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Posts Tagged ‘Big business’

I’ve always rejected coercive redistribution, particularly when imposed by the federal government.

But some types of redistribution are worse than others, and when big business and big government get in bed together, ordinary people are the ones who get screwed.

This is why Obama’s supposed “move to the center” is a bunch of nonsense.

Tim Carney is the go-to guy on this issue, and his column this morning in the Washington Examiner exposes the real meaning of Obama’s recent appointments of a “banker” and a “CEO.”

Let’s start with Bill Daley, the supposed banker who will be Obama’s new Chief of Staff. Does this signal a move to the right, as some left-wingers fear? That might be the case if Obama had appointed a real banker like John Allison of BB&T, who wants government to get out of the way and believes banks should sink or swim without bailouts or subsidies. But, as Tim explains, that is not the attitude of Bill Daley, who is more akin to Jim Taggart, the rent-seeking businessman in Atlas Shrugged.

Check out Daley’s resume. In the 1990s, he ran Amalgamated Bank, owned by a union and described by the Chicago Sun-Times as “one of the city’s most politically connected financial institutions.” Bill’s brother, Mayor Richard Daley, kept the city’s money on deposit at Amalgamated. Later, Bill held a seat on Fannie Mae’s board, pocketing six-figure compensation from the government-sponsored enterprise that used a housing bubble and an implicit government guarantee to fill a slush fund for well-connected Democrats — until taxpayers bailed it out in 2008. This is Obama’s kind of businessman: a banker who leverages his political connections for profit.

Or what about Obama’s appointment of Jeff Immelt of General Electric? Does this mean Obama wants to unleash the power of free enterprise? That would be welcome news, but GE has morphed into a corrupt company that specializes in fleecing taxpayers (a very sad development since GE once sponsored Ronald Reagan). Once again, Tim hits the nail on the head with a devastating indictment.

GE, which marches in sync with government, pocketing subsidies, profiting from regulation, and lobbying for more of both. …Obama bragged GE would be selling to a power plant in Samalkot, India. That sale is no triumph of free trade — Obama’s Export-Import Bank is providing at least $400 million in subsidized financing to grease the skids. Subsidies are GE’s lifeblood, and Immelt’s own words make that clear. In his op-ed announcing his appointment, Immelt called for a “coordinated commitment among business, labor and government…” He also advocated “partnership between business and government…” This is Immelt’s style. …wherever Obama has led, GE has followed. Obama has championed cap and trade in greenhouse gasses, and GE has started a business dedicated to creating and trading greenhouse gas credits. As Obama expanded subsidies on embryonic stem cells, GE opened an embryonic stem-cell business. Obama pushed rail subsidies, and GE hired Linda Daschle — wife of Obama confidant Tom Daschle — as a rail lobbyist. GE, with its windmills, its high-tech batteries, its health care equipment, and its smart meters, was the biggest beneficiary of Obama’s stimulus. To get these gears in sync isn’t cheap: The company has spent $65.7 million on lobbying during the Obama administration — more than any other company by far. So much for Obama’s war on lobbyists.

In other words, appointing Daley and Immelt does not mean a change in policy. These are people who want a bigger government because these are people who have learned to line their pockets when government has more power. They may have different motives than traditional leftists, but the result is the same. As I’ve noted before, my former Cato colleague Will Wilkinson said it best when he wrote that, “…the more power the government has to pick winners and losers, the more power rich people will have relative to poor people.”

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Tim Carney of the Washington Examiner has a great piece looking at the utterly indefensible panoply of ethanol subsidies and handouts that screw consumers and taxpayers in order to line the pockets of the politically powerful. Unfortunately, several senior GOP lawmakers have unseemly ties to the lobbyists for the industry. So this is a test, but don’t expect a passing grade.

Ethanol fuel (especially ethanol distilled from corn) is subsidized in dozens of ways by governments at all levels. Two of the longest-running subsidies — a 54-cent-per-gallon tariff on imported ethanol, and 45-cent tax credit for every gallon blended with gasoline — expire on Dec. 31, making them a top priority for industry lobbyists during the lame-duck session.

…In recent years, Americans have learned about the downsides of ethanol subsidies. The 2005 and 2007 energy bills mandated the use of ethanol, igniting a corn boom, which crowded out other crops, contributing to spikes in food prices. Ethanol was even blamed for tortilla riots in Mexico.

Growing and distilling ethanol uses immense amounts water (contributing to river and aquifer depletion) and energy (some scientists argue that more energy goes into making a gallon of ethanol than is contained in that gallon). The added corn demand means more fertilizer production and use, adding to harmful runoff, which is blamed for “dead zones” in the Gulf of Mexico that choke out aquatic life.

There are plenty of policy reasons to kill ethanol subsidies, but historically, a powerful lobby has kept them alive. And while the GOP talks about free markets, Republican lawmakers are cozier with the ethanol lobby than Democrats are. Republicans raised more than Democrats from Poet, the nation’s largest ethanol maker. Former Republican Rep. Jim Nussle of Iowa is now the president of Growth Energy, a leading pro-ethanol lobby.

Presumptive incoming House Ways & Means Chairman Dave Camp has long supported ethanol subsidies, as has Finance Committee ranking member Chuck Grassley. Republican coziness with corn growers and ethanol distillers could outweigh sound policy considerations.

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