NRO Staff Writer Nate Hochman rejoins the podcast to talk through his extensive reporting on the influence of big business in red states and the mechanics of how lobbyists have overridden socially conservative voter interests in states with large GOP majorities. Inez and Nate then discuss what recent exposés and triumphs on popular issues — such as barring minor medical “transition” — mean about how that old dynamic is changing, and what that portends for both parties and the county.
High Noon is an intellectual download featuring conversations that make possible a free society. The podcast features interesting thinkers from all parts of the political spectrum to discuss the most controversial subjects of the day in a way that hopes to advance our common American future. Hosted by Inez Stepman of Independent Women’s Forum.
Welcome to High Noon where we talk about controversial subjects with interesting people. And you might remember Nate Hochman from the last time who was on here talking about the future of the post religious right. But he’s a staff writer at National Review and a Publius fellow with Claremont Institute. You may have a seen his various reporting and opinion columns all over, even some places like the New York Times. But I wanted to have him back on to talk about his stellar reporting on a series of bills in South Dakota and kind of the story of a particular political battle in South Dakota over gender ideology. But I think it’s much more relevant than just the single issue. I think it says so much about the Republican Party, the forces operating within the Republican Party that are somewhat behind the scenes. I think his reporting on this has been a must read and must understand for every person who objects to leftist cultural hegemony in the United States.
So let’s start at the beginning, Nate, with the simple women’s sports bill a couple years back in a red state, South Dakota. All it did was ban biological males from women’s sports. What happened next?
Well, so just the pretext just so listeners understand how red South Dakota is. One of the things I was pointing out in my reporting is by ideology, it’s the third most conservative state in the country. So it really does not get more right-wing than South Dakota with a couple of exceptions. Republican super majorities in both chambers of legislature since 1996. This is a deep red super conservative state.
There’s also polling to suggest that this women’s sports bill that we’re talking about in early 2021 was popular as you’d expect from a state that red. But when it got to Kristi Noem’s desk, she vetoed it. Kristi Noem at this time now, people have a lot of doubts about her, I think, partially for the reason of her veto, but at the time she was a rising star in the GOP because her kind of self presented public persona was as one governor who didn’t lock down her state during COVID. And it’s true that South Dakota didn’t lock down, although that was for reasons not having to do with Kristi Noem, which we can get into later. But she was sort of seen as a conservative fighter. So it took a lot of conservatives, including a lot of conservatives who were fans of hers by surprise that she would veto this bill, which seems like common sense, right? Biological males in women’s sports, just like an easy conservative win.
What some reporting that I did and some reporting that some other intrepid conservative journalists did revealed was that a large part of her motivations with the veto was her very close relationship to Sanford Health, which is by far the largest employer in the state of South Dakota by a degree of almost 700%. It’s this big healthcare pharmaceutical company based in Sioux Falls. It had vested interests in a variety of aspects of the transgender agenda. It sold and profited off of puberty blockers for minors, sex change surgeries, et cetera, et cetera, performed sex change surgeries in the state even. But it also had just announced on the same day that Kristi Noem issued her veto $100 plus million expansion of Sanford Sports Complex, which is I think the largest sports complex in the state of South Dakota, which had brought some of the first NCAA games to the state.
If you sort of follow the history of these fights at the state level, the NCAA had boycotted states like North Carolina in the past for similar transgender bills. So they stood to lose a lot of money from that as well as being bought into the transgender agenda at large. And Kristi Noem had very close relationships with them, as did a lot of South Dakota Republicans. Her closest advisor in her office was a registered Sanford lobbyist. I had people inside Noem’s office feeding me stories about how they had seen this advisor/Sanford lobbyists come in and kill social conservatives’ bills before including lobbying internally against this women’s sports bill.
So top to bottom, the story of this veto was really the larger story of the influence of this very culturally left-wing company based in Sioux Falls in South Dakota. What we learned both from the known veto and then subsequent stories is that very left-wing interest had its talons in a large part of the South Dakota GOP, which is why the South Dakota GOP has been so reticent up until now to really do anything on transgender issues because they know where their bread is buttered.
I mean, this is obviously a story about corporate influence. The Republican Party has had a long… I mean even before our current era of politics, Republican Party has been identified as the party of business for a long time. There are lots of indices where red states compete on who has the best business climate. There are a lot of benefits that are handed out by red states to various large corporations. This relationship kind of worked for a long time between the Republican Party, especially in small red states, attracting large corporations to that state. Obviously, there are economic benefits to doing that for the people of that state. Texas famously hands out tax benefits left and right for companies coming to the state. But as the business sector became more and more culturally left-wing for a variety of reasons, institutionally culturally left-wing, they have started to essentially use those relationships that were formed over economic interest on these cultural issues. So what happened once you initially reported that Sanford Health had a large hand in killing this very popular initiative in South Dakota and had done it through Republicans?
