Dems Are the New Republicans

Don't take this the wrong way. But everything you know about the link between business and politics is incorrect. For nearly the entire 20th century, a simple formula held: business people like Republicans and don't like Democrats. Republican politicians and voters heartily embrace free trade and lower taxes, while Democratic politicians and their constituencies cotton to protectionism and higher taxes. Over the decades, racial, ethnic and geographic realignments altered the shape of the national parties beyond recognition.

But when it came to the wealthy, there was less movement than in the facial muscles of an over-Botoxed newscaster.

Until now. Democrats, who have never out-fund-raised Republicans in the modern political era, are kicking the tar out of their rivals this campaign cycle. Through the first half of this year, Democratic entities—congressional, presidential and party operations—raised $388.8 million, compared with $287.3 million for their Republican counterparts, according to The Wall Street Journal. In the third quarter, the top three Democratic candidates—Hillary Clinton, Barack Obama and John Edwards—raised 50 percent more money than the top four Republicans.

The Democrats' funds aren't just coming from enraged readers of DailyKos.com who chip in $20.08 via the Internet. They're flowing in from people who can afford to throw $4,000 in post-tax income into campaign coffers. You know the Reagan Democrats, NASCAR dads and soccer moms. Now we have the Fed-Up CEOs and the Angry Yuppies.

Back in 2000, George W. Bush called his base "the haves, and the have-mores." But the have-mores are clearly more receptive to Democrats than they were seven years ago. "It's a much easier pitch drumming up support this cycle from business people, there's no question," says Steve Rattner, founder of the private-equity firm Quadrangle Group, who is a longtime Clinton backer. His take: Fed-Up CEOs are reacting to the bungled war in Iraq, poor fiscal and disaster management, and to conscious outreach efforts by Hillary Clinton and Barack Obama.

As happens every four years during the primary season, Republican business leaders are rallying around the establishment candidate. This time, however, it's a Democrat. Morgan Stanley chief executive officer John Mack, who raised more than $200,000 for W's 2004 campaign, came out for Hillary this spring. James Robinson III, the Atlanta-born banker, former CEO of American Express and co-founder of RRE Ventures, tells NEWSWEEK: "I've been a Republican all my life. I believe in fiscal conservatism and being a social moderate." But this Fed-Up CEO now makes the case for Hillary as effectively as James Carville. "It seems to me she's the person who has got the broadest experience. She understands the importance of business development, innovation and entrepreneurship," he says.