Why you should care
Because Democrats want to remind us that they are capitalists too, even in the age of Bernie Sanders.
Consider the hits establishment Democrats have taken lately: Bernie Sanders coming in from the left, assailing big banks and capitalists. Donald Trump from the (ostensible) right, assailing free-trade agreements. Both of them inspiring hand-wringing and/or exultation and sucking up the media airwaves.
In Delaware, Gov. Jack Markell is trying to tell a different story — about how Democrats can position themselves as capitalists without losing their blue core. Easier for him to see than others, perhaps: Delaware is the corporate capital of the United States, with businesses from all over the country seeking to incorporate under its laws and providing the tiny state with a big chunk of its revenue. Nonetheless, what Markell preaches — from minimum wage laws to trade agreements to investment in human capital — could arguably be applied to most states. OZY sat down with the former three-term state treasurer and the nation’s only current Jewish governor to talk about what it means to be a pro-growth progressive. The transcript of this interview has been edited and condensed.
OZY: How can Democrats combat the stigma that they aren’t as pro-growth as their counterparts on the other side of the aisle?
Jack Markell: Unfortunately, a lot of the energy in our party is way to the left. We need a higher minimum wage, but that’s not the way you’re going to grow the economy. There’s so much more to it. I think the focus on economic inequality is a good place for us all to be focused, because it is a real problem. But if you’re going to come up with the right solutions, you have to come up with the right diagnosis for why the problem exists.
OZY: And why does it exist?
J.M.: There are two structural forces at work in our economy: One, employers have more choices than ever before about where they’re going to hire. Jobs that 30 years ago would have gone by default to the U.S. or Canada, or Western Europe, companies now have dozens of choices around the globe on where to take them. Number two, we all carry these powerful computers in our pockets, which has fundamentally changed the way people get work done. We have employers in our state producing twice as much as they produced 10 years ago, and they need half as many people to do it. Is it any wonder that wages are stagnant?
The question is: What do you do? One, you invest in a significant way in skills. Two, connect effectively with the world. More focus on exports, more focus on attracting investment.
OZY: Delaware has, for a long time, drawn companies in with its favorable corporate finance and taxation laws. But a recent report says that the U.S. has supplanted the Cayman Islands and Singapore as a “haven for assets of super-rich,” and Delaware is one of the states cited as contributing to that status. Is that a problem?
J.M.: There’s a general lack of understanding of why Delaware is the favored place for corporations. It’s really three things: Our corporate law is the best understood of any corporate law in the country. In law schools, they learn about the Delaware law. Second, we have the best judges in the country. That’s not just my gubernatorial bias, that’s been determined by the chamber of commerce over a long period of time. Third, our division of corporations is extraordinary. It’s a very friendly setup for corporate clients.
OZY: You recently signed into law a bill that protects so-called public benefit corporations, one of the first in the country. What’s important about this?
J.M.: Literally, as created by state law, it’s a new type of corporation that by its definition explicitly identities and says that it cares about profits and cares about these other benefits. It hasn’t been tested yet in the courts, but it is very interesting. They define in their charter documents what that public benefit is. It’s grown — it’s not going to be a huge part of the public corporation business, but it’s exciting that there is this new type of program.
OZY: You were also the chairman of the Democratic Governors Association in 2010. Since President Obama took office, Republicans have gone from holding 19 governor mansions to 31. What do Democrats need to do better to compete?
J.M.: Where we have gotten crushed is with fundraising from individuals. If you look at the fundraising for the DGA relative to the RGA, in terms of corporate money it’s pretty even, but that doesn’t mean a staunchly Republican CEO feels the same compulsion to split evenly. In this business, if you’re at that much of a financial disadvantage, it’s a problem. When I was chair, we lost Iowa and Ohio. [In] 2014, we lost Maryland, Massachusetts, Illinois. They were really tough environments for Democrats, and those were tough races to lose.
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