Why it matters who benefits

President Obama, as a practice, falsely portrays the two parties. The GOP, he maintains, are shills for big business, whereas he is the scourge of the special interests. I spend much of my time correcting these falsehoods, and today I took some heat from the Left for doing this.

Liberal blogger Ezra Klein comes after me for my critique of Matt Yglesias’s post which concludes that the GOP’s agenda is “indistinguishable from big business” — a conclusion that is clearly false. (Which party sided with big business on the stimulus?)

Klein tries to ding me for playing “guilt-by-corporate-association,” in my recent post, and in general.

But I’m not playing the “guilt-by-corporate-association” game. I’m explaining who is lobbying for what policies and who is benefiting from what policies. When I point out that some lobbied-up big business is lobbying for some big-government program and will profit from it, I don’t intend this as a decisive argument against the program. I do this for a few reasons:

1) Combating false conventional wisdom and Democratic dishonesty: The fact that big business loves big government renders false much of the rhetoric coming from our President, Democratic lawmakers, much of the media, and the Center for American Progress. The Democrats are basically running this year on the schtick that the GOP is owned by Big Business and that Democrats are fighting business. Showing how the President’s standard line is false seems like a worthwhile undertaking to me. You know, that whole “speaking truth-to-power” thing?

As a subset of this point, it’s worthwhile to defend the honor of the free-market philosophy. Jane Mayer calls the free-market movement “a pro-corporate movement.” Thomas Frank dedicates his career to arguing that libertarianism is simply shilling for the profits of big business. One thing I point out: a businessman who opposes government intrusion — be it a bailout, a