The Corner

The Myth of Anti-Corporate Liberals

Over at Mother Jones, Kevin Drum makes fun of the idea that Elizabeth Warren and tea partiers can band together to fight cronyism. His argument: The tea partiers aren’t anti-corporation — or, well, when they are, it’s over “trivial issue” like the Ex-Im Bank and their motives aren’t pure anyway. All they care about is putting grandma in the street, slashing taxes for the rich, and deregulating big banks. He writes:

Sure, the tea partiers opposed TARP and were hazily in favor of just letting all the banks collapse in 2008, but that was little more than a fleeting morsel of emotional outrage. As Kilgore says, tea partiers may say they oppose corporate power, but when it comes time to vote, they can be counted on to support the folks who oppose any and all regulations that might actually rein in the power of corporations generally and Wall Street in particular.

But every once in a while they’ll get themselves exercised over some trivial issue of “crony capitalism” like reauthorizing the Export-Import bank, and suddenly pundits will rediscover the supposedly populist right. Give it a rest, folks. The tea partiers will no sooner find common cause with Elizabeth Warren than they will with Mother Jones. In reality, they couldn’t care less about ExIm or the swaps pushout or any of the other shiny objects that right-wing fundraisers occasionally find useful for replenishing their coffers. On the economic side of things, what they care about are low taxes and slashing welfare. 

He’s right that, with a few noticeable exceptions, Republicans and tea partiers aren’t committed to fighting cronyism as much as they should. There are plenty of issues where many Republicans are still defending cronyist subsidies: The Ex-Im Bank, for one, or TRIA, OPIC, and plenty of others. Why is this the case? As I’ve said before, many Republicans are either confused about the fundamental differences between being pro-business and being pro-market or simply don’t value the free market more highly than their loyalties to special interests (bankers, farmers, or whatever).

But the other notion underlying Drum’s piece, that Democrats, and Elizabeth Warren in particular, are anti-corporation, is laughable.

Please. They talk the talk, but when it’s time to vote, they rarely walk the walk. In the end, not unlike a number of Republicans, Democrats rarely miss an opportunity to support big businesses. They support the Department of Energy’s 1705 loans, which mostly go to wealthy energy companies, and they never fail to join Republicans in saving other corporate energy subsidies; they support the reauthorization of OPIC, which mostly benefits large corporations; they support farm subsidies, which mostly benefit large agro-businesses at the expenses of small farms; they support Obamacare, which among other things amounts to a huge giveaway to the insurance industry; they support auto and bank bailouts; and for all their complaints about Wall Street, they managed to write a law, Dodd-Frank, that in some ways protects the big financial institutions that they claim to despise. (I’m forgetting plenty of examples — see here.)

Drum can make fun all he wants of the triviality the Ex-Im fight (he isn’t the first liberal to try), but it’s a perfect example of Democrats’ devotion to special interests. First, if it is such a trivial issue, it should be easy to get rid of. And yet, this year, almost all Democrats in the House are supporting this big corporate boondoggle – even though many of them used to be against it

Elizabeth Warren’s support of the Ex-Im Bank is everything but trivial. The mega-banks that Warren always complains about are some of the biggest beneficiaries of Ex-Im: They get to extend billions of dollars in loans and collect large fees and interest rates without shouldering most of the risk involved. This is exactly the kind of favoritism for Wall Street she says she opposes.

The bottom line is that the institutions of government make it remarkably easy, and tempting, for lawmakers – Democrats and Republicans – to do the bidding of special interests at the expense of everyone else. Only a few lawmakers are courageous enough to fight the temptation, and there aren’t many of them in either party.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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