Divided government would be good for business

Good morning.

The financial markets have decided that divided government—with Democrats winning the White House and Republicans holding the Senate—is a good thing for business. (Read this and this.) I’m inclined to agree. A “blue wave,” with Democrats controlling both houses of Congress, would have left a President Biden vulnerable to the anti-business demands of his left wing. A mixed result means if elected, he will have to reckon with Mitch McConnell—which either leads to gridlock, or, more hopefully, to a much-needed effort at reconciliation and more centrist policies.

Infrastructure would be a good place to start. And I’m not just talking roads and bridges. The pandemic has exposed an urgent need for universal broadband, so those in inner cities and rural areas can fully participate in the digital revolution. Investment in green energy would help address the risks of climate change, and has some bipartisan support. A focus on financing public-private training platforms that provide alternative pathways to good jobs for those left behind by the technology revolution should be embraced on both sides of the great divide. Given current low interest rates and ample capital, borrowing to fund such urgent priorities should be a great opportunity for a new President to use whatever limited political capital this fractious election leaves him to make bipartisan progress.

In any event, divided power in Washington likely means the pressure on CEOs to step up on social issues will continue. I talked yesterday with Joshua Bolten, CEO of the Business Roundtable, which last year revised its definition of the purpose of business to give multiple “stakeholders” a standing on a par with shareholders. Bolten says the tumultuous events of the past year have only increased his members’ commitment to that cause.

“All three of the crises—the health crisis, the economic crisis, and the latest chapter in the crisis of racial equity—have prompted the CEOs to revert even more than they had been to the full breadth of their stakeholders. All three of those crises were pan-crises. The pan-crises have made them lean in” to stakeholder capitalism, he said.

And since it is Friday, some feedback—especially to yesterday’s post about the election results. I liked this one, with apologies to Dave Mason:

“Clearly there is NO mandate and the nation is remarkably divided. We the people need to get back to dialogue…There are no good guys, there are no bad guys; there’s only you and me and we just disagree.”

Less conciliatory was this one:

“When you on the Left finally acknowledge your insatiable need to usurp power over all of us maybe then a discussion of ‘sense of community’ can begin.”

—RA

And finally this:

“If you ever learned anything from history class, you would understand we have always been a nation divided. Both major parties are to blame.”

—DA

More news below.

Alan Murray
@alansmurray

alan.murray@fortune.com

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