Cronyism versus the free market
As the economy has continued to falter under his watch, President Obama’s response has been to try to hang the albatross of the nation’s woes around the neck of, as he put it recently, “a certain crowd in Washington who, for the last few decades, have said, ‘Let’s respond to this economic challenge with the same old tune.’ ‘The market will take care of everything.’”
So “free market types” have been running the country for some time now? That’s news to me! If free market policies reign in Washington today, I’d hate to see what real socialism looks like.
Truth is, for the past century, with a few notable exceptions, free-marketers have been playing defense. The Federal Reserve has taken over the money supply and finance. We have had government schools, Social Security and Medicare, the War on Poverty, the creation of over hundreds of federal agencies and bureaus. We have had the Progressive Era, the New Deal, and the Great Society. It was the regulatory state that imploded in 2008, not “capitalism.” We have most decidedly not tried it during the past decade, Mr. President!
Over the last few decades, those in power, whether Republican or Democrat, have responded to every crisis with essentially the same old tune: “The government will take care of everything.” Pile on more regulations and raise taxes and the economy will grow strong. The Fed will ensure jobs trickle down to everybody. That we have tried. And it decidedly has not worked.
Unleashing the creative spirits of America’s entrepreneurs-to-be requires more than good policy; it requires good politics. That means reaching out to the disaffected—those who have continued to lose under the Obama administration’s attempts to play Robin Hood.
Obama points to the soaring stock market to defuse the charges he’s a socialist. Yet during his administration, corporations have earned record profits even as median family earnings fell. Yes, politically connected big businesses form a privileged class that never seems to lack for access to the corridors of power. But the problem isn’t that they’re big; the problem is that many owe their privileged position to government overreach that picks winners and losers.
Which brings me to the crucial question: What is to be done?
The federal regulatory Leviathan won’t be dismantled in a day. But, just as a journey of a thousand miles begins with a single step, we have to start somewhere. A good starting point is to define the battle as one between cronyism and the free market. If Republicans ever wish to put a governing coalition together again, they need to connect with the budding entrepreneurs who often find their efforts thwarted by pettifogging rules and box-checking exercises.
It’s time to end crony capitalist subsidies to all businesses, to kick loser industries off the public dole. In this, Washington’s current corporatist consensus offers a target-rich environment.
First on the chopping block should be the indefensible sugar program, which drives up the cost of sugar for Americans, puts taxpayer money at risk, and kills U.S. jobs, all to benefit a handful of politically connected sugar producers.
Next up, subsidies for uneconomic “renewable” energy industries like wind energy and ethanol; restrictions on fossil fuel exports, which function as a subsidy for manufacturers, who pay artificially low energy prices; and protection of “too big to fail” banks through the implicit promise of a bailout when things go south.
We are all better off thanks to the efforts of countless individual inventors, tinkerers, investors, entrepreneurs, and just plain folks who are finding better ways to do things every day. Keeping that lesson in mind, trusting people to order their own lives, should be our top priority. Communicating that message in a way that connects with people will be key to ensure that future is a bright one.
So death to the collusion of regulators and politically connected businesses shielding the big guys from new competitors! Long live the food trucks, the raw-milk dairy farmers, the hair braiders, the Mom-and-Pop tax preparers, and the next big thing now taking shape in someone’s garage!
This column is adapted from remarks delivered at the Conservative Political Action Conference on March 7, 2014.