Journalists across the country, working for an assortment of publications, varying in levels of prestige and circulation base, have been criticized for their lack of economic understanding of fundamental economic principles. It seems as though, the basic foundation of free market economy is beyond their grasp, infected with the typical main stream media bias.
Timothy P. Carney seeks to rid the general misconception of government deregulation of business and tax cuts believed to be imposed as a form of government corruption, as it is divulged by news outlets to be, in his new book, "The Big Ripoff: How Big Business and Big Government Steal Your Money."
The CATO Institute hosted a book forum yesterday featuring the author himself, with commentary offered by Jim Pinkerton, columnist for Newsday and contributor to the Fox News Channel.
“Today’s largest corporations have mastered the art of working with government officials at every level to stifle market competition,” said Carney. “They reap billions through a complex web of higher taxes, stricter regulations, and shameless government handouts. ‘The Big Ripoff’ pulls back the curtain to show who is strangling America’s tradition of free enterprise and how and why they are doing it.”
Carney maintains that when the players in big business and big government unite, the end result is one of consumer misfortune, where prices are artificially inflated, fewer substitutes are available for sale and there are huge barriers to market entry for small businesses entrepreneurs.
“From General Motors to General Electric, Boeing to Philip Morris,” corporate tyrants have got the mass media, and therefore the general public, fooled into thinking their support for stricter government regulations on automobile emissions and support for FDA mandates, is purely philanthropic, amassing to a greater societal good, said Carney.
What mainstream reporters are failing to see, or rather choosing not to see, is the major profit these big businesses are earning because these government regulations are in place, he said.
Carney said his favorite section of the book, was the last one titled “Green is the color of Money,” in which he describes the ways big business profit from government regulations. He uses General Electric (GE) as an example of such a company.
GE invested millions of dollars into research for developing more environmentally friendly methods of production. Then the company went to Washington to lobby for tougher environmental regulations for automobile emissions, which led to a large amount of favorable press coverage. However, at the same, GE and other so-called environmentally friendly companies, profited off the newly imposed government regulations, in a way that would not be possible in a free market, by forcing other companies to comply with these new standards.
Another example Carney used to prove his point was that of tobacco king Phillip Morris.
“Philip Morris has been pounding away for FDA regulations in the tobacco industry for years,” he said.
Carney said that one reason he knew it was important to write this book, was the “quotes that came out after” the ENRON scandal. “The games they played in California would not have been possible without the regulations ENRON fought tooth and nail for. ENRON would be a small pipeline company whose collapse wouldn’t have been as devastating if the government hadn’t propped them up.”
Carney said that the benefits that businesses yield in a free market economy are spread out among many companies, but the benefits that stem from government regulation are “narrowly concentrated with the people [that have] the best lobbyists: GE, GM, ENRON and Boeing.”
“Citizens and taxpayers are losing power over their government, and consumers and entrepreneurs are losing control over the economy, thanks to a deadly combination of power-hungry politicians and obliging CEOs,” he said.