Right. So you’re absolutely right. This is something I’ve pointed out before, that relationship between the big business interests at the state level and at the national level, the kind of chamber of commerce wing of the GOP in a lot of business Republicans made more sense in an era where you didn’t have big business lobbying for things like youth sex changes. I still think that even if you look at back in the ’90s when the chamber of commerce was kind of a solidly Republican constituency, there were real places where the business community’s interests were at odds with conservatives, most notably immigration, right? If you look at the kind of Bush amnesty push in the early aughts, that was all the chamber of commerce and their front of associated groups because they profit from it and benefit massively from importing a lot of cheap labor.
So there were always places where they broke, but it kind of made sense even if Chamber of Commerce, Republicans aren’t my kind of Republican, that they were kind of a constituency within the GOP. What you’ve seen, as everyone I’m sure who watches your show is familiar with, as big businesses moved radically to the left on cultural issues, whether it’s kind of DEI and CRT, BLM, the trans issue, you name it, you’ve seen some Republicans, particularly at the state level who kind of occupy that Chamber of Commerce wing, move left with them rather than drawing a line in the sand and saying, “No, we’re not going to follow you left.” And that’s what happened with a lot of South Dakota Republicans.
So this Noem veto, she got an enormous amount of backlash, deservedly so for it. Not just from me. I mean, I spent a couple months on this really sort of in-depth investigation about her relationship to Sanford. But even just at face value, you had everyone from Tucker Carlson, to the Federalist, to all the kind of major right-wing pundits kind of taking Noem to the cleaners for this veto because it was just the wrong move regardless of what the motivation was. And to her credit, she did end up coming around to the right position and reintroducing basically analogous bill that got signed the next legislative session I believe that did ban biological males in women’s sports.
So it is the law of the land in South Dakota now, but I think what that episode represented is just that the incentive structure, particularly at the state level where there’s a lot of Republicans, kind of local lawmakers, are under much less scrutiny from conservative media, conservative constituents, et cetera. A lot of voters in states like South Dakota think understandably that if you vote for someone within an R next to their name, they’re going to fight for your values. Whereas obviously if you look at episodes like this one, that’s not always the case. But the incentive structure until that scrutiny is applied is to basically go along with business because they’re the powerful interests in that state. They’re the ones who are donating to your campaign. They’re the ones that are all at all the big fundraisers. So their worldview kind of just becomes your worldview.
And unfortunately in issues like this one, people like Kristi Noem weren’t going to do the right thing until someone basically made them do the right thing, and eventually she did. But it was evidence of the sort of preexisting incentive structure which militates in favor of some very not conservative and even radical things in cases like this one.
Yeah, the only comparison that I can think of from the pre political era other than the immigration comparison, which is just not on the state level as much, I mean obviously there are states dealing very much with the impact of unrestrained immigration, but obviously ultimately immigration policy is at least supposed to be set by the federal government. The other example of this kind of dynamic that I saw which had nothing to do with private industry actually was in red states over school choice, because in a lot of red states there were some very powerful lobbying interests associated with the public schools and also superintendent associations and various other associations of school adjacent. At some point, this pulled apart, right? As the schools went more and more culturally left-wing, and obviously COVID completely blew this up and the shutdowns of the schools completely blew up this kind of relationship between the teachers’ unions, between superintendents, between generally public school interests in states and Republicans, but prior to that, there was a very cozy relationship between this.
And to some extent, it makes sense, right? These are [inaudible] districts. The school district is the largest employer of people in that district. So it makes sense that there are some legitimate interests to balance here is what I’m saying. It’s not only the lobbying and the big dollars. There’s also, especially for a small state like South Dakota, there’s the legitimate business interest. You don’t want to collapse employment in your state by having something like Sanford Health pull out of your state, right?
But how do Republicans or conservatives successfully navigate those kinds of contradictory incentives when they’re not just sort of orthogonal? These business interests are now no longer just orthogonal to other conservative interests. They’re actively some of the most powerful interests opposing conservatives on things as fundamental as male and female biology on things as fundamental as, for example, like BLM was another one, racial issues, another fault line where you had a lot of these corporations actively lobbying or voting laws, for example. Another example where Delta was actively lobbying in the Georgia legislature against a bill to tighten up election security and then threatened to pull out. There was an interesting pushback as well.
But how do you see these kinds of relationships developing going forward or changing going forward? Because it seems like especially with your reporting and with other people’s reporting, this is coming to a head, right? These fights are becoming public and cannot be done behind closed doors the way even three years ago I think a lot of these deals were done before,ugar
behind closed doors. Now average voters are much, much more suspicious of business interest.
Yeah, as they should be if you look at what’s happened in recent years. I mean, you brought up the fight in Georgia, obviously the DeSantis versus Disney stare down over the so-called Don’t Say Gay bill. The Parental Rights in Education bill was another big example. What DeSantis, I think, demonstrated, and to be fair, Brian Kemp as well who stood up to Delta and these other big businesses and MLB, was that actually if you do stand up to these business interests that are militating against the interests of your voters, your voters will reward you for it. What Republican voters are desperate for is a strong Republican leaders who are willing to represent them rather than business interests. They’re so desperate for it that in the rare, but I think in a welcome way, increasingly sort of frequent examples of Republicans actually standing up to them, they will see them as heroes. And that’s a large part of how DeSantis has certainly built his brand.
