Agency.  The U.S. Chamber would have small businesses believe that protecting the rights of bank and non-bank lenders to deceive, manipulate and bet against small businesses is good for the economy and good for our future – all evidence to the contrary.

The big take-away: the U.S. Chamber of Commerce is not the same thing as American business. It’s easy for the U.S. Chamber—in fact, it’s easy for any well-funded lobbying group—to say that they speak for an entire population. That’s probably never going to be true. And in the case of the U.S. Chamber, it seems to be less true with each passing day.

16 comments

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I can’t decide which is more corrupt, big business contributions on the right or big public sector labor contributions on the left.

Big business purchases more favorable legislation. Public sector labor directly buys higher salaries and benefits for themselves.

Public sector labor unions must be sharply distinguished from private sector labor unions, because public sector workers literally vote for the politicians that pay them. Politicians can literally purchase votes out of the public coffers.

The giant intractable problem of all political economics is public sector unfunded liabilities.

Posted by DanHess | Report as abusive

DanHess, I see it differently.

Private sector labor unions are unnecessary, often counterproductive to the interests of their members. They introduce inflexibility and inefficiency that damage profitability, reduce innovation, and ultimately can lead to the demise of the corporation. If the activity is profitable, the job will pay good money. If the activity is unprofitable, adding a labor union to the picture won’t help anything.

In contrast, public school teachers NEED unions for the system to function. Funding is controlled by taxpayers, most of who are more concerned about their quarterly assessment than they are about the quality of the schools. Put aside the teaching unions and you’ll get a hopeless tangle of patronage, backroom deals, and small-time politicians throwing their weight around. In short, even more of a hopeless mess than we already have.

One of the essential principles behind capitalism is that healthy businesses need to keep their customers happy (or they vote with their feet). “The customer is always right.” Yet with the schools, the “customer” is outvoted by the many childless families in town (who share the tax bill but do not utilize the services). Keeping the customer happy is no longer enough.

Fix the funding mechanism and I imagine most teachers would be THRILLED to see the unions disappear. Perhaps do away with “public schools” entirely and switch to a voucher mechanism?

Disclaimer: Once a public school teacher, now self-employed and working at an private school. The combination of unions and tight-wad politics was a big part of why I left the public system.

Posted by TFF | Report as abusive

Interesting that a post about the US Chamber gets hijacked into a discussion about labor.

Beginning with the Mohawk Valley Formula in the ’40s and continuing unabated in present day, business interests in the US have demonized labor. While it’s true that labor has occasionally shot itself in the foot, the evidence is clear that unions have improved the quality of work life and standard of living for a vast majority in the developed world.

The Chamber and its allies, on the other hand, are not interested in the plight of workers, here in the US or elsewhere. They are interested in promoting the interests of the elite wealthy at the expense of the public good.

Some readers of Felix are obviously not paying attention to the positive link between the decline of organized labor and the decline of the middle-class in the US.

Posted by GraniteStater | Report as abusive

Forget all this talk about labour unions. What REALLY stands out in this article is the fact that three regional CoC’s and one gender-based CoC have differed with the US CoC, and the writer of this article takes this as proof the the US CoC doesn’t speak for anybody. HUH?

Posted by Gotthardbahn | Report as abusive

@TFF –

Agreed! I think vouchers are great idea! Indeed, vouchers are best for those are at greatest disadvantage, the poor and those in inner cities. Indeed, considering how much vouchers have helped the disadvantaged where they have been tried, can somebody tell me why the left isn’t for them?

Control, mayhaps?

Posted by DanHess | Report as abusive

@Gotthardbahn: Reading comprehension check! Did I say that the U.S. Chamber doesn’t speak for *anybody*, or that the U.S. Chamber doesn’t speak for *everybody*?

Posted by BarbaraKiviat | Report as abusive

Coming from the tech world, I never hear mention of the Chamber of Commerce. Especially at the local level, I always thought it was an anachronism of old-fashioned small businesses trying to hold onto largely obsolete business models. It sounds harsh, but perhaps both the Chamber and labor unions are struggling to figure out their roles today and in the future.

Posted by Curmudgeon | Report as abusive

BarbaraKiviat: Whatever. You clearly haven’t grasped – or answered – my point. Taking three regional CoCs and one gender-based CoC differing with the US CoC and somehow concluding, on the basis of this tiny sample, that the US CoC doesn’t speak for everybody and that, in your own words:

‘And in the case of the U.S. Chamber, it seems to be less true with each passing day.’

is kinda jumping to a conclusion, don’t you think? Possibly a conclusion you already had before writing this piece?

Posted by Gotthardbahn | Report as abusive

DanHess, there are several good reasons to oppose vouchers.

