On a micro level, each business is best served by keeping its costs low, which is consistent with the tax cuts and deregulation promised by the GOP. On a macro level, however, if businesses are successful in holding down wages, American workers won’t have enough money to buy anything, and sales fall. You wind up with a dysfunctional economy built on soaring asset prices and dollar stores. That is a classic tragedy of the commons.
Whether the GOP likes it or not, only government action can resolve a tragedy of the commons. That is precisely what Biden is trying to do. Most businesses, however, are still stuck in tax cut and deregulation mode. They are opposing the infrastructure bill, because they hate the tax increases.
Do they have a point? I will discuss that in a future post.