I have a long essay about a lot of this stuff coming out in I think the next issue of the National Review magazine. I’m kind of tracing the genealogy of the GOP’s relationship to left-wing business interests. The first kind of high profile example you saw of this new phenomenon where these powerful business interests in conjunction with powerful left-wing activist groups and an activist left-wing media sort of parachute into red states and overrule the kind of democratic process was the RFRA fight in Indiana in 2015, the Religious Freedom Restoration Act. The same sort of bill or an analogous bill I think had been passed in 17 states already. It was an easy gimme kind of conservative religious liberty expansion bill in Indiana. The governor at the time was Mike Pence, who was ostensibly kind of a rock ribbed man of the religious right. It passed the Indiana legislature, I think, by super majority margins.
And then there’s this massive backlash, threats of boycotts from all of the big Indiana businesses, a flurry of negative media coverage in the national press. People poured out into the streets and protests kind of spurred on by these activist groups. Within I think three days they were signing this RFRA fix, Pence was, that had also just passed through the legislature that wrote sexual orientation and gender identity into the state anti-discrimination law for the first time in Indiana history. So that was a big kind of, I think, moment for conservatives kind of stepping back and going, “Whoa, I think we need to reassess our relationship with these business interests that we’ve traditionally kind of gone along with because they are militating for these extremely anti-conservative initiatives.”
You saw it again in North Carolina I think in 2017 or 2018 with the bathroom bill that banned transgender bathroom use. Basically it mandated that bathroom use correspond with biological birth sex. That lasted for a year rather than three days. So it did a little bit better than the Indiana RFRA bill. But the same thing happened, threats of boycotts. I think some actual boycotts materialized. North Carolina Democrats along with the Chamber of Commerce wing of the North Carolina GOP, which in a lot of state GOPs is sometimes even the majority of the GOP, deep red states aren’t always very conservative states if you actually look under the hood, they rewrote it because they were more concerned kind of about the business interests that they were cozy with and their interests than social conservatism. And then obviously, South Dakota was another example of this.
So I’m glad you brought up the fact that there are legitimate interests to be represented because I think lobbyists completely deservedly have a bad name and people use the term lobbyist kind of almost like a cuss word, right? The way people talk about them. And that’s for good reason. I mean, I just spent three months doing a reporting project about how awful these lobbyists were in South Dakota. But kind of lobbying properly understood is just the representation of a particular interest in the kind of democratic process, right? So you have a business community that has shared interests or a school district that has shared interests and they kind of band together. They make a group for lobbying and they go to the state capitol or whatever and they explain their particular perspective on an issue and how a particular piece of legislation is going to affect their kind of participation in public life.
It’s a really important actual tool for legislators to understand these competing interests, right? Like, “Okay, so this legislation passes. It’s going to have this effect on schools. It’s going to have this effect on business, et cetera.” But what legislators are supposed to do is consult those different competing interests and kind of hear them out and then make the decision in terms of what’s best for their community and their state. And ultimately, if you’re in a deep red state and you’re a Republican who claims to be a conservative, for basic conservative ideas about human nature, community politics, et cetera. What you’ve seen instead, again in the kind of chamber of commerce swinging the GOP in places like South Dakota, is that their word is basically just law, right?
What Sanford says for a segment of the most powerful Republicans in South Dakota, “That’s just what we do because it’s Sanford and that’s how we’ve done things for a very long time.” That’s not what originally lobbying was supposed to represent. It’s not what self-government is supposed to look like when the people who elected you are getting something very different than they thought they were getting when they actually voted for you and very different than what you promised them when you campaigned for their votes. And very different than the actual interests of your state. You’re just going along with this powerful business interest that donates to your campaign, that shows up at your fundraisers, et cetera, et cetera. And that has to end.
I think there are some good trends in the right direction because of things like the RFRA fight, the North Carolina Bathroom bill, Disney, Georgia, South Dakota. Republicans are understanding that this is no longer acceptable to Republican voters. But until you kind of consistently apply this scrutiny, there are going to be a lot of Republicans, particularly at state level, who think they can get away with it, right? Path of least resistance is often going along with a business community. The only way to change that, I think, is to change the actual incentive structure.
Yeah. I mean, something else that I think a lot of people aren’t aware of on the state level… I used to work in state level politics, not as a lobbyist but as like a policy wonk helping to deal with education bills in a wide number of states. One of the things I think of very few people realize is state legislators, almost always part-time, they’re not fully paid, they don’t have staff most of the time. So actually these lobbying interests, lobbying is very different on the state level because oftentimes they’re the only ones with the expertise to write the bill, right? So there’s all kinds of policy choices that have to be made in any given area. The legislators, because they’re not full-time, because they don’t have staff independently working for them, they develop relationships. It’s always lobbyists if it’s the other guys. It’s public interest when it’s our team, right?
