Which Way Will Capital Vote?

Business-minded voters have doubts about both candidates.

FOR a short while in his early 20s, Barack Obama edited reports in New York for Business International, a publishing firm that was later bought by The Economist Group. He did not much like it, so he quit to become a community organiser. That was his only first-hand experience of business. John McCain has had even less, having spent his adult life as a pilot, prisoner-of-war and politician. Businesspeople might wonder if either candidate truly understands their worries.

Both men are happy to take money from businesspeople, and both praise enterprise in the abstract. But both also snipe at supposed corporate villains. Mr Obama spent his primary campaign railing against oil firms, irresponsible mortgage lenders and overpaid bosses who export American jobs. Mr McCain fulminates pointlessly about oil speculators, and once dismissed a Republican rival, Mitt Romney, a successful businessman, by sneering: “I led … not for profit but for patriotism.”

Both men should be careful. Some 10.7% of registered voters own a small business—only a whisker less than the 11.9% who belong to a union. Directly or indirectly, private firms pay most people’s wages. Pro-business voters cannot be ignored, and they have doubts about both candidates.

Mr Obama posed as a protectionist during the Democratic primaries (though he has since toned down his rhetoric), and he backs populist notions such as a windfall tax on oil firms. On the other hand, he seems open to advice from serious corporate types. Mr McCain is a proud free-trader and longtime opponent of red tape, whose voting record earned a 100% rating from the US Chamber of Commerce last year to Mr Obama’s 33%. But Mr McCain sounds less assured than his young rival when grappling with complex economic issues such as the housing crunch. Business lobbies admit they have no idea who their members will vote for.

What they do know is that their members are gloomy. According to American Management Services, a consultancy, 81% of small-business owners think the economy is in recession. The National Federation of Independent Business, a lobby group, says small-business confidence is at its lowest ebb in three decades. The big worry is inflation, especially of health-care and energy costs.

Health-insurance costs for small businesses have risen by 130% since 1999, causing wages to stagnate and many firms to restrict or eliminate coverage. Mr McCain wants to curb costs by allowing more competition, and to give tax breaks for health insurance to individuals rather than companies. Mr Obama promises subsidies to make coverage nearly universal and to tax big firms that don’t cover their employees. Both plans have drawbacks, says Bruce Josten of the Chamber of Commerce. Few people will buy individual insurance policies under Mr McCain’s plan, he predicts, and Mr Obama’s does not do enough to restrain costs.

The exploding price of oil, meanwhile, cripples transport firms and fuels inflation for everything that has to be moved around. In the short term, neither candidate can do much. In the long term, Mr Obama favours huge public investment in alternative energy. Mr McCain favours some subsidies, but places more emphasis on private investment and nuclear power.

The two candidates differ sharply on taxes. Mr Obama would raise taxes on capital gains, dividends and incomes over $250,000 a year. Mr McCain offers a seemingly more enticing package of cuts in corporate income tax, ordinary income tax and inheritance taxes. But some doubt that he will curb spending enough to make the package fiscally responsible.

Some of Mr Obama’s friends spook business. Whereas Mr McCain supports curbs on frivolous lawsuits, trial lawyers back Mr Obama with open wallets. Mr Josten says business should be “very concerned” that a President Obama would roll back tort reforms, though as a senator he once voted for a mildly reformist bill. Mr Obama also wants to end the requirement that workers hold a secret ballot before forming a union. Besides being undemocratic, this alarms many employers.

With less than four months to the election, many businesspeople are undecided. A recent poll of small-business owners found that 80% had little idea what either candidate might do for them. Dave Bromberg, a grocer in Albuquerque, says he likes both of them. He thinks Mr McCain is tough on waste but Mr Obama would have trouble standing up to a free-spending Democratic Congress. “Democrats feel sorry for everybody,” he says. “McCain will probably say, hey, we’re all responsible for ourselves, and [the government] will help you a little bit, but only a little.”

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