One of the few lines in President Obama’s State of the Union address that actually received bipartisan applause was his vow of “no bailouts, no handouts, and no cop outs.” Of course the president then went on to claim credit for his bailout of the auto industry and promise additional handouts to the “green energy” industry.
Both liberals and conservatives often succumb to a narrative that pits big government against big business. No doubt many of big government’s tax and regulatory policies do make it more difficult for businesses to expand and hire people. But just as often, big business and big government are all too happy to work hand in hand to thwart the free market.Confusing support for free markets with support for the corporate agenda is a bipartisan failing. In a free market, for example, corporations compete against one another on their merits. Government doesn’t pick winners and losers or prefer one type of industry over another.
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Yet, Rick Santorum shares President Obama’s desire for special tax breaks for “manufacturing.” Both Newt Gingrich and Mitt Romney join President Obama in backing government subsidies for ethanol and other alternative energy.
And obviously, in a free market, when businesses fail because they made stupid investment decisions, they go bankrupt. But both Romney and Gingrich joined President Obama (and President Bush) in supporting TARP and the bailout of some of America’s biggest banks and investment firms. This was not a one-time situation brought about by a unique crisis: Dodd-Frank enshrines the principle of “too big to fail,” all but guaranteeing future bailouts.
The Cato Institute estimates that corporate welfare now tops $125 billion per year. Among the biggest beneficiaries are companies such as Boeing, Xerox, IBM, Motorola, Dow Chemical, and General Electric. At a time when we are facing a $15.3 trillion national debt and borrowing 34 cents out of every dollar we spend, should we really be spending money to subsidize McDonald’s advertisements for Chicken McNuggets overseas?
And, when they don’t get direct subsidies, businesses are forcing taxpayers to subsidize consumer purchases of their products.
For example, Big Pharma poured more than $150 million into advertising in favor of Obamacare. Why? Among other things, every insurance plan in America will now be required to cover pharmaceutical products. And, closing the Medicare Part D “donut hole” will encourage seniors to buy brand-name drugs rather than cheaper generics. Speaking of the Medicare prescription-drug program, guess who was the biggest lobby in favor of the entitlement expansion? The drug companies even funneled millions of dollars to Newt Gingrich’s Center for Health Transformation. No surprise, then, that Gingrich supported the Medicare expansion, calling it a cost-saving idea, even though it added $17 trillion to the Medicare’s unfunded obligations. Among the biggest supporters of Obamacare’s individual insurance mandate are the big insurance companies. After all, isn’t it great for the government to force people to buy your product? It certainly beats having to provide cheaper and higher-quality insurance.
Big businesses also use regulations to prevent competition or impose costs on their competitors. For example, General Electric is among the biggest supporters of President Obama’s “cap and trade” proposals. GE is not doing this out of some sense of altruistic global citizenship, but because it operates a unit that would trade cap-and-trade credits. The company stands to reap billions in profits were Obama’s plan to pass.
Similarly, Walmart stunned many by coming out in support of an employer health mandate. But it’s really not that surprising. Walmart actually spends more on employee health care than its competitor Target. Mandating that all companies provide health insurance will drive up Target’s costs, benefiting Walmart.
President Obama is planning to mount a reelection campaign that attempts to paint Republicans as the captives of special interests, ignoring his own addiction to corporate bailouts, handouts, and cop outs.
Polls show that despite the president’s drumbeat about inequality, Americans are not particularly concerned about income disparities. But there does seem to be a growing concern that the system seems to be rigged to benefit the powerful and well connected. Simply put, Americans don’t care about unequal outcomes as long as the system is fair.
If Republicans want to counter this, they will need to take a firm stand in favor of free markets, rather than special-interest corporatism. They should stop talking about how “pro-business” they are, and talk about the virtues of free-market capitalism — emphasis on the “free market.”
Will they do so?
Last week, both Romney and Gingrich came out in favor of sugar subsidies. That isn’t encouraging.
"...there does seem to be a growing concern that the system seems to be rigged to benefit the powerful and well connected. Simply put, Americans don’t care about unequal outcomes as long as the system is fair."
Exactly. To save capitalism, the Republicans are going to have to step up and promote free-market capitalism. Remember that Medicare Part D for $17 trillion was brought to us by a govt that was fully controlled by Republicans.
It's sad when I have to vote for a Democrat because at least I think he is stealing my money for the poor, as opposed to a Republican who is stealing my money for the rich.
Where are the real fiscal conservatives who aren't wack jobs?
Seriously, you believe that the Democrats are stealing your money for the poor?? The same Democrats that funnel millions (or billions) in both handouts and tax breaks to big-money backers like GE, the wealthy bundlers behind Solyndra and other "green" companies, big union bosses, GM and Chrysler (at the expense of their shareholders you may recall, many of which are regular people's pension funds) and other such big money and big business causes? Those Democrats?
I'll admit, they do TALK more about helping the poor, but when it comes to actions it's the money that talks, and they all know from whence the money flows.
You delude yourself if you think there is more than a whiff of difference between the two major parties and how they will each do anything to keep the spigot open. Clearly you missed the part of the article that talked about the backing of Obamacare by big pharma and big insurance. Do you suppose that was entirely - or even remotely - altruistic? I suspect not.
You're right about the Republicans however; they have been a big part of the problem rather than any part of the solution. Third party? Term limits? Something has to change!
"But there does seem to be a growing concern that the system seems to be rigged to benefit the powerful and well connected. Simply put, Americans don’t care about unequal outcomes as long as the system is fair.
If Republicans want to counter this, they will need to take a firm stand in favor of free markets, rather than special-interest corporatism."
Exactly.
The whole discussion on income inequality always seems to get framed in terms of someone making less money wanting the money of the rich. As pointed out in this piece, most Americans understand that all incomes will not be equal. They do however, I think, understand that the current level of inequality and the ongoing trend in terms of inequality increasing is a reflection of the rich being able to be the connected and continuing to change the rigging of the system in their favor at both the personal and corporate level.
And the differentiation between free market and pro-business is excellent. Being "pro-business" in fact may be a flag that indicates a willingness to engage in rigging the system.
Long term the only solution is likely to be of Constitutional Proportions. I'm not sure how the amendments would be worded, but they would accomplish the following.
1. Limit the ability of government to make transfer payments (that is, give away money without buying something).
2. Make all meetings between lawmakers, regulators and industry a matter of public record (with maybe a National Security Exception).
3. Campaign Finance Restrictions (I know this is going to be unpopular on this site but I don't see how campaign contributions of a level that allow donors to directly influence policy are any different from bribery).
1. My answer to get on, was "chaise lounge". It's "longue". (Buckley would be appalled.)
2. Of course, Tanner is dead on target. But this is the real, mostly unrecognized, different between real conservatives and the pseudos. Simply put, we are willing to let big businesses take their lumps when they mess up, and DO NOT giving them any special breaks. That is conservatism. But that is not Republicanism, and never has been. All the talk of "RINOs" is off base here. The "good for GM" crowd IS the real Republican tradition. We are the newcomers & interlopers.
3. One of the arguments for free markets, though, is just how well capitalism works in its impure form. Markets still function under very heavy regulation; at least, "impure" capitalism is vastly superior than the "impure" socialism the Left is constantly complaining about ("It's never really been tried.")
Face it, if your idea can only work if perfectly implemented, it won't work. (Not, mind you, that I buy the "socialism works in theory" nonsense. Rather, I do believe that, even if that were true, it still would lose the argument with capitalism. That it is also a really, really, bad theory just makes it that much the worse.)
