“We need corporate welfare reform.”
Near the end of a speech that included hyperbole, vitriol, and some straight-up attacks on capitalism, Teamsters President Sean O’Brien told the Republican delegates something they needed to hear.
“The biggest recipients of welfare in this country are corporations,” O’Brien said, “and this is real corruption.”
Republicans understand well that business is the engine of America. The United States innovates better than any other country, is wealthier than any other country, and is tougher than any other country because we have the most private enterprise.
But while a “pro-business” disposition makes sense, it should never override free-market principles — yet often it does.
Republicans keep making exceptions to these principles at the behest of industry lobbyists. They preach self-reliance and creative destruction, but cave when big business comes and asks for an exception.
The Jones Act, the Export-Import Bank, the Renewable Fuel Standard, the sugar program, the Overseas Private Investment Corporation, farm subsidies, and dozens of other corporate welfare programs rely on Republican support for their continued existence.
These programs benefit favored businesses and industries but undermine the common good and the economy as a whole.
Republicans have also hamstrung their own tax-cutting efforts by listening too much to corporate welfare lobbyists. Low tax rates with no loopholes would be optimal to spur productivity and maximize employment. Every time Congress grants a special tax break for a special interest, it makes it harder for fiscally conservative lawmakers to lower rates.
Democrats are worse hypocrites on this. Corporate welfare fits perfectly with their belief in central planning and activist government. Their pretensions to be the party of the little guy ought to make them blush in the light of their constant support of handouts and special favors.
Joe Biden and Barack Obama ran for reelection in 2012 on their bailout of General Motors. Biden bragged about stimulus subsidies for Solyndra and other green-energy cronies.
The difference is that Republicans could build an economic plan that doesn’t involve subsidies to big business — a free-market economic plan. Democrats cannot. Necessarily, Democrats’ economic plans will require bailouts, loopholes, and subsidies, lest they kill industry and instantly ruin the economy.
The issue of corporate welfare takes on extra importance now, as the GOP seems fully to embrace populism. Populism is not an ideology or a set of policies, it is more an attitude or an allegiance. Thus on the Right it can take very different forms.
A self-defeating populism would demonize profit, reject international trade, and embrace an aggressive government role in managing the economy. This would entrench big businesses, destroy competition, and hurt workers. Some economic nationalists on the Right have explicitly advocated this.
A more productive capitalism would demolish all special privileges for big business.
Republicans should craft immigration policy not for what employers want, but for what serves Americans. International trade must be considered a contingent, not absolute, good. National security trumps gross domestic product, and occasionally that requires keeping production domestic. Also, conservatives who care about community, faith, and family should understand that creative destruction sometimes can destroy very valuable things.
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“The economy” is not a good in itself, but is something that serves human good. Republicans should not turn industry into a golden calf.
What O’Brien meant by “corporate welfare reform” is opaque. We hope, though, that Republicans will take the charge seriously, and try to unrig the economy.