It has taken almost four years, but a growing number of liberals are beginning to realize that President Obama, who promised “Change we can believe in” in 2008, has actually delivered “Change big corporations can believe in.” And for many of his supporters, this tiny change between campaign promises and governing reality is just fine.
In last Sunday’s New York Times, for example, Campaign for America’s Future online campaign manager Bill Scher urges fellow liberals who have become “frustrated over the last three years” to realize that “the most liberal reforms in more than 40 years have been brought about because Mr. Obama views corporate power as a force to bargain with, not an enemy to vanquish.”
“The necessity of corporate support for, or at least acquiescence to, liberal policies,” Scher argues, “is not a new development in the history of American liberalism. Indeed it has been one of its hallmarks.”
Scher is right. Many of liberalism’s greatest advances (Obamacare, the New Deal, Medicare, etc.), came only after corporate interests were made partners in the expansion of federal government power.
Liberals like Scher see the embrace of corporatism as just a “strategic concession” necessary to pursue “the greater good.” But are we really all better off? A new paper by Matthew Mitchell of the Mercatus Center suggests not.
In “The Pathology of Privilege: The Economic Consequences of Government Favoritism,” Mitchell details how the Wall Street bailouts deplored by both the Occupy Wall Street and Tea Party movements are really just the tip of the iceberg when it comes to Big Government “privileges” for Big Business.
Examples of monopoly status, favorable regulations, subsidies, bailouts, loan guarantees, targeted tax breaks, protectionism and noncompetitive contracts are all documented in the report.
Most importantly, Mitchell explains how it hurts the rest of us. Such privileges, he notes, “limit the prospects for mutually beneficial exchange — the very essence of economic progress. They raise prices, lower quality, and discourage innovation. They pad the pockets of the wealthy and well-connected at the expense of the poor and unknown.”
He continues: “When governments dispense privileges, smart, hardworking, and creative people are encouraged to spend their time devising new ways to obtain favors instead of new ways to create value for customers. Privileges … even undermine cultural mores, fostering cronyism, blurring the distinction between productive and unproductive entrepreneurship, and eroding people’s trust in both business and government.”
According to Gallup, American confidence in the federal government and big business are both at all-time lows. Our economy is stagnant and the vast majority of Americans believe our nation is on the wrong track.
So what “greater good” has Obama’s partnership with corporate America really served?
