WASHINGTON (Oct. 14, 2004) — As in past elections, there is no secret as to where the major players in the tire industry stand on the 2004 presidential election.
Tire manufacturers and dealers in general are foursquare supporters of the Republican incumbent, President George W. Bush, while the United Steelworkers of America (USWA) union—which organizes the nation's tire and rubber workers—joins with most of organized labor in supporting the Democratic candidate, Massachusetts Sen. John F. Kerry.
But some pundits noted a greater divide between the two sides than in other elections and some concerns about the Republican contender that haven't existed in previous elections. Some representatives of more general business groups show a lack of enthusiasm for both candidates.
“People are split, and not just on balance,” said Roy Littlefield, executive vice president of the Tire Industry Association. “There are such hard feelings this election. In the economy, it's a real mixed bag, and 35 percent of the campaign money from business has gone to Kerry because of concerns about the deficit and the long-term economic outlook.”
In any case, the differences between Messrs. Bush and Kerry are as pronounced as with any two presidential candidates in recent memory. The following is a brief summary of their positions, with commentary from business and labor.
Business and economy
Aside from worries about the $1.7 trillion government deficit, Mr. Bush is the business candidate all the way.
He is the candidate who put across-the-board tax cuts through Congress and wants to extend and expedite them. He also supports tort reform, incentives to business investment and ending the double taxation of dividends.
Mr. Kerry, on the other hand, is the candidate who wants to roll back tax cuts to businesses and individuals earning more than $200,000 a year, who wants to raise the national minimum wage to $7 an hour and who chose John Edwards, a trial lawyer, as his running mate.
This last thing was a particular sticking point with business. Tom Donohue, president of the U.S. Chamber of Commerce, said explicitly that his organization would endorse the incumbent president if Mr. Kerry chose Mr. Edwards.
For his part, Mr. Kerry presents himself as the candidate of fiscal responsibility, saying he will “make Washington live within a budget” and cut the deficit in half in his first term. He also claims that “98 percent of all Americans and 99 percent of American businesses will get a tax cut under the Kerry-Edwards plan,” according to the Kerry-Edwards Web site.
Some of Mr. Bush's and Mr. Kerry's economic plans sound similar, such as their plans for economic development for small business. Mr. Bush recently unveiled a plan to create “Opportunity Zones,” which would offer low-cost loans and investment incentives to areas that suffer from widespread poverty or a significant reduction in their economic bases. Mr. Kerry would create a “Small Business Opportunity” fund, as well as expanding loans and equity for small businesses and increasing the government's venture capital investments.
Nevertheless, the Bush platform is generally the more consonant with the wish lists of both major corporations and small businesses. For example, the National Federation for Independent Business (NFIB) created an issues chart that covered 11 of the issues most important to NFIB members. Those issues included repeal of the estate tax, caps on punitive damages to small businesses in product liability cases, establishment of Association Health Plans and a permanent increase in small business equipment expensing for tax purposes.
The NFIB demonstrated that Mr. Bush supported all these measures, whereas Mr. Kerry opposed all except the increase in equipment expensing. Although the NFIB doesn't endorse presidential candidates, it did issue a press release about a survey of its members. Ninety-five percent of those who responded favor Mr. Bush, a spokesman for the federation said.
George Dagnino, president of Peter Dag Investment Services Inc. in Akron and former chief economist at Goodyear, said an economic downturn has been brewing for the past year. It will happen no matter who wins the presidency, he added.
“If Bush wins—which I think will happen—there will be a Bush victory rally in the stock market,” Mr. Dagnino said. “But then he'll find himself in a weak economy come January or February. The Federal Reserve may even lower interest rates. But that will be good for Bush because he'll have a nice environment to push his tax incentives. I heard that he's even starting to tout a flat tax. That would be good; a weak economy would help him sell it, and we need something different.
“If Kerry wins, he'll find himself in the same downturn as Bush,” Mr. Dagnino predicted. “He says he wants to raise taxes, but he can't do that in a weak economy. So we'd be in a box, so to speak. I'm not sure what Kerry would do in a downturn, but Bush is more creative than Kerry in economic policy.”
