FRONT PAGE CONTRIBUTOR
Democrats love them some crony capitalism
There is great story about the British cavalry officer who was so dumb that even the horses started to notice. The same effect is happening in the Democrat party. Democrat politicians are so deeply involved in corporate welfare and crony capitalism that even the Democrat pundits are beginning to notice.
Right now the US Export-Import Bank is teetering on the razor’s edge of extinction. The bank, which supplies low interest loans to US businesses seeking to sell products overseas and sometimes to Mexican narco-cartels just to liven up the paperwork, is up for reauthorization. Absent such reauthorization the bank’s charter expires in September. The House Financial Service Committee Chairman, Jeb Hensarling, has said that he intends to kill the bank and House Majority Leader Kevin McCarthy agrees. (For more background on the Ex-Im Bank and the current attempt to throttle it, visit the RedState Ex-Im Bank archives.)
One would think that the Democrats would be gleeful as this bastion of the 1% is burned down. But no, now that the Ex-Im Bank is actually in danger Democrats have stopped demagoguing it and have rushed to its defense.
This tale starts 15 years ago when my old boss, U.S. Rep. Bernie Sanders, I-VT, was trying to construct a left-right coalition to reform the bank. While a few libertarians were willing to voice free-market criticism of the bank, the impetus for reform was primarily among Democrats and the left. Indeed, Sanders’ failed 2002 amendment proposing to restrict the bank’s subsidies garnered only 22 Republican votes but had 111 Democratic backers – mostly progressive legislators who, in the words of Sanders, saw the Ex-Im Bank program as “one of the most egregious forms of corporate welfare.”
As Salon’s David Dayen reports, liberals in subsequent years “highlighted how Enron, the failed energy giant, benefited from $675 million in Ex-Im loans”; how “Ex-Im gave an $18 million loan to a Chinese steel mill, which was later on accused of dumping steel into U.S. markets and hurting U.S. workers” and how, “Ex-Im loan guarantees helped build one of the largest coal plants in the world.” By 2008, the progressive-themed criticism of the bank had become so central to Democrats’ agenda that Barack Obama used a presidential campaign speech in 2008 to lambast the bank as “little more than a fund for corporate welfare.”
Fast forward to the last few years. In 2012, Democrats rammed a bill reauthorizing the bank through the Senate, and Obama held a public ceremony to sign the reauthorization bill into law. At the same time, Republicans provided most of the congressional votes against the bank. And now, in the last few weeks, the GOP’s new House majority leader is threatening to block the next authorization bill and thus completely shut the bank down.
As the author goes on to note, “Partisan politics can abruptly shift; yet money politics almost never changes.”
In fact, the Democrats seem to be in full panic mode now that the bank they held to as corporate welfare may actually go away:
U.S. Senate Democrats sought to rescue the U.S. Export-Import Bank on Tuesday, insisting it would save American jobs.
Senate Majority Leader Harry Reid, a Democrat, scheduled meetings with other lawmakers. The 80-year-old bank will be forced to close unless Congress acts to renew its charter by Sept. 30.
Ex-Im offers financing to foreign buyers of U.S. goods, providing loan guarantees and insurance to local exporters as well as credit to purchasers abroad of U.S. exports.
Neither the House of Representatives nor the Senate has acted, and an August recess looms. Many Republican conservatives in both chambers oppose it. Some decry it as “corporate welfare,” a government effort to pick winners and losers in the private sector.
Back in June I wrote a post here titled Big business is afraid of conservatives—and they should be.
This is where American business, or more specifically American business leaders, have taken the wrong turn: the pursuit of wealth for no larger purpose than wealth itself. The financial industries gambles billions of dollars each day on investments that are completely intangible and do nothing other than make money. American manufacturers long had a Lockean social contract with their workforce. The pursuit of profit as an end unto itself resulted in workers being treated as disposable commodities. Our economic system has devolved into one of crony capitalism where business relies not upon a superior product or service but upon using purchased governmental clout to hamstring competitors. The military buys equipment it does not need and cannot afford because of the powerful nexus of K Street lobbyists and Congressmen who want to bring home federal dollars. Corporate CEOs are given bonuses comprising multiples of the lifetime earnings of the average working man while driving companies into bankruptcy or presiding over massive layoffs.
We are hardly a generation away from a government-crony capitalist oligopoly such as exists in Russia.
American business, as personified by the Chamber of Commerce, Wall Street, and K Street are right to fear conservatism. And the sooner that we conservatives come to the conclusion that our interests – free people and free markets – are not the same as the Chamber of Commerce the sooner we can get about our business.
American business, first in the finance sector but spreading to embrace large corporations, has ceased to be an ally of Americans and would rather be our master. The electoral environment has changed dramatically since 2010 and Big Business can see the corporatist gravy train screeching to a halt if conservatives continue to make advances. The Democrats are well aware of this unease on the part of American business. Their new-found enthusiasm for the Ex-Im Bank has nothing to do with jobs because, as Obama has demonstrated over the past eight years, they would rather have large numbers of Americans chronically unemployed or underemployed in order to create a demographic dependent upon government subsidies to live and vulnerable to Democrat class warfare campaigns. It has to do with the money the Chamber and other business organizations are more than willing to give to politicians to keep crony capitalism alive and well in America.