If the punk economy isn't enough, business folks start to get a tad anxious over possible regulatory backlash from the mortgage mess and an overleveraged marketplace. Campaign contributions flow into both Republican and Democratic party coffers at a record pace. These inflows accompany a message for holding the line on laissez-faire government oversight and discouraging new tax policy which might constrain the take from private equity horse trading. And so far the Chamber of Commerce "lobbying" has worked to keep government's hands largely off the markets. Now that subprime lenders have imploded, the Federal Reserve takes somewhat half-hearted steps to rein in future lending. The President and Republican congressional delegations, meanwhile, mount an effective firewall to protect mostly anything goes business practices. Even New York Senator Chuck Schumer bends over to shield private equity firms from higher tax bills -- in return he takes a pittance of their oversized profits to help finance Democratic Senate candidates in competitive races next year.

But the pressure increases for greater regulation as home values plummet and consumers feel increasingly pinched. At some point voters may get their fill of investment bankers who short investments they sell to clients and lending schemes that create windfalls for brokers and bankers but leave many borrowers for dead and threaten to tank the entire economy. Expect populist politicians to get on the campaign bandwagon for more oversight as we approach the November elections, especially if the economy continues to sag. They will try to make hay out of how a small minority of business elites game the system to the detriment of everyone else. Tax-the-rich rhetoric may finally gain traction. If the electorate feels economically vulnerable next year, big business interests could take it on the chin at the polls no matter how much they funnel into campaigns. After the recent debt binge and fee-for-all, 2008 could be a pivotal year for reordering what has been an extremely pro-business landscape.

© Miller Ryan LLC 2007