“That’s called business, by the way,” said Republican presidential Donald Trump during Monday’s debate, after his rival Hillary Clinton skewered him for having publicly embraced the housing crisis as a profit opportunity.
It was an astounding line even for a man who emits a ceaseless stream of outrages, and it seemed to play into Clinton’s strategy of turning Trump’s boasts of business success from a chief asset into a major vulnerability. Clinton’s biggest attack along these lines was her invocation of the widespread accusations that Trump has repeatedly stiffed small businesses, refusing to pay after their work was complete.
Trump appears, however, to have won a huge amount of support from small business owners and is likely confident that Clinton’s attacks won’t stick. Seeing is believing, and what many Americans see is a man who both literally and figuratively turns what he touches to gold.
“Look, it’s all words, it’s all sound bites,” Trump said on Monday. “I built an unbelievable company.”
In February, the Center for Public Integrity reported that aside from retirees, “owners and operators of mostly small to mid-sized businesses,” ranging from “heating and air conditioning contracting companies to exterminators to restaurants,” were the source of the most identifiable contributions to Trump.
Many small business owners no doubt oppose Trump and support Clinton. After all, the sector is heterogeneous, including heating, ventilating and air-conditioning companies; immigrant-owned bodegas; rural salons; and urban sex-toy shops. The same is true of Trump’s complex and heavily debated coalition, which is made up not only of small proprietors but also of military veterans, evangelicals and white workers angry over downward mobility. But Trump’s business success, the Center for Public Integrity found, held a special appeal for small business owners even though their economic realities are utterly different.
“The most important thing we can create for America is jobs,” Hugh Joyce, the owner of James River Heating Air Conditioning Co. in Richmond, Virginia, told the center. “I have a great amount of interest and respect to anyone that can grow a business with that many people — a wild amount of respect.”
Small business owners might also identify with Trump’s braggadocio. After all, they are constantly lauded by every last politician as the moral and economic apex of American capitalism. During the debate, Clinton felt compelled to praise small business “because most of the new jobs will come from small business” — even though researchers have found that small businesses' role in job creation is overstated. Often, the rhetoric has less to do with the reality of small businesses than their deployment as political icons, and their celebration seems just as geared toward winning over the majority of Americans who are not small business owners.
For many Americans, Trump is not different in kind but in scale. He's a representative not of the threat that big business poses but of what small business owners can aspire to. In that sense, Trump is not unlike Mitt Romney, who made a point of stating that he was qualified for the presidency because he had experience in business and that Obama lacked a “basic qualification” for office because he did not.
Indeed, on Monday when Trump accused Clinton of planning “to regulate these businesses out of existence,” he was espousing an old conservative talking point that businesses of all size are in one boat.
The philosophy is a cornerstone of modern conservative politics, perpetuated by the likes of the U.S. Chamber of Commerce, which works at the behest of America’s largest corporations in the name of its smallest ones. (One recent example is its opposition to fiduciary rules on retirement accounts that would curb Wall Street abuses and in the process protect small businesses that sponsor 401(k)s.)
Many local chambers of commerce have left the national organization in protest of its naked allegiance with narrow corporate interests. But its patina of Main Street respectability remains intact.
Taxes have been a key issue driving small and big business convergence. The National Federation of Independent Businesses, which has received major donations from big-dollar donors including Karl Rove's Crossroads GPS, not only became the public face of the fight against Obamacare but also pushed hard to defend President George W. Bush’s income tax cuts for the rich. In 2012, Romney called Obama’s plan to raise taxes on the wealthy “a direct attack on small business.”
''Oh, sure, you hear the typical class warfare rhetoric, trying to pit one group of people against another,'' Bush said in 2003 at a warehouse of the trucking company JS Logistics, where he gathered small business owners to press for his tax cuts. ''But lost in all the rhetoric” is the fact that ''small businesses pay taxes at the individual income tax rate.”
The role of small business in political debates over tax policy has grown even as small-business employment has fallen, according to a study by Alexander Hertel-Fernandez and Theda Skocpol. Political mobilization on behalf of small business owners increased alongside the general rise of corporate political power in the 1970s and ’80s — a time when business, with the help of ideological political figures, moved from lobbying for individual or sectoral tax breaks to general cuts.
