Comfy With K Street

The late Milton Friedman used to rail against what he called corporate America's "suicidal impulse." By that he meant that the business community continually financed the very politicians who were intent on robbing their profits and slitting their throats.

It's happening again. The latest quarterly Federal Election Commission Report on political giving, released this week, shows the majority of corporate money flowing to the Democrats. Firms like Comcast, General Electric, Federal Express and UPS have shifted campaign giving away from the GOP. Employees of five major defense contractors including Lockheed Martin, Boeing and Northrup-Grumman spent $104,000 on Democratic presidential candidates, versus $88,800 for the Republican field.

Meanwhile, according to FEC data, about 85% of the donations from Roll Call newspaper's top-20 list of corporate lobbyists are helping Ms. Pelosi and Mr. Reid protect and expand their House and Senate majorities. Roll Call calls it a "Democratic donor surge," noting that many of the highest-priced lobbyists already "maxed out"--they've bumped up against the legal limit in how much they are allowed to give the Democrats.

"There's almost nothing in the Pelosi/Reid agenda that we favor," one long-time industry government affairs representative tells me. "But we're still giving the bulk of our money to them."

Last spring, Democratic Finance Committee Chairman Max Baucus said he wanted to more than double the tax on private equity and hedge-fund managers, which could cost this industry up to $6 billion a year. Yet Wall Street firms, investment banks, and private equity firms are still among the Democrats' most reliable ATMs. Goldman Sachs, Citigroup, JP Morgan Chase, and UBS are all giving about two-thirds of their dollars to Democrats this cycle.

the majority of corporate money flowing to the Democrats.

I know I'll get called every name in the book for stating the obvious...so I won't state it, except to point out that the dems are creaming us when it comes to contributions, and they will get behind Hillary long before we have a nominee (and whoever our nominee is, I don't see us getting behind him with the fervor the we-just-wanna-crush-Bush's-party dems have).

I won't say it, but it's pretty obvious what all this means.

Sen. Charles Schumer runs the Democratic Senatorial Campaign Committee and is playing the role of "good cop" when he dials Wall Street donors. As one hedge-fund manager tells me: "Senator Schumer says on the phone, 'I can make your problems go away.' " Of course, the Democrats created the problems.

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High-tech companies depend for their existence on policies such as free trade, low capital-gains taxes, a tax-free Internet. But employees at firms like Microsoft, Cisco Systems and IBM give most of their money to the party largely opposed to these policies. In 2006, Google's employees gave 91% of their donations to Democrats.

Silicon Valley givers complain, with justification, about Republicans' lousy record of fiscal restraint, and of their harassment of employers with round-'em-up immigration tactics. More typically these donors say they are uncomfortable with the GOP positions on abortion and gay rights. Do they care so much about those issues that they're willing to jeopardize their jobs and multimillion dollar investment portfolios? For now the answer is yes.

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Meanwhile, Democrats under Rep. Rahm Emanuel and Sen. Schumer have quietly erected their own K Street Project, and employ some of the same strong-arm tactics they once deplored. "I've never felt the squeeze that we're under now to give to Democrats and to hire them," says one telecom industry representative. "They've put out the word that if you have an issue on trade, taxes, or regulation, you'd better be a donor and you'd better not be part of any effort to run ads against our freshmen incumbents."

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So why won't business groups go to the mat for their friends and spend whatever it takes to defeat their enemies? Former Republican House majority leader Dick Armey explains that "the business groups are simply not ideological givers. They give to buy access and to minimize risk."

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He's undoubtedly right. And so, if Democrats run the table in 2008, they will have corporate America to thank. But business is living in a fantasy world if they believe this will spare them from what is likely to be one of the most anti-growth agendas that Washington has seen in many decades. Nor should they be spared. When you sell the rope to the hangman, you deserve to have a noose around your neck.

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