But essentially these are people who have subject matter expertise. And so they’re often selling, yes, with the perspective and that’s understood by both sides, but they’re often essentially also selling their expertise matter, which on the federal level, lobbying is actually much uglier in my view because it’s mostly selling access, right? It’s, “I know this person. I have the ear of this person in power so you’re going to pay me to sherpa your issues to this person’s ear.” But still something obviously that is and probably should remain legal in the United States, but it’s a very different thing on the state level where you’re dealing with people who maybe are only earning $10,000 to do this job of legislating. They have another full-time job. They have families. This really is self-government in a large degree.
But there has been this just huge divorce, very well recognized by Republican voters, and seemingly still even today. Maybe as you’re saying, more people are becoming aware, more Republicans are being aware that this is not acceptable, that they’re actually selling the farm. They’re not just taking advice or considering business interests in all of this. They’re actually selling out their voters and that voters aren’t going to tolerate this. We’ve had a few success stories that you’re pointing to, right?
I would call RFRA a total failure, right? They passed this milquetoast bill that didn’t really do the job and it was a clear capitulation. There’s been a few success stories. One was, I think, the Delta incident in Georgia where they threatened to take, or as you said, Kemp threatened to revoke certain tax benefits, special tax benefits that Delta had for keeping its hub in Atlanta, right? That was enough to get them to some extent to back down and shut up. DeSantis, obviously sort of huge victory in this regard over Disney, which is a huge employer in the state.
What are the dynamics that made those fights? And maybe you can add if you think there have been more plus this, and we’ll get to this in a minute, that this South Dakota story that we’re focusing on has a happy ending as of just a couple days ago? That this bill did make it over the finish line despite these interests. What is changing aside from the fact I already mentioned that Republican voters are not tolerating this anymore. What is changing that we are able to win some of these battles in a way that we have until, I think, the Kemp victory, until the Georgia victory? Basically everyone, and maybe you can correct me, every one of these battles I can think of was a failure for social conservatives. They got rolled over by business interests.
Yeah. Yeah, I think before we talk about that, it’s important to sort of acknowledge the differences between these states. It gets to a lot of the really important points you’re making about the reason that lobbyists have so much sway in a lot of these state capitals. South Dakota is a state with less than a million full-time residents. It’s extremely rural. Sanford Health is really the only game in town. The reason that it employs almost seven times more than anything else in the state is just because there aren’t big business interests except for Sanford in the state. Legislators are part-time. They get paid, I think, like $14,000 at least for base pay in terms of their actual salary for the legislature.
And you had people who are actually full-time Sanford employees working in the legislature as elected Republicans, including one who is a public affairs specialist, which basically just means lobbyist, although he’s not actually registered as a lobbyist who was… There was no kind of division between his job as a Sanford representative who was supposed to be actively sort of lobbying for Sanford interests and his job as a legislator. So what do you think he’s going to do when he’s paid something like $65,000 from Sanford and $14,000 from his job as a legislator? Who do you think he’s going to primarily be loyal to when he actually goes and tries to do the people’s business in the state capital? Probably the people who are paying him exponentially more and the people who are his full-time job, which is Sanford.
So because the legislature is part-time like it is in a lot of states, because South Dakota’s a very small, sparsely populated rural state without a lot of big institutions, the business interests in that state, specifically Sanford and its kind of activist counterparts, hold a disproportionate sway on how legislators do business. If you look at Florida or Georgia, and I think we should give Kemp and DeSantis all the credit that they’re due for standing up to these business interests, it was not an easy decision, but Disney’s a big business interest but it’s not the only game in town in Florida, right? I mean, Florida has Miami, it has all these other big kind of attractions. There are ton of different competing interests. Disney is only one, right? Same thing in Georgia, right? Atlanta’s a major metropolis. And something like MLB or Delta, they’re important, but they’re not the only game in town.
So one of the problems that I think red states generally face, although there’s a lot of diversity that we just talked about, is the fact they often are more rural, often are more sparsely populated. That means that these really powerful business interests, often with kind of national profiles… Sanford, I think, it’s a multi-billion dollar company. I don’t want to misstate exactly how much it’s worth. Just their power is much more pronounced than something like New York or California where they’d be up against a lot of other equally powerful interests.
So that again, it’s about an incentive structure. The incentive structure if you’re a South Dakota Republican, I’m not giving them a free pass but I think it’s important to sort of understand the dynamic, is one in which if you do something that gets on the wrong side of Sanford, the consequences are going to be much more significant than if you just go along with them. The reason I think that you’re starting to see a shift, although we still have a long way to go, and I’m sure we’re going to see more losses like this before the entire GOP gets on board, is that there’s increasing scrutiny from Republican voters who are just completely fed up with this.
