This is how cronyism works: A company wants a special privilege from the government in exchange for political support in future elections. If the company is wealthy enough or is backed by powerful-enough interest groups, the company will get its way and politicians will get another private-sector ally. The few cronies “win” at the expense of everyone else.
Here is one good illustration of this dynamic in action: Joe Nocera (though I wouldn’t consider him especially reliable) says that the Chamber of Commerce will support Democratic senator Mary Landrieu of Louisiana over her Republican challenger. For that, Landrieu can thank her stellar record supporting corporate welfare, including her recent endorsement of the Ex-Im Bank.
In any case, she already has the supprot of many Chamber constituents. The Wall Street Journal reports:
America’s biggest businesses have made it a priority to help Republicans win control of the Senate this year. But in a crucial race in Louisiana, they are doing all they can to help the Democratic incumbent.
The political arms of large corporations have given nearly five times as much money to Sen. Mary Landrieu as to her Republican opponent, Rep. Bill Cassidy, according to fundraising data compiled by The Wall Street Journal. Industry groups have run television advertisements supporting her re-election. And several big Washington trade associations that normally back Republicans, led by energy groups, are throwing their support behind the incumbent. …
“It does create a sort of a dilemma,” said Cal Dooley, the president of the American Chemistry Council, which represents chemical manufacturers and typically backs Republicans. The business association has bought television ads telling Louisiana voters Ms. Landrieu is “a proven leader who brings both sides together to get results.”
Mr. Dooley said his organization endorses Ms. Landrieu because “she has been a terrific supporter of our industry.”
No other Democratic senator has been as reliable a supporter of legislation backed by business interests as Ms. Landrieu. According to a vote scorecard from the U.S. Chamber of Commerce, she votes more often for pro-business legislation than Republican Sen. Ted Cruz of Texas.
There is a crucial distinction between being “pro-business” and being “pro-market”: Being pro-business often means being anti-market, as the Chamber of Commerce and Senator Landrieu, no friend of the market, readily demonstrate.
The only way to be pro-business and pro-market at the same time is to maintain an equal playing field for everyone. This means no special privileges and no “industrial policy.” It means that if you’re going to extend tax breaks, you have to extend them to every company, not just the ones that you want to donate to your next campaign. It means reforming our anti-growth regulatory regime to be lighter and more stable for businesses of all size and industry. It means finally eliminating the many subsidies that flow every year to a few American companies (and in the case of the Ex-Im Bank, foreign companies as well).
But that would take a lot of courage, because it means telling the Chamber of Commerce and other special-interest groups that they won’t be getting their special goodies anymore. Can our politicians muster that courage?