President Obama rolled out the same old corporatist industrial policy in his State of the Union address, while again pretending to wage war on the "special interests." In response, Republican Sens. Marco Rubio and Rand Paul both made real, but inadequate, gestures toward the appropriate antidote: free-market populism and an end to cronyism.
Obama spoke of "getting rid of tax loopholes and deductions for the well-off and well-connected," and chastised those who would "protect special interest tax breaks."
Obama is correct that these are problems, but if he is serious about fixing them, he has to change his ways. From day one, Obama has peddled "special-interest tax breaks" and "loopholes for the well-off and well-connected." His 2009 stimulus handed out tens of billions of dollars in green-energy tax breaks, with the lion's share going to large corporations.
In December 2012 the White House stuck $76 billion a year of special tax credits into the "fiscal cliff" legislation. The prime beneficiaries of the wind tax credits in that package -- General Electric and Siemens -- are decidedly "well-off and well-connected." GE spends more on lobbying than any other corporation, and the company's CEO, Jeff Immelt, is Obama's job czar. The lobbying shop at Siemens -- he gave the company a shout-out in his speech -- is run by a former top aide in Obama's Environmental Protection Agency.
Sure enough, Obama spent much of his address calling for more federal support for wind and solar energy. "As long as countries like China keep going all-in on clean energy, so must we," Obama said, never explaining why.
Obama's other policy proposals were well-worn corporatist standbys. He called on Congress to pass the rest of his 2011 American Jobs Act. The biggest piece would be the National Infrastructure Bank. This "bank" is modeled after existing corporate-welfare boondoggles, the Export-Import Bank and Fannie Mae.
Obama also pushed for a "bipartisan, market-based solution to climate change," referring back to similar efforts over the last decade. These all transfer wealth from electricity consumers to clever corporations like GE, Duke Energy and DuPont that had positioned themselves to profit from cap-and-trade climate schemes.
This is vintage Obama: Public-private partnerships, we gotta beat China, government has to "invest" in our future.
This year, though, Republicans showed they have begun to challenge these bromides. In the official GOP response, Rubio said, "More government isn't going to help you get ahead. It's going to hold you back ,,, , Because more government breeds complicated rules and laws that a small business can't afford to follow."
This is a true and important critique of Obamanomics. Obama's regulations don't rein in big business -- they protect big business from competition. That crushes entrepreneurship. As Obama himself said Tuesday, corporate earnings are at record highs. Meanwhile, new business starts are collapsing.
But Rubio didn't make a full-throated case for free-market populism. Like Obama, he relied on his party's well-thumbed playbook: He pinned the housing bubble on government, and took another shot at the failed green-energy subsidy-suckler, Solyndra. Then he called vaguely for shrinking government.
Rubio could have, instead, offered some real free-market populist ideas. To cut the deficit, for instance, he could have proposed ending specific corporate-welfare programs. He could have made it clear he wants to cut subsidies to both Big Oil and Big Green. And why not offer something tangible to the average family, like cutting the payroll tax?
Rand Paul, giving the Tea Party response, hit the right notes a bit stronger. Paul tapped into the near-universal understanding that politics is a rigged game when he assailed "backroom deals in which everyone up here wins, but every taxpayer loses."
Paul said, "We must continue to object when Congress sticks special interest riders on bills in the dead of night."
Again, Paul's economic proposals were typical GOP fare: a balanced-budget, for instance. He never gave bolder proposals -- say, breaking up big banks to protect taxpayers from bailouts.
Both Paul and Rubio paid lip-service to free-market populism, but neither man did much more. At least they began to move away from the Mitt Romney critique of the welfare state. Romney seemed to dislike government aid because it gave money to the undeserving. Paul and Rubio criticized big government because it prevents the poor from climbing the economic ladder.
These days, both parties say they want to help the common man and battle the special interests. If they followed up with policies, Republicans could show they actually mean it.
Timothy P.Carney, The Examiner's senior political columnist, can be contacted at firstname.lastname@example.org. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.