(1) Schools (especially large public schools) come with a substantial “fixed cost”. If a third of the students leave for charter schools, or take vouchers to attend private schools, then they take a third of the money with them. The remaining two thirds of the money is insufficient to provide “level services” for the remaining two thirds of the students. Your facilities cost remains unchanged (unless you find a new tenant for the unoccupied space). The teachers who get laid off (or never hired) are lower on the salary scale than those who remain. And you need a certain number of basic administrative and guidance staff regardless of the school population. Downsizing is hard.

(2) The concept of vouchers originated in the South at the time of desegregation and still bears racist links in the minds of some people.

(3) Unions oppose anything that would weaken their franchise. Whether or not it improves the situation for their membership (effective and responsive schools promise greater job satisfaction for teachers) is irrelevant. All organizations tend to be self-perpetuating.

(4) Voters oppose anything that costs more money. A voucher system would likely increase costs (see #1) for a while, though it might ultimately lead to a more effective and more efficient system.

Posted by TFF | Report as abusive

Curmudgeon,
The irony is that small businesses, however well- or ill-suited to their industry, are seen as a sacrosanct object of Americana. Just as the Jeffersonians once viewed yeoman farmers as the highest form of economic organization and work, small businesses are spoken of in hushed and reverential tones. It’s to the great advantage of the US Chamber of Commerce that they wrap themselves in that mantle while taking no prisoners in the pursuit of their largest members’ interests.

Posted by MedicinalScotch | Report as abusive

Does anybody know a major financial firm that is not a member of the U.S. Chamber of Commerce? I’ve got money at Schwab and they have an exec VP that’s on the Chamber’s Board. I’m a Democrat and I’d like to move my money to somebody who is apolitical rather than actively working against my views.

Posted by mwbugg | Report as abusive

Well, I think the key here is that the Chamber is capitalist and market oriented. To say that the Republicans have been stronger on those issues over the past 10 years is pretty questionable, as both parties have been roundly awful. However, in this cycle, the Republicans are at least campaigning against socialist/centrally planned/restribution focused policies. To be sure, the Republican party comes with heavy, ugly, religious conservative baggage- and plenty of loons running for office this time around. However, it wouldn’t really make sense to get behind the Democrats either and you might as well buy into the likely winners.

Posted by mattmc | Report as abusive

Corruption and greed is a great fuel source for more of the same. I wonder what the charter reads and how they remain buy-able/manipulable as well as tax exempt? If you allow unbridled influencing, which was opened again in January, you return to the mafioso style system.

In this case though, the influencing originates from sources which remain anonymous and protected by the law. That’s just wrong … If I were on the board of a charter member I would be speaking up as well.

Maybe the problem in America is everyone forgets they have a voice and free speech and ability to understand what makes sense when you vote. (buy into the likely winners makes sense? in what way?)

I would be having their tax free status reviewed if I had the power to do so and do an audit, knowing they were using that status and cash received to influence with such large sums of money. But then any influencing/lobbying seems to be ok with your society, even as it become more corrupt, now so no one even needs brown envelopes any more …

http://topics.nytimes.com/top/reference/ timestopics/organizations/f/federal_elec tion_commission/index.html?inline=nyt-or g

I like this statement

“The U.S. Chamber would have small businesses believe that protecting the rights of bank and non-bank lenders to deceive, manipulate and bet against small businesses is good for the economy and good for our future – all evidence to the contrary.”

Posted by hsvkitty | Report as abusive

OK,

3 Local chambers say no. 3,497 to go.

I guess most say yes.

Posted by pparris9 | Report as abusive

Yeah … when I owned a small business I never once went to a chamber of commerce meeting. I saw it as a waste of time — something for people who are interested in empty networking over either actually working or relaxing with friends & family.

No surprise that only d***heads’ interests are included.

Posted by stat_arb | Report as abusive

First of all, corporations don’t decide anything, they don’t speak. THE people who manage them do. If the CEO, and top management of a corporation decide to fund one political view or another, they are making that decision based on their personal bias. So, the average stockholder is funding the CEO’s personal political views.

A CEO should not have the right to use corporate money to fund his own political agenda. A Wall Street banker can use corporate money to weaken financial regulation, loot the company for his own personal gain, and the stockholder is left to pay the bill for the lobbying, and a falling share price.

IN the middle of this decade, the management of big financials were looting the companies, manipulating profit and loss statements to give themselves huge compensation packages. When the house of cards came apart, the stockholders were left with almost nothing, but the guys at the top still kept their ill gotten gains.

One other point. We need to quit lumping big financials with the rest of corporate America. There are good corporations out there in manufacturing, energy, agriculture, etc, who are doing things that make Americans lives better. Do not paint them with the same brush as the people who run the big financials on Wall Street.

Posted by randymiller | Report as abusive