When Republicans abandon the free market and smaller government, the culprits are often the industry lobbyists within the GOP's inner circles.

Former K Street lobbyist Ed Gillespie, who joined Mitt Romney's campaign last week as adviser, shows how industry can muddle Republicans' economic message. Specifically, Gillespie's and Romney's closeness with the health insurance industry has weakened the GOP's ability to attack President Obama's least popular policy, Obamacare's individual mandate.

In 2007, Gillespie was the headline Republican for the bipartisan Coalition to Advance Healthcare Reform. CAHR advocated "market-based solutions," but it also held as a core principle that "every American should be required to carry health insurance," as stated in an op-ed written by CAHR founder Steve Burd, CEO of Safeway.

CAHR was made up of large employers, plus insurers like Aetna, Blue Cross of California, and Cigna, as well as drugmaker Eli Lilly. Of course Aetna and Blue Cross supported the idea of forcing people to buy health insurance. They were paying for CAHR, and CAHR was paying Gillespie.

Gillespie tells me he never advocated a federal individual mandate. Instead, he advocated "a requirement that able-bodied people should have health insurance," as he put it in a phone conversation Wednesday. Anyone not carrying health insurance would lose half of his personal exemption, under Gillespie's idea. "It was not a mandate," Gillespie told me. "It was a way of addressing the free-rider problem" of uninsured people obtaining health care from hospitals, which are required by law to care for all comers regardless of ability to pay.

Gillespie's "requirement to have health insurance" is not identical to Obamacare's "personal responsibility requirement," but it's close enough that it makes it harder for him, as a Romney proxy, to attack Obama's mandate.

Romney has the same problem. He constantly tries to draw rhetorical lines between his own state-level individual mandate and Obama's federal individual mandate. He claims profound philosophical differences between the two, but hasn't made a convincing case that they're really far apart.

Romney's problem had the same source as Gillespie's: industry. Blue Cross Blue Shield of Massachusetts, in its legal brief supporting Obama's individual mandate before the U.S. Supreme Court, stated that the insurer "played a critical role in" crafting Romneycare. Last spring, Romney defended his 2006 law on the grounds that it was praised by a think tank "funded by business." Since a lot of businesses benefitted from Romneycare and supported it, that hasn't been a winning argument.

Romney's support of economic interventions typically involved helping out some prominent industry. As governor, he gave direct loans to "emerging technology" companies. As a candidate in 2008, he supported the Wall Street bailout and a federal backstop for private casualty insurers.

Romney's moderate sensibilities and technocratic mind-set certainly undergirded these positions, but his closeness to business lobbyists also has been a factor. Romney's inner campaign circle in 2012, filled with ex-lobbyists like Gillespie and current lobbyists like Vin Weber, should make conservatives fear he'll frequently tack toward pro-business positions and away from the free market.

The industry-lobbyist influence on Romney's inner circle is typical of presidential campaigns, and also for both the Republican and Democratic leadership more broadly. The result is corporate-friendly policies that upset both conservatives and liberals.

One D.C. lobbyist who lobbied on Obamacare told me that elected officials working on health care policy "do rely on industry, because it's complicated as hell. They have to. ... But that's also how games can be played."

The "games" are when politicians and their staffs don't merely consult with industry, but actually outsource policymaking to the affected industry. "There are lazy staffers," a bank lobbyist told me, "and there are guys that want to help an industry that they perceive as friendly. And that's when industry gets away with stuff."

Democrats do this, too. (The drug industry wrote substantial portions of Obamacare). But Republicans are more susceptible to this line of thinking. They see liberal Democrats as being "anti-business," and so they define themselves as "pro-business."

Michael Steele, then-chairman of the Republican National Committee, told the Pittsburgh Tribune-Review in 2009 that "doctors, lawyers, health care employees, insurance companies" should draft a health care reform.

Romney isn't hiring ex-lobbyist Ed Gillespie primarily for his ideas on health insurance. Gillespie has been involved in many political races, and he knows all the players. Vin Weber probably isn't bringing his clients' interests into Romney campaign conference calls. But atmosphere and peer groups matter. Surrounding yourself with Gillespies and Webers puts a candidate in a different ecosystem, with different sensibilities than his party's base.

It's a K Street bubble, and it could suffocate Romney.

Timothy P. Carney, The Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.