If you look at polling, Republican voter trust in big businesses and institutions has precipitously dropped in the last few years. There’s more scrutiny from conservative media as well, which is kind of following this trend as well. That means that there are actually real political consequences now for going along with Sanford when it’s at odds with conservative interests. And that means that if you’re kind of a Republican state legislator or a governor like Kristi Noem, you have to take that into account when you’re making a decision. It’s not just an easy kind of consequence-free move to go along with Sanford.
Kristi Noem and some other South Dakota Republicans learn that the hard way. But the hope is that going forward, other Republicans who might be inclined to do that, look at something like that as an example and understand that there are going to be consequences if they go along with big business when it’s militating for left-wing cultural agendas and they make the right decision. I think that changing incentive structure is kind of happening. It’s in the process of happening right now. Whoop. Inez, you’re frozen. Super frozen. Oh.
Okay. Can you hear me now?
Oh yeah, you’re back.
Yeah, it’s my internet unfortunately.
Okay. I assume with the recording I won’t cut out because it’s like different recordings?
Yeah. Yeah. It’ll… Yeah, I think it happened after you closed your point, at least it did on my end. Okay.
So what I was thinking about when you were talking about the issues that rural states and small states are having with us, the very real problem of balancing these interests is the flag of the colonies during the Revolutionary War, unite or die. Is there a role for some kind of coordination between red states on these kinds of issues? Because some of these seem so local, right? Sanford is not a big power player in all 50 states, right? I don’t know which legislatures it is, but I would imagine its power is very focused in South Dakota. But there just seems to be a lot of benefit to red states coordinating on issues like this where let’s say there’s a company that’s threatening to pull out or to boycott on some cultural conservative issue.
At any one of these states, if there was some kind of solidarity between a bunch of these Republican states, well, I mean because of the fiscal conservatism relatively of the Republican Party for the last several decades, I can imagine a situation in which you’re only option if you’re one of these corporations and you want to pull out of a red state over a cultural issue, if there was some kind of solidarity between these different states, then your only options would be to go somewhere with a substantially higher tax burden, substantially higher regulatory burden. In other words, there would be a cost extracted for your activism. No longer can you just slap up the BLM, whatever, statement. No longer can you call Georgia’s voting laws Jim Crow 2.0, right? No longer can you lobby for the mutilation of minors in South Dakota without essentially having to make your bed with the new party that you are benefiting, right? Align your cultural views. “Okay, well then also you’re going to pay California and New York taxes,” right? Make it a real financial cost.
Do you see any potential for that kind of solidarity between red states? Because it seems to me that these states like South Dakota, I mean Kristi Noem aside, I think she was completely, reading your reporting on this and others’ reporting on this. I’m no way excusing her behavior, but I do think there’s a very real balancing problem here, especially the smaller your state is and the fewer business interests are aligned or based in that state. So is there the potential for red states to help each other out here? Or is this by nature, have you discovered that it’s just so individual? In other words, Delta is so important specifically in Georgia, but maybe very not important to a bunch of other cities. Is there any room for alignment on this, I guess is what I would say.
Yeah. To your point about Noem, to be clear, it would be devastating for South Dakota if Sanford left, right? I mean, largest employer by degree of, like I said, almost seven times. Largest philanthropist in the state. The state’s richest man is T. Denny Sanford who also is, I think, currently in court for a child porn charge, which is a completely different, very weird situation. But he is a philanthropist. Sanford’s name is on everything. They have the hospitals, et cetera, right? It would completely decimate South Dakota civil society. But I don’t think Sanford is going to leave because… And I think this gets to your point, this is why I think Republicans can feel confident standing up to a lot of these companies particularly in the situation of Sanford in Sioux Falls. The corporate executives care much more ultimately about their bottom line than these kind of boutique cultural activist issues.
It’s also a question of incentive structure. The reason a lot of these corporate… For the most part, at the highest level, at the C-suite level, corporate executives aren’t really true believers, right? They are also following the path of least resistance. And for the past few decades, the path of least resistance is go along with left-wing activists because the kind of formula that was built in was, “well, you can kind of run roughshod over social conservatives because they’re never going to do anything, right? They’re going to cut your taxes anyways and give you tax benefits to move to the state.” But if you run roughshod over these left-wing activist groups, it’s going to be a big problem and you’re going to get punished for it.
Republicans pushing back, I don’t think is going to get something like Sanford Health leaving South Dakota. It’s just going to make corporate executives more reticent to engage in this because they understand that, to your point, it would be much more devastating to have to pay New York or California tax rates than it would to just abandon lobbying for the mutilation of the 12-year old boys and girls.
So understanding that that is not really a real risk for most of these states. The idea of coordination I think is great. I’d have to think more specifically about what that would look like in terms of a material, governors getting together and coming up with some kind of plan. But if all of the Republican states get on board with the program and get on board with the agenda and start pushing back on this, you’re going to completely change the broader paradigm in the country because all of these major corporations that are based in Republican states because they like their tax rates are going to realize kind of collectively, because all these corporate executives hang out with each other, they go to the same conferences, they’re part of the same sort of social strata, are going to realize that you can’t get away with just walking all over social conservatives anymore. I think that they are going to slowly but surely change their tune.
