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July 09, 2012

Real AP News Story (Not Opinion): "Conservatives Make It Rough For Business"

"News."

y DONNA CASSATA Associated Press

WASHINGTON (AP) -- Conservative Republicans have roughed up the business community this year - and it's not over yet.

The U.S. Chamber of Commerce, the National Association of Manufacturers and major companies like Boeing Co. and Caterpillar Inc. all wanted quick reauthorization of the Export-Import Bank, which helps finance American companies' overseas sales. Congress had reaffirmed the independent federal agency some two dozen times since its creation in 1934. But this year it took months of pleas, briefings and negotiations to overcome conservative opposition.

...

Republicans like to tout themselves as the best friends of business, and the rhetoric only grows louder in an election year. They talk forcefully about their job-creation agenda and determination to undo the burdensome regulations they say arise out of President Barack Obama's policies.

Yet when it comes to many of industry's top legislative priorities, conservative Republican lawmakers and like-minded groups including the Club for Growth and Heritage Action have thrown up roadblocks to tasks that had been easy before the 2010 elections sent a large class of conservative tea party insurgents to Congress.

They and their ideological leaders argue that the marketplace should dictate what businesses thrive and falter, not Washington.

Yes, that's so controversial.

Remember the days when Democrats (and their media Spirit Squad) railed against Republicans for "favors to big business"? Well, the Democrats have changed their position, and the media has quickly followed suit.

There is actually a big story here, which one could explain without the AP's bias.
This good opinion piece by Tim Carney on the Conservative Case Against Favors to Big Business explains the right's move away from Crony Corporatism.

Politically favored businesses of course benefit from direct subsidies (think agribusiness) and government loan guarantees (think Solyndra and Boeing), but Mitchell makes the important point that regulation itself creates a privileged class.

...

In the Obama era, as Democrats and the media try to paint deregulation as some sort of dangerous sop to big business, Mitchell's notion of "regulatory privilege" is a crucial tool for dismantling the old narrative that regulation protects the public...

...

The research Mitchell brings together helps show why government-granted privilege is so important to big business and so costly to the rest of society. In one key finding, he highlights research indicating that free markets, with fewer barriers to entry and fewer bailouts to prop up failed giants, make it harder for dominant businesses to maintain dominance.

Mitchell cites a 2008 study in the Journal of Financial Economics that found "big business turnover ... correlates with smaller government, common law, less bank-dependence, stronger shareholder rights, and greater openness [to trade]."

Further, in Mitchell's words, "those nations with more turnover among their top firms tended to experience faster per capita economic growth, greater productivity growth, and faster capital growth."

Big business wants safety, but big-business safety hurts the rest of the economy.

Why does Big Business go along with regulation? The way it works is this: Business agrees to liberal intervention in exchange for a a concession to big business, such as protecting it against competitors. The article notes that Phillip Morris went along with Obama's anti-tobacco initiative because the law contained a sweetener essentially protecting PM's market dominance.

That's how it always works. PHaRMA endorsed ObamaCare in exchange for a favorable payment schedule for its drugs.

I think business should begin heeding the counsel of (IIRC) Ben Franklin: Those who would exchange an essential freedom for a little temporary security will wind up with neither.


Thanks to Dr. Spank.


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posted by Ace at 04:44 PM

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