It was hard-core anti-smoking groups hoping to drive cigarette companies out of business that started the push for federal regulation of tobacco. Now Philip Morris ended up writing the bill in a way that may drive smaller companies out of business, but preserves and likely the tobacco giant’s dominance.
It was Upton Sinclair’s The Jungle that started a rallying cry for federal regulation of meat, but it was the meatpackers who wrote the legislation, again crushing competitors, bilking taxpayers, and helping the Bigs get Bigger through regulatory barriers to entry.
It was greenies who started the push for regulation to curb greenhouse gases (GHGs), but it’s Duke Energy, GE, and Goldman Sachs who could push the cap-and-trade football across the goal line, and secure a bill that hands out GHG allowances to the biggest emitters and profits some savvy companies with good lobbyists.
Yesterday, Simon Johnson at The New Republic worried about banking regulation that “The reform process appears to be have been captured at an early stage.”
Now, some liberals are looking on in horror as another major crusade of theirs is picked up the very industry they hate, mangled beyond recognition, and transformed into corporate welfare.
Ezra Klein got a look at Max Baucus’s draft health reform bill, and many bloggers on the Left are outraged. One liberal activist promoting a public option (government competing in the insurance industry) told me this morning Baucus’s plan is basically corporate welfare for the insurance industry.
While Klein is optimistic things will get better than Baucus’s version, I think the insurers will basically win in the end–get an individual mandate, subsidies for insurance, and no robust public option.
Why?
Because bold legislation usually passes only when someone powerful stands to get rich off it. Liberal groups are fighting hard for a public option, but in they end, I think they’ll be disappointed, and find we’re worse off than before. The big companies will have huge subsidies and regulatory protection, and the costs to taxpayers will be huge.
When you give government more power, you give the big lobbyists more influence. Reform almost inevitably leads to “capture.” The big guys almost always win when government gets bigger.