Now, I don’t mean to be naively optimistic, right? There’s extremely powerful set of entrenched and influential interests that are pushing these trends. It’s kind of the generational challenge of our time to actually overcome those interests. But it is kind of the first step in the long march back through the institutions for Republican governors to make it clear that we’re not working with the incentive structure of 2010 anymore or even 1990 and that in all of their different states, this is now the red line that you’re not going to cross, right? And if you want to continue to enjoy our tax rates, which you do, and you don’t want to have to pay California tax rates, you’re going to have to check the transgender activism, the BLM, the DEI, the CRT at the door, and then we can kind of have a healthier relationship reverting to the kind of relationship that we had in the past.
So I had Darel E. Paul on this podcast talking about the dynamics within these companies. As you said the CEOs are not activists. I think that’s true for the most part today, but they’re responding to their own incentive structures. In other words, the factor here is going to be their workforce. So now we have a much more remote workforce. Especially with larger corporations, a lot of these companies may have a large percentage of their professionals, either they will be living in blue states anyway or they will have come through universities. They will be just as left-wing as Californians and New Yorkers, right? The specific band of managerial and professional types that a certain type of large, for example, tech companies or other large kind of national or multinational corporations are hiring are going to have very dedicated beliefs about, as we say, mutilating children and permitting gender affirming care. Sorry, I can hear my cat. So these companies are going to have internal pressure building as well to make those decisions.
How is the reality of these corporations and their workforces going to start impacting this? Because on the one hand you could say maybe it’s better if they just have a large part of their workforce in California. They won’t have as strong influence within these states. But on the other hand, to the extent that they are still large employers and they are still building stadiums and putting their names on things and et cetera, et cetera, they may be governed more by the interests of their professional class within the corporation, even then preferring a 15% tax rate to a 38% one?
Absolutely. This is why I don’t want to be naively optimistic because like I said, this really is the challenge of our time in terms of the war for the preservation of American self-government. The pressures and the kind of classes and interests in these major kind of Fortune 500 or just a step below Fortune 500 corporations that are pushing them towards this radicalism, it comes from a couple different sort of groups that are both internal and external. So internally it’s coming disproportionately from the younger employees who are coming in from elite college campuses with a much more radical and aggressive worldview than their predecessors who also were often less likely to come from elite college campuses in the first place.
And it’s worth noting also generally this kind of disposition towards deferential attitudes towards hierarchy and authority that make them much less likely to cede any of these issues to the executives, right? They were formed on college campuses in an era where it was encouraged for students to yell at professors and form these activist groups and do sit-ins, the administration demanding Black studies or something like that, right? That’s the kind of ethos that they were formed within. The result of that is that they are much more militant, even just a year or two after coming to the company and pushing for this stuff because that was their cultural heritage.
So it’s younger employees who are woker, to use the kind of term of art, and more aggressive in lobbying for their cultural agenda. It’s this kind of strata that exists across different corporations and inside and out of them that’s kind of like the HR DEI bureaucracy. A lot of corporations now have built basically the equivalent of what they have on college campuses, which are diversity and inclusion bureaucracies, which their entire function basically is to agitate within a company for these policies both internally and externally to turn these corporations into activist lobbying groups. They also exist externally in terms of the DEI consultants that these companies are kind of bullied into bringing in.
And then the other external pressures that they get are these major national activist groups, which their bread and butter again is basically coming to corporate executives and saying, “We’re going to make your lives hell if you don’t support this, if you don’t boycott this, if you don’t lobby this.” That’s precisely what we saw in the Indiana RFRA fight. It was a bunch of corporations who, initially when RFRA was going through, didn’t have anything to say about it. It wasn’t even on their radar. And then a bunch of national activist groups, the Human Rights Campaign, ACLU, et cetera, Kings Corporation said, “You’re going to boycott Indiana or you’re going to be on the front page of our website tomorrow and you’re going to be getting calls,” et cetera.
So that’s a very, very powerful set of coalition of different forces that are pushing these corporations in the wrong direction. Corporate executives, insofar as I think most, although there are plenty of exceptions, aren’t true believers, are kind of facing a time for choosing. They have to decide if they are going to sort of bend the knee and take this from the activists understanding that that means their tax rates are going to get jacked up, their regulatory environment is going to be awful because they’re going to have to move to California if Republicans stand up to them, or if they’re going to kind of draw the line and say, “If you want to work here, if you want to enjoy a six-figure salary and the prestige that comes from working at X company, you have to check this kind of cultural militancy at the door as well.”
