A country’s stability and growth on the global scale is highly dependent on its political climate. If the businesses and industries in a country thrive, the country will be progressive and economically stable. Political divisiveness or political polarisation is found in every country whether it is operating on a democratic or totalitarian system. In the United States of America, there is a political divide between the Republicans (Conservatives) and the Democrats (Liberals). This divide has had an impact on the country’s businesses since many decades. This blog post explains the various ways through which the businesses in the US are being adversely affected by the political divisiveness between the two major political groups.
When political ideologies are different, it is quite obvious that any time a political party with a different ideology comes into power there will be major changes in how the country is governed.
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Economic Growth
The political divide in the US is directly affecting the economic growth of the country. The businesses in the country rely upon the stock market stability that in turn relies upon the political stability. If the stock market is continuously fluctuating, the businesses will be unsure of when and where to invest their capital. This is especially true during the election period. The period few months before and after the elections is the most confusing time for the businesses operating in the country. The businesses and in turn the economic growth suffers the most during this uncertain political time.
Trade Policy
Businesses are highly affected by the policies that are put into place by different political parties. The trade policy of the Democrats is different from that of the Republicans and as a result the shift in power makes the businesses revise their policies too. The inability of the country’s political parties to overcome this political divide prevents the exponential growth of the businesses. With every change of government, the trade policy is challenged and in certain cases the policy of the individual businesses need to be started right from the scratch.
Tax Policy
Another contention that arises due to the US political divide is the varied tax policy. One political party may propose a Bill that will call for a cut in the taxes and the other may advocate an increase in the taxes. This rift creates further problems for the businesses operating in the country. Businesses have to take in consideration both the federal and state tax policies. The rise or cut in taxes prevent the businesses from predicting their growth during any specific period. Another factor of continually changing tax policy is the lack of consumer reliability. Majority of the consumers will not be aware of the consequences of change in political party. They can end up abandoning their loyalty towards a particular business because of the inconsistent pricing patterns of that company/business.
Healthcare Policy
The two major political factions in the United States have a contrasting healthcare policy. One may think that how healthcare policy can be detrimental to a business. Majority of the US companies provide healthcare benefits to employees. The businesses cannot provide consistent health benefits to its employees because any political party can call for a different healthcare policy. Recently, healthcare has been a cause of great debate in the US as people can be stripped off important health benefits due to change in the healthcare policy. If an employee’s contract states the provision of certain health benefits but the change in health policy causes the removal of such, the business/employer will have to manage on own rather than the state.
Regulatory Standards
The regulatory standards of one political party differ from that of the other and this creates an uncertain environment for businesses. One party may have strict regulatory standards and the company policy will be modified in accordance with that. This may change in the next two, four or six years and a business will have to revise accordingly to reap the maximum benefit out of the relaxed regulatory standards. The regulations put in place by the government directly affect the businesses and thus the economic growth of the country.
Political difference in any place is essential and natural but a political divide must not interfere with the growth of a country. The change in policies put in place by different political parties directly affects the progress of different industries across the spectrum. The US political divide must rise beyond the differences that affect the businesses for the progress of the businesses that keep the country’s economy afloat and flourishing.