Business leadership needed on policies please

While there was some business representation on Mayor Ed Murray’s Income Inequality Advisory Committee (IIAC), business leaders in general were conspicuously absent in making the case against raising the minimum wage. (For my position on it go here.) Reports on how Murray’s deal came about suggest that some employers made an effort to push back behind the scenes. However, it was a case of too little, too late. Not enough of them were stepping into the debate and nor were other local company leaders who weren’t part of the committee.

Tom McCabe, CEO of the Freedom Foundation, made the point in May’s “Living Liberty” publication that this is a pattern that has played out for a long time:

“Most businesses and trade groups in [Seattle and Olympia] have spent years compromising, capitulating and just going along. They have lost the spine to slug it out in their own self-defense.”

During the eight years I’ve lived in Seattle, we’ve seen some CEOs step up and help make the case against poor government policy. For example, Costco’s Jim Senegal led on Initiative 1183, and Microsoft’s Steve Ballmer and Amazon’s Jeff Bezos both stood up to be counted on the proposed state income tax.

Sadly, they seem to be the exception rather than the rule. More often than not, business leaders sit on the sidelines or even worse, they’re on the wrong side of the argument, like Seattle Metropolitan Chamber of Commerce’s Maud Daudon who recently lamented the failure of Proposition 1 on King County Metro funding.

New Zealand provides a great case study in what happens when business leaders sit out policy debates or indeed lobby government for favors and handouts. Prior to the early 1980s, government there had been mismanaged for decades with entire industries run by the state. Rather than innovate and compete, businesses lobbied for protection, subsidies, price controls and more. The end result was that by 1984, the country was on the brink of bankruptcy and there was a run on the New Zealand dollar as investors fled.

This was a turning point for business leaders there. From that point on, chief executives of major businesses, such as the late Sir Ron Trotter and Sir Douglas Myers began making the case for smaller government and free markets. Not only did they fund policy research, but they and other leaders who had similarly sat on the sidelines of previous debates delivered hundreds of speeches in the decades that followed, which helped drive the wave of reforms that saved New Zealand from the brink of disaster and ultimately delivered a more prosperous and free nation. Indeed, most business organizations and trade groups there began supporting these reforms, often issuing joint studies on policies.

Let’s hope it doesn’t take a similar crisis to New Zealand’s before Washington’s business leaders play a more active role in policy debates. We need to hear them and organizations they support make the case against terrible proposals like massive minimum wage hikes and restrictions on innovations like Uber. And businesses should stop supporting leaders like Daudon who, on current trends, are complicit in taking us down a path of inexorably bigger government, low growth and fewer individual and business freedoms.

(Cross posted at soundpolitics.com)

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