And you’ve seen a little bit of that, right? There’s some high profile examples of Netflix basically saying, “We’re going to stop this craziness. We’re just going to go back to being Netflix.” There are a couple other examples as well. But it’s very much an open question. I wish I had a more optimistic answer about this is going to happen. It’s very much an open question as to whether or not they’re going to do that. I think that, again, the sort of coordination question, it has a lot to do with how many of those corporations do it. It’s kind of like a prisoner’s dilemma. If one corporate executive stands up and does it and no one else does, he’s going to get thrown to the lions. But if these activists, sort of militant foot soldiers who are coming into the company, suddenly face an entire environment in which all the corporate executives are saying, “We’re not going to do this anymore,” they don’t really have anywhere to go. So that will also be a really interesting trend to watch for the next decade or so.
So this particular story has a happy ending in South Dakota. Could you tell us what are the events in South Dakota over this bill, or this concept I should say because there were two different bills involved, three actually? But what’s the conclusion of this particular fight with these particular interests and what’s happened in the last few days?
So yesterday, Kristi Noem signed this new Help Not Harm Bill, which is a ban on so-called gender affirming care for minors. It’s either under 16 or under 18. And also a right of action, I think importantly, opening up the ability of victims of these procedures who were kind of carted into the doctor’s office because they had a mental health issue, pumped full of puberty blockers, woke up five years later and realized it was a horrible mistake, to sue their doctors who engaged in that, which again, major shift in the way that the doctors who are engaging in this stuff and the healthcare companies they hail from actually will think about their job in this area, at least in South Dakota.
It was a major victory because almost the exact same bill got killed in the Senate Health and Human Services Committee in South Dakota in 2020. And Noem almost certainly would’ve vetoed it if it had passed that committee. That committee is also populated by Sanford loyalists. And Noem, I think explicitly criticized it, but it never got to her desk. Until that women’s sports bill she vetoed, she’s been able to evade scrutiny because usually she relies on her allies and legislature to kill it before it gets to her desk. But it made it through the Senate Human Services Committee this time after our piece kind of made a splash. And Noem knew that if she vetoed it she’d have hell to pay. So she signed it eventually as well.
So that again is, that’s the second time that scrutiny has basically worked in South Dakota, right? The first was a Women’s Sports bill, and the second was this Help Not Harm Bill. What it shows is that I think a lot of these Republicans will do the right thing if you drag them kicking and screaming to do the right thing eventually, because again, the incentive structure has shifted. But a lot of them won’t do the right thing until scrutiny is applied. A lot of Republican voters have better things to do than spend months like I did digging through different kind of congressional hearings and lobbying reports and expenditures, et cetera.
So this is where I think at the risk of being self flattering to my profession, which I don’t want to do, this is where I think conservative media actually has a really important role to play because you can have a major effect because Republican voters get their news disproportionately from conservative media. That’s how they form their kind of idea of what’s going on in their state and beyond. They are not okay with this stuff, but it’s often not until someone actually takes the time and the effort to investigate it that they’re even made aware of it in the first place. I think one of the problems with conservative media is that we’re so desperate for heroes and we spend all our time attacking Democrats, which we should be doing, that we are very reticent a lot of the times to investigate Republicans, particularly Republicans that we’ve made heroes, right?
So Kristi Noem, we desperately wanted her to be this conservative fighter who stood up to lockdowns and fought the biomedical security state. No one really wanted to look at the dark side. And when I and some other folks actually did, the kind of everything changed. But it wasn’t until conservative media actually held Republicans to account that all that did change. So conservative media obviously needs to be going after Democrats, but they also need to be making sure that their party, the Republican Party is in fighting shape, because otherwise the attacks on Democrats are just going to bounce off.
Yeah, I mean I think we definitely saw that during the midterms, right? But I guess I have one final question for you on this. We’ve talked a lot about the Republican Party. And obviously in South Dakota that’s pretty much all there is. There’s a few lingering Democrats. But how is this dynamic going to change the Democratic party? Because it seems to me that a lot of corporations, they split their donations. Republicans, Democrats, they want to have sort of a foot in each camp so that they can talk to the right people and lobby as we’ve been talking about. But it seems to me that these corporations are swinging very hard into the Democratic column. And as we’ve been talking about for the last 45 minutes, Republicans, especially Republican voters, but now even Republican politicians as a consequence are having to wake up to that fact that this alliance between the Chamber of Commerce… And I would say it’s soft alliance between the Chamber of Commerce and Republicans because the Chamber of Commerce worked with plenty of Democrats even prior to this era.
But generally speaking, Republicans as we talked about, were kind of the pro-business party. Democrats, I don’t know what to say other than anti-business party, right? Definitely not with Coolidge saying the business of America is business, right? So how is it going to change the Democratic party? Because they did have this strong socialist wing with Bernie Sanders. It seems to me that peaked in 2016. Some of the younger adherents to it are really pivoting to focus on cultural issues, right? Even Bernie himself doesn’t often talk about the working class as often as he used to now. He always has to throw in the LGBTQIA, BIPOC, all the sort of cultural terms. AOC started out obviously as a democratic socialist, right? But 90% of what she talks about and focuses on now it seems to me are cultural issues and sort of woke issues for lack of a better term.
