(Editor's Note: As the end of 2013 approaches, the Washington Examiner is shining a spotlight on its best columns of the year. Today, it's senior political columnist Timothy P. Carney on the inherent advantages for big business and the wealthy, and what Republicans can do to fix them. This column first ran on June 5 and can be found in its original form here.)
The game is rigged against the regular guy in America today. And it's rigged in favor of big business, the politically connected, and the wealthy.
If Republicans and conservatives want to reform themselves, they need to begin with this fact. Admit it. Understand it. Declare it. Decry it. And start fixing it.
Here's the evidence the game is rigged:
Corporate profits soared to a record $1.73 trillion annualized rate in the first quarter of 2013, more than triple what they were in 2001, according to data from the Bureau of Economic Analysis.
Banks made a record $40.1 billion in profits in the first quarter, 16 percent higher than a year before, according to FDIC data. The big banks have grown much faster than the economy. Last year, Bloomberg News found that the five largest banks held assets equal to 56 percent of the economy, up from 43 percent in 2006, before the fiscal crisis the big banks caused -- and before the taxpayers bailed them out.
And how's the regular guy doing?
New business formation continues to fall to record lows. In 1980, nearly half of all firms were less than five years old. The latest data from the Kaufmann Foundation puts that number at about one-third.
And the working man isn't faring better. Unemployment, while improving, is still high. Maybe worse is the collapse of median household income -- down more than 7 percent since 2008, and it is not noticeably climbing.
Meanwhile, federal spending hit a record 26.9 percent of GDP in 2010. While it dropped a bit to 24.8 percent in 2012, that is still higher than any year between World War II and 2009 and 18 percent higher than the average year from the previous five decades.
So it's no surprise that seven of the 10 richest counties in the United States are in the Washington, D.C., area. Revolving-door lobbyists and government contractors are living the high life in McLean, Georgetown, and Great Falls.
The game is rigged, and conservatives can point out that the chief game rigger is government. The tax code is convoluted, regulations are terrifying, big businesses that fail get bailed out while small entrepreneurs get crushed by bureaucracy.
If you're already doing well, or if you're well connected and can hire a former congressman, senator, or Cabinet secretary -- you're OK. Otherwise, you're not.
Conservatives and Republicans would do well to admit this, and declare it a serious problem. Attacking Obama for "hating success" or being "anti-business" is not only factually flimsy, it is a political loser. Such attacks don't appeal to the folks who have been suffering in our current economy.
Driven by the insight that the game is rigged in favor of the wealthy and well-connected, Republicans can push a free-market populist response.
Free-market populism is, for one thing, a moral stance, manifested through rhetoric and action.
Republicans have become more comfortable lately denouncing "crony capitalism" and even "corporate welfare." After blaming politicians who use public power to enrich private interests, Republicans also ought to shame some of the "capitalists" and their lobbyists who demand handouts and protective regulations.
Republicans ought to abolish corporate welfare, including subsidies for exports and green-energy projects. Break up the big banks. Get rid of corporate tax credits.
Politically, these policies checkmate Democrats because corporatism is at the heart of President Obama's economic agenda. Subsidies for Boeing, Chrysler and General Electric are the building blocks of Obama's "New Economic Patriotism." Obamacare was built in collusion with drugmakers and the hospital lobby.
If Republicans destroy the hoary myth of Washington versus Wall Street -- and make it clear it's really K Street, Wall Street and Pennsylvania Avenue versus Main Street -- Democrats lose much of their rhetorical advantage.
Ending federally granted privilege is politically helpful because clear moral stances are winners. But voters often want something tangible and immediate from politicians. In the short term, dismantling corporatism helps mostly the minority of voters that are or want to be entrepreneurs.
Many conservative reformers advocate a package of policies to aid middle-class families. This is dangerous territory because the Left can always out-Santa Claus the Right. Any conservative "gifts" to the middle class should be consistent with the message that Big Government isn't their friend.
So, here's one: abolish the payroll tax -- totally and permanently. It's a tax on employment. It's a tax on someone's first dollar. And it's specious to say that it funds Social Security and Medicare -- both entitlements are funded on the margin by general revenues. So give up the charade and abolish a regressive federal tax.
This reflects the heart of conservative reform: Level the playing field by getting government out of the game.