Corporate Welfare - Uniting Left and Right in Opposition

The tea party movement was born in part over the frustration with the largess expended on banks, insurance companies and auto makers at a time when government had no business deepening the debt of the country. TARP and Stimulus became dirty words, as we watched our tax dollars bail out the banks and Fannie Mae, whose shoddy lending practices had kicked off the financial crisis to begin with. These complaints are not unique to our movement; in fact, one of the chief complaints on the left is that Washington caters to corporate interests. This is an opportunity for the next Republican candidate for President; but will require extraordinary discipline. (Pictured above are big three auto execs asking for federal dollars in November 2008.)

Discipline is needed because one can always obtain a temporary local advantage by catering to a particular industry or special interest. The most notorious example is ethanol, against which I have railed in numerous posts. Coming out against ethanol subsidies and tax breaks can cost a candidate front runner status in the Iowa caucuses. Obama showed that success in Iowa can be leveraged all the way to the White House. Further, politicians of every stripe want to be seen as "having a plan" to fix the economy. Usually these plans always include government spending on their pet projects, benefiting specific corporations and industries. Obama will be pushing high speed rail, bridges and green jobs, no doubt, on Thursday night. Zero Hedge has the scoop on the emerging scandal of bankrupt Solyndra, "green" solar company that is now bankrupt. Rick Perry had an "Emerging Technology Fund" to create jobs in Texas, which also seemed to help campaign donors. No Republican has vocally come out against the various agricultural price support programs that make absolutely no sense in a modern economy.

But I notice that when I engage those on the left, the issue of corporate welfare gets traction. I have on DailyKos, arguing against the GM bailout. I discussed areas of agreement with the Coffee Party folks. A recent exchange with Kelly the Little Black Dog, a progressive, confirmed that corporate welfare is unpopular on the left.

Politics is about building coalitions to achieve victory. Big business and big labor often collude to get big government to grant them favors. Other times big businesses can get the favors on their own, especially financial institutions. (The Fed, or dirty Fed, plays a role here, but that is beyond the scope of this discussion.) It strikes me that corporate welfare is so broadly unpopular that a principled stand against it would be a key ingredient to winning a Presidential campaign. In fact, it would be a great platform for the Republican party, but they would have to follow through and eschew what corporate donations they might lose as a result. But running against the "corporatist" Obama could be a clear path to victory.

Ultimately, the country needs a "level playing" field for business competition. I don't mean that government ensures equality of outcome, but that it ceases to help favored companies or industries. It will help grow the economy by reducing the uncertainty that the federal government will intervene and wreck the business model of businesses. Even corporate fat cats might be in favor of that.