Are We Seeing The Demise Of Corporate Democrats?

Former Labor Secretary Robert Reich comments on why Democrats are voting for progressives this year:

Most discussions about the Democratic Party in this election cycle focus on the remarkable rise of progressive Democrats (such as Florida state Rep. Angie Nixon, a democratic socialist who yesterday scored an upset win in the Democratic contest for the Florida Senate).

An equally big story is the remarkable decline of corporate Democrats. 

Some Democrats worry about this. My old friend Democratic strategist James Carville compares the current wave of progressive primary wins to progressive campaigns in 2016 — especially that of Bernie Sanders — that he believes fractured the Democratic coalition. 

“Bernie Sanders is the reason that Donald Trump is president,” Carville said recently, claiming that Bernie’s primary challenge to Hillary Clinton convinced voters in battleground states that establishment Democrats were no different from establishment Republicans, thereby weakening her prospects in the general election.

Even if James is right about 2016 (and I don’t believe he is) his assessment is irrelevant now because we’re at a radically different point in American politics than we were 10 years ago.

The silver lining on the dark storm cloud of Trump and his detestable regime is that it has exposed the greed, venality, cupidity, and corruption of America’s corporate elite.

 

Trump has allowed the CEOs of giant corporations and the titans of Wall Street to do whatever they want as long as they suck up to him. And he’s providing all sorts of corporate welfare to those who generously bribe him — no-bid government contracts, exclusive licenses, tax loopholes, tariff exemptions, use of public lands, and permission to become even bigger monopolies. 

Trump has thereby unveiled a truth about corporate America that for many years has been hidden behind a soothing blanket of corporate PR bullsh*t about social responsibility, corporate charity, and “trickle-down” economics.

 

That truth is the captains of corporate America are so rapacious that they’re willing to throw average working Americans under the bus to make billions more. 

Corporate avarice under Trump has become so blatant and corporate America’s contempt for the needs of average Americans so flagrant that most Americans are now catching on. 

They’re voting for progressive Democrats not because they want socialism, support the Democratic Socialists of America, or reject candidates called “moderate.”

 

They’re voting for candidates whom they believe will fight to make housing, food, healthcare, and childcare affordable to average working families. And who’ll take on Trump’s billionaire backers, CEOs, and Wall Street titans who are rigging the economy against them. 

Much of the corporate media won’t tell this story. When Dr. Abdul El-Sayed won Michigan’s Democratic primary over Haley Stevens, the media overflowed with accounts of how much smaller El-Sayed’s margin of victory was than polls had predicted. 

Yet the most remarkable thing about El-Sayed’s victory was that he won despite being dramatically outspent by super PACs arrayed against him. 

Stevens benefited from tens of millions of dollars in outside spending, including the largest investment in a senatorial race ever made by the American Israel Public Affairs Committee, which traditionally supports pro-Israel candidates but in recent election cycles has supported candidates most favored by corporate America. AIPAC’s ads in favor of Stevens and against El-Sayed never even mentioned Israel. 

Outside super PACs poured an estimated $54 million to $60 million into backing Stevens and opposing El-Sayed, compared to only about $5 million for El-Sayed. Pro-Stevens groups outspent El-Sayed on TV advertising alone by more than 12 to 1 ($26.9 million to $2.1 million) in the closing weeks. An average of $95 was spent for every vote against El-Sayed versus just $9 per vote for him. 

The race between Stevens and El-Sayed was a proxy fight over the future of the Democratic Party. Senate Minority Leader Chuck Schumer backed Stevens and encouraged donors to back her campaign, as did other corporate-aligned politicians such as Michigan senator Gary Peters. On the other hand, Sen. Bernie Sanders and U.S. Rep. Alexandria Ocasio-Cortez supported El-Sayed, as did progressives such as Sens. Chris Van Hollen and Elizabeth Warren. 

El-Sayed justifiably made a campaign issue out of how much corporate money was backing his rival. He argued that Democrats should reject corporate influence and embrace an agenda that helps average Americans. His campaign centered on providing Medicare for All, lowering prescription drug costs, and banning corporate PAC money. “We’re in a situation right now where the rich keep getting hyper-rich on the backs of figuring out how to monetize everyday people,” El-Sayed told AP during a Sunday afternoon march, as his supporters chanted behind him, “Money out of politics! Money in your pockets!”