“Between 1952 and 1976, there were virtually no joint mentions of small business and taxes in the same messages, but this changed in 1980,” Hertel-Fernandez and Skocpol wrote. “Between 1980 and 1996, two-thirds of the references candidates made to small businesses also mentioned taxes.”
In part, the authors traced this to the rising portion of small-business receipts taxed through the individual income tax — and also to the misidentification of wealthy individuals and major businesses incorporating as pass-through entities and described as “small businesses.”
As the power of big business has grown at the expense of small business, the public celebration and political mobilization of small businesses — real and imagined — has blossomed as never before. That political power, however, hasn’t done much to advance their interests.
“Small businesses tend to favor policies that end up hurting them vis-à-vis big businesses,” said Benjamin Waterhouse, an historian at the University of North Carolina and the author of "Lobbying America: The Politics of Business from Nixon to NAFTA."
According to Waterhouse, a critical shift took place in the 1960s and 70s. Before the 1960s, regulation was mostly geared to regulating competition, and small business owners supported anti-monopoly policies. But from the perspective of many small business owners, the regulatory focus then shifted from protecting one business from another to “protecting people from business.”
“The broad shift is from a logic of regulation that protected one company or set of companies from another,” said Waterhouse, “to a logic of regulation that appeared to pit businesses against the public at large, consumers, workers and the environment.”
At the same time, the stagflation and oil shock of the 1970s put a stop to the post-war economic boom, and the modern conservative movement was organizing and institution building like never before. It was a perfect storm, and the upshot was a seeming shared interest between business of all sizes.
Government, a one-time ally, became the enemy. Recall the Romney-stoked outrage after Obama said, “If you’ve got a business, you didn’t build that. Somebody else made that happen.” Obama was describing the key role that government, in funding science, infrastructure, education played in fostering economic prosperity. But that’s not how many took it.
It’s also possible, however, that some small business owners like Trump for different reasons than they favored Romney, buying into an economic nationalist agenda that promises to defend them not only against against big government but also from the predations of major corporations and Wall Street. While many small business owners rally to Trump, it is Clinton who has received the lion’s share of donations from big business and finance.
The conflict is viewed perhaps not as one between the masses and the 1 percent but as one between hardworking people and a nefarious alliance of elites backing welfare for nonwhites and big business. The Great Recession put a major squeeze on demand and financing and may have made small business owners receptive to the very economic nationalism that has frightened corporate titans.
From Karl Marx to those chronicling the rise of fascism, Waterhouse said, scholars have noted “a history of reactionary politics in the small business community that’s transnational.”
At times of economic crisis, small business owners have a reputation for moving far right.
“Naturally, the petty proprietor prefers order so long as business is going well and so long as he hopes that tomorrow it will go better,” Leon Trotsky observed in 1934. “But when this hope is lost, he is easily enraged and is ready to give himself over to the most extreme measures.”
In reality, Trump’s businesses represent a you-couldn’t-make-this-up parody of all its excesses rolled into one. But that’s not how everyone sees it. It’s clear that Trump the businessman screws the very sorts of small- and medium-sized businesses owned by the very sort of people who are flocking to his campaign. In a new book called "Strangers in Their Own Land," sociologist Arlie Russell Hochschild puzzled over the political affinity that many conservative small businesspeople feel with the very big businesses that hurt them.
“Many members of the Tea Party run or work in a small business — oil company suppliers, trailer parks, restaurants, small banks, and shops," she wrote. "Small businesses are vulnerable to the growth of big monopolies” she added. “But it is very hard to criticize an ally, and the right sees the free market as its ally against the powerful alliance of the federal government and the takers.”
Trump may be a jerk. But for supporters, he's a jerk they want fighting in their corner.
“He’s at least the best suited to get that under control just because he’s a businessman,” Anthony Forlini, who owns a New Jersey company that disposes contaminated dirt, told the Center for Public Integrity. “Just because he understands whatever comes in he had to work to get that. If we get another liberal in there, I’m out of here.”