Energy and environment
President Bush's Healthy Forests Initiative, which became law in December 2003, is a good example of the Bush administration's approach to environment and energy issues. The initiative includes the thinning of forest overgrowth as part of its forest rehabilitation plan, as well as safeguards for private ownership of forest land.
Environmentalists, however, claim the initiative is just a way to let loggers in through the back door at national forests. Sen. Kerry can be expected to take a more pro-environmental stance on energy and the environment, which makes business nervous.
The National Energy Policy proposed by Mr. Bush, according to the Republican National Committee (RNC) Web site, would “upgrade the nation's electrical grid, promote energy efficiency, increase energy production and provide enhanced conservation efforts, all while protecting the environment.” The Department of Energy has consulted with more than 250 electric industry executives, equipment manufacturers and federal and local officials to create the administration's National Energy Policy, the Web site stated.
Similarly, the Bush administration has proposed a “Clear Skies” initiative that, in the RNC's words, “will reduce air pollution from power plants by 70 percent while using a market-based system to keep electricity prices affordable for hardworking Americans.”
According to the Democratic National Committee (DNC) Web site, however, Mr. Bush “is letting corporate polluters that have financed his political career and their lobbyists literally write the laws and regulations that govern our air, water and land.”
The DNC makes the same accusations in the field of energy, saying, “Bush and Cheney's energy task force took the recommendations of industry lobbyists and made them the basis for their national energy policy.” Mr. Bush's oft-stated support for drilling in the Arctic National Wildlife Reserve also is a point that Democrats and environmentalists like to bring up.
The Kerry campaign has pledged its commitment to the “polluter pays” principle in Superfund cleanup, as well as “plugging enforcement loopholes” in the Clean Air Act; promoting renewable energy sources, such as wind and solar; and reducing dependence on foreign oil.
Jobs and trade
President Bush's plan to create jobs is simple: continue his economic policies exactly as they are. The RNC quotes the Council of Economic Advisers as saying that “the president's plan will help the economy to create 2.1 million jobs over the next three years.”
To say the United Steelworkers of America union is not convinced, however, is an understatement.
On its Web site, the USWA quoted the Bureau of Labor Statistics as saying the nation lost more than 1.8 million private sector jobs since Mr. Bush's election and declared the president to have the worst record on jobs since Herbert Hoover.
“I think the Bush administration has turned a blind eye to matters of fair trade,” said David McCall, USWA District I director based in Columbus. “This has been absolutely a disaster for our economy.”
Countries such as China and Brazil are dumping subsidized steel and tires in the U.S., he said, to the point that “workers can no longer afford to purchase the goods they used to make.”
Mr. Kerry—who enjoys the USWA's unequivocal support—has promised he will work to keep jobs in the U.S. and to make foreign countries honor trade agreements with the U.S. But one business organization doesn't trust Mr. Kerry any more than Mr. Bush in the area of trade.
“We think they're both awful,” said Alan Tonelson, research fellow with the United States Business and Industry Council (USBIC), an organization of about 500 small- and medium-sized manufacturers. “Neither candidate has come close to staking out a serious position on trade…. If you go to their Web sites, you'll see lip service to trade, position papers, laundry lists. But you'll see none of the positions we support.”
USBIC's members tend to be “a quite conservative bunch,” and generally support President Bush, especially on tax issues, Mr. Tonelson said. “But the (tax) benefits are being squandered by a totally misguided trade policy designed to encourage the flow of manufacturing offshore.”
The USBIC has issued a position paper titled “To Save American Manufacturing.” It recommends such measures as a trade equalization tariff for countries running a large trade deficit with the U.S.; changing the rules of countervailing and anti-dumping duty cases to make them easier for U.S. companies to win; and setting domestic content requirements for all government procurement.
Tire industry associations as a rule do not endorse presidential candidates. However, Donald B. Shea, president of the Rubber Manufacturers Association, declined to discuss the election at all, except to mention the RMA's participation in the Prosperity Project, an effort of the Business Industry Political Action Committee, to make sure businesspeople register to vote.
“We have members on both sides of the aisle,” Mr. Shea said. “We're not into endorsement, but encouragement.”