Mass movements can rise and spread without belief in a God, but never without belief in a devil," states Eric Hoffer in "The True Believer: Thoughts on the Nature of Mass Movements."
When the earth under the sea abruptly deforms, causing an earthquake, a massive amount of energy is released and the result is a tsunami.
What do these two disparate statements share? They are both metaphors for the recent and dramatic political reversal. The tsunami that swept conservative Republicans into elective office this past November is due, in large part, to a mass movement called the Tea Party that shook the political ground and released seismic levels of populist energy in NH and across the country.
It's a businesses community's dream if the November election produces a public policy agenda of smaller government, lower taxes, and fewer regulations. The big-government, pro-regulation, higher spending, and bailout policies of recent years are the "devil" that unified Tea Party members and made the movement's agenda attractive to many business leaders. But neither seismic nor populist energy is predictable, and neither has yet been effectively harnessed.
Populism Versus Economics
From its inception in 2009 through the November elections, what the Tea Party was against was more important to the business community than what the movement was for. As long as the business community and Tea Party populism share big government, more regulations and more spending as their common enemy, then their interests are generally aligned. But many, if not a majority, in the loosely defined Tea Party movement have no love for big business, finance, insurance, and multinational companies. It just so happens they dislike President Barack Obama and most Democrats.
What devil will unify and sustain the populist movement after it has vanquished Democrats and/or big government? For businesses in NH, especially larger corporations, the stakes are huge. The anti-immigration leanings of Tea Party populists will clash with the increasing need of NH businesses to hire technology workers. The average educational attainment of NH's foreign-born workers is higher than that of its native-born population. About 45 percent of NH's immigrants have a bachelor's degree or higher (the second highest of any state in the nation) compared to about one-third of those born here. Foreign-born residents in NH make up an especially large percentage-32 percent-of all PhDs and 24 percent of young workers-age 25 to 34-with graduate degrees. Thirty percent of computer programmers in NH are foreign-born as are 25 percent of the software engineers in the state.
Populist calls for protectionism and anti-globalization may also threaten NH manufacturers' roughly $4 billion in annual exports as well as the jobs that those export sales support. In addition, the NH economy relies more on direct investment from foreign countries than all but three other states. In 2008, foreign-owned firms employed almost 7 percent of workers in NH.
New Hampshire's economic successes during recent decades are the result of a transition to an innovation-dependent, technology-rich market that increasingly relies on workers with higher levels of educational attainment across virtually all industries. Research and development, strong universities, high performing schools, attracting and retaining talented employees, and a reputation for being "ahead of the curve" all support innovation. Policymakers can support or facilitate innovation in different ways, but it is critical that they recognize its importance.
The recent election is sure to produce many spending, revenue, and regulatory policies in NH that will please many businesses. But at least a portion of the business community should be wary. Most small businesses receive no loans, subsidies or other support from the government, and relatively few sell goods and services outside the U.S. or hire foreign-born workers. Moreover, most of the high profile public policies that energize the populist movement, such as the new health care legislation, have their greatest impacts on and generate the largest costs for small businesses. Not all Americans love businesses or even capitalism, but they increasingly worship small business. According to one public opinion poll, the public views small business more favorably than churches.
A Case for Big Business
Big government is at the top of a short list of unifying devils needed to sustain today's populism, but "big" business isn't far behind. While occasionally justified, this anger in NH could yield unfortunate results. The state is home to world-class, pioneering businesses whose global connections benefit the state's economy. In fact, only about 100 NH businesses have more than 500 employees and only 260 have more than 250 employees, but combined they employ one-third of all workers in the state.
While big businesses are far from a majority in NH, if a movement were to target those companies employing one-third of NH's workers, it would be best described as something other than populist.
Brian Gottlob is principal of PolEcon Research in Dover and has worked 18 years analyzing economic, demographic, labor market, industry and public policy trends. He can be reached at bgottlob @ poleconresearch.com or at 603-749-4677.
Current Issue - May 2024