What is going to happen to the Democratic Party? What’s going to happen to their economic platform as the full kind of lobbying light of the Chamber of Commerce and big business turns at least in part out of necessity to their party rather than the Republican Party?
Yeah, it’s an important question. I think the sort of Bernie Sanders AOC wing, as obsessed as they are with actually dividing the working class into the good working class and the bad working class, the good working class being gender queer, indigenous women of color, and the bad working class being the Trump-base, right? As obsessed as they are with that, their actual economic agenda is still very anti-business. I don’t think big business interests, especially not sort of medium-sized business because big business interests often benefit from regulatory capture, I don’t think they’re going to find friends in that part of the coalition.
It is funny though, because you’ve seen this sort of increasing friendliness between a Democratic Party that was traditionally the enemy of kind of consolidated corporate power and big corporations kind of fusing together in a lot of ways, which makes sense given the kind of convergence of their cultural ideas and their worldview and the fact they often come from a similar kind of social strata in class.
But there are still these major discrepancies which kind of leave groups like the Chamber of Commerce hanging. I wrote a long piece about the Chamber of Commerce’s pivot left in I think 2020 or 2021. What I was noting, there’s a lot of sort of fanfare about this at this time because for the first time in the 2018 midterms, the Chamber of Commerce started donating to a bunch of Democrats. It started endorsing Democrats over Republicans. Not the majority by any means. I can’t remember the number, but it was substantial, substantial number. You’ve seen the Chamber of Commerce sort of increasingly trying to make inroads to the Democratic Party because they sense that A, their cultural worldview is closer to the Democratic Party, and B, that they increasingly have opponents in the Republican Party too, whether it’s immigration, whether it’s kind of populist economics trade. You name it. Trump’s effect on the Republican Party has been to pivot away from the Chamber of Commerce and its attended interests.
The same thing was true if you look at all the big Wall Street donors, I think it was like 10-1 Biden to Trump in 2020. But the ironic thing is six months after Biden got into power, you look at the Chamber of Commerce’s press releases, they’re just mortified, right? Like the PRO Act, union policies, regulation, government spending. Everything that the Chamber of Commerce actually cares about when it isn’t virtue signaling about cultural issues, it’s actually the actual material business interests of the business community it represents, Biden’s been bad for. And at the same time, because they pivoted, they’ve made a lot more enemies in the Republican Party. I think even Kevin McCarthy now is saying derisive things about the Chamber of Commerce. So groups like that have no one to blame but themselves, right? They made this gamble where they tried to pivot to the Democratic Party and they realized that substantively the Democratic Party’s economic agenda is still not good for business.
I’m not a business republican. I spend a lot of time criticizing business Republicans, but it’s true that the Republican Party’s economic agenda is just better generally for business, maybe with the exception of the biggest businesses than the Democratic Party economic agenda. Democratic Party, when they get into power, they’re going to be pro-union, they’re going to be pro-public sector union, they’re going to do tax and spend, they’re going to expand the regulatory state, and they’re going to try to technocratically administer the economy because they think they know how to do it better than a lot of business leaders. And business leaders understandably find that objectionable.
I don’t see that changing anytime soon. I think it’s like a large part of what the Democratic Party is. So they will get closer with corporations I think on stuff like cultural issues. And also on immigration is obviously an important part. But I don’t necessarily know… Like the Wall Street donations didn’t change Biden’s loyalty to unions or his kind of regulatory agenda. And the Chamber of Commerce shift. All of the Democrats that they endorsed, hilariously within six months of getting into Congress, voted for the PRO Act, which was number one on the Chamber of Commerce’s kill list.
So the Democrats are still Democrats basically, right? The business interests that have tried to align themselves with the Democratic Party have found that the Democratic Party is still going to do what the Democratic Party always does when it gets into power, and it has the added negative consequence of angering a lot of Republicans. So I don’t know exactly what it’s going to do to change the Democratic Party agenda except just further radicalize its cultural program. But I do know that it increasingly looks like the business interests trying to play both sides has been awful for a lot of the business interests.
I honestly wish Woke, Inc a happy dance ticket with Elizabeth Warren.
Long may they waltz.
That’s kind of my perspective, but Nate Hochman, thank you so much for coming on and explaining this reporting. I really do think, like I said, at the top of the hour, this is not a story about South Dakota. This is a story about all of the forces both within and without both Republican Party and the Democratic Party about the sort of a decline of the political and of democratic power, small D, democratic power. And actually one of the few hopeful, I think, threads in our politics, the potentiality for using political power to push back against some of these things and actually implement democratic interests to voters. So thanks for your reporting. I think you were overly modest. I think it absolutely was the difference maker here. Exposing these things made a difference in South Dakota. I’m hoping that continuing going forward, your reporting can make a difference, exposing more of this kind of dynamic and letting Republican voters register their dissent with it. So thanks for coming on again, Nate.
Yeah, thanks Inez. That was a lot of fun.
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