El-Sayed’s victory marked a turning point for the corporate wing of the Democratic Party. 

I saw the start of the corporate Democrats in the early 1980s, when Democrats in congress began drinking from the same campaign funding trough as the Republicans, mostly from big corporations.

“Business has to deal with us whether they want to or not” crowed Democratic Rep. Tony Coelho, who then headed the Democratic Congressional Campaign Committee. 

Democrats had controlled Congress since 1955, and assumed they’d continue to run the House for years. They thought they could take advantage of their seemingly permanent power to raise cash for their campaigns. 

Coelho’s Democrats soon achieved a rough parity with Republicans in contributions from corporate and Wall Street campaign coffers, but it proved a Faustian bargain as big corporations and Wall Street gained increasing influence in the party. It is a truism in politics as in nature: One dares not bite the hands that feed. 

Corporate Democrats thereafter stopped the Democratic Party from pursuing an agenda that would have dramatically helped America’s working class.

 

To be sure, over the last three decades Democrats have scored some important victories for working families — the Affordable Care Act, an expanded Earned Income Tax Credit, and the Family and Medical Leave Act, for example.

 

Yet they’ve done little to alter the widening economic inequalities that have taken a huge toll on working-class families. 

Both Clinton and Barack Obama ardently pushed for free-trade agreements, for example, but didn’t provide the millions of blue-collar workers who thereby lost their jobs means of getting new ones that paid at least as well.

They also stood by as corporations hammered trade unions, the backbone of the white working class. Clinton and Obama failed to reform labor laws to impose meaningful penalties on companies that violated them, or to enable workers to form unions with a simple up-or-down vote.

In his 1992 campaign, Clinton promised such reform but once elected didn’t want to buck corporate Democrats by spending political capital on it. In his 2008 campaign, Obama made the same promise but never acted on it.

Partly as a result, union membership sank from 22 percent of all workers when Clinton was elected president to fewer than 10 percent today, and the working class lost bargaining leverage to get a share of the economy’s gains. 

The Obama administration also protected Wall Street from the consequences of its gambling addiction through a giant taxpayer-funded bailout but left millions of underwater homeowners to drown.

Both Clinton and Obama allowed antitrust enforcement to ossify — with the result that large corporations have grown far larger and major industries far more concentrated.

 

And they turned their backs on campaign finance reform. In 2008, Obama was the first presidential nominee since Richard Nixon to reject public financing in his primary and general election campaigns. And he never followed up on his reelection campaign promise to pursue a constitutional amendment overturning Citizens United v. FEC, the 2010 Supreme Court decision that opened the floodgates to big money in politics.

What happens when you combine free trade, shrinking unions, Wall Street bailouts, growing corporate monopoly power, and the abandonment of campaign finance reform? You get an economy favoring the wealthy and a political system favoring the powerful, while workers without college degrees suffer declining real wages and dwindling job security.

John F. Kennedy was the last Democratic president to depend on the votes of working-class Americans while losing the votes of white, college-educated Americans by 2 to 1. Sixty years later, Joe Biden depended on the votes of college-educated Americans while losing the votes of the white working class by 2 to 1. Kamala Harris lost the working class by an even larger margin.

Trump has exposed the venality and cupidity of corporate America, while large swaths of the working middle class struggle to make ends meet. As a result, Republicans appear likely to face some major defeats in the midterm elections. Corporate Democrats are on the defensive because their campaign cash isn’t working the way it used to. 

Now, finally, the Democratic Party has an opportunity to once again become the party of working Americans, as it was under Franklin D. Roosevelt, rather than the party of corporate America. It is more urgent than at any time since the Great Depression that Democrats act on this opportunity. 

Corporations Are Using Trump's Tariffs To Make Exorbitant Profits From Consumers

There's a reason why corporations have been silent about Trump's tariffs lately. It's because they are using the tariffs as an excuse to raise prices and make exorbitant profits. Robert Reich explains:

As Trump’s tariffs and his war with Iran drive up prices of everything from oil to steel, you’d think big American corporations would be screaming bloody hell. Presumably, Trump’s tariffs and war are squeezing their profits just as they’re squeezing the wallets of average Americans.

To the contrary, corporate America is quietly encouraging both Trump’s war and Trump’s tariffs. Why?

One possibility is they’re raking in money off the war as defense contractors and suppliers. 

Some surely are, but this can’t account for the acquiescence if not outright support by most big American corporations that have nothing to do with the defense-industrial complex. 

Another possibility is they don’t want to piss off Trump, fearing his retaliation.

 

But if they were really concerned about the negative effects of Trump’s war and his tariffs on their bottom lines, surely they’d be using their armies of lobbyists and piles of campaign contributions to stop his war and his tariffs. After all, that’s what the armies and piles are for. 

There’s a much simpler explanation for corporate America’s silence if not encouragement. In point of fact, both Trump’s war and Trump’s tariffs are helping their bottom lines. 

Trump’s war and his tariffs are allowing domestic U.S. producers to raise their prices to match the elevated prices of imports. And those who aren’t directly affected are using the higher import costs as excuses to raise their prices, too.

Presto! — corporate profits have exploded, and their stock prices have soared.

 

But American consumers are getting shafted. Both Trump’s war and his tariffs are pushing up prices for a vast range of goods and services. The result is a massive redistribution of income and wealth from American consumers to big American corporations. 

This is the story of the American political economy under Trump that’s rarely if ever told, but it’s critical to understanding why Trump has been getting away with his war in Iran and his tariffs without much political opposition.

 

Start with oil. 

Brent crude is now selling for $90.05 a barrel. If the war drags on it could push crude prices much higher, especially if it further depletes oil inventories, and spreads to Houthi militants starting a naval blockade in the Red Sea and to other Gulf states.

Oil prices are set globally. As global supplies dwindle, oil prices rise across the board — including prices charged by domestic U.S. producers. They’re enjoying a huge windfall.

 

With crude oil prices averaging $95 a barrel between March and June — up from about $66 before the war — ExxonMobil, Chevron, ConocoPhillips, and Occidental Petroleum have collectively raked in some $31 billion in earnings for the second quarter of this year, according to FactSet estimates. 

That’s up from about $12 billion for the same period last year.

 

These windfall profits have helped boost Big Oil’s stock prices. Big Oil’s investors and executives (who are paid partly in shares of stock) have done wonderfully well. 

But American consumers are bearing the burden, as gas prices once again soar past $4 a gallon, a dollar more than they were before Trump started his war on February 28.

 

So is it any wonder that Big Oil isn’t criticizing Trump’s war, and is quietly rooting it on?

Or consider steel. Trump imposed steel tariffs of 50 percent in March and June 2025. These tariffs have driven up steel prices in the United States.

 

The tariffs have been a boon to American steelmakers, who have raised the prices they charge their American customers to match the higher prices now charged for steel from abroad. 

As a result, leading American steel producers like Nucor and Steel Dynamics report significant year-over-year earnings increases.

Nucor’s profits in the second quarter of 2026 were $1.16 billion, up from $603 million a year earlier. Steel Dynamics has reported a second-quarter income of $534.1 million, nearly double its net income compared to the same period last year. A third U.S. producer, Cleveland-Cliffs, earned $97 million in the second quarter of this year (before interest, taxes, depreciation, and amortization), compared to a loss of $213 million last year, and the firm anticipates doubling earnings next quarter. 

Who’s bearing these higher costs? American consumers of steel — in the prices of everything we buy that contains steel (such as cars and appliances). 

The Producer Price Index (a widely used proxy for input costs) for steel mill products is now sitting at its highest point since May 2023. 

American-based producers that utilize oil and steel have been able to pass those costs on to their customers without harming their profit margins. Some corporations that don’t depend on oil or steel have used the higher import costs as excuses to raise their prices, too. 

Hence, Trump’s war and Trump’s tariffs are wins for corporate America. Profit margins are up, the value of shares on the stock market are up. Shareholders are happy.

 

Big corporations aren’t raising a fuss about the war or tariffs because they like what’s happening. 

But American consumers are getting shafted. Their wages aren’t keeping up with the price increases. Yet they have no alternative but to pay the higher costs for energy and steel and everything else — which is the whole point. 

As the inflationary effects of Trump’s war and his tariffs (taxes) on imports spread throughout the economy, they’re hiding what’s really occurring: an upward redistribution from consumers to big American corporations. 

American consumers need to know the truth: Two of the major reasons why everything is less affordable are Trump’s war and his tariffs. 

Consumers may not have armies of lobbyists and piles of campaign contributions to do their bidding, but they do have a way to express their disapproval. They can vote out Trump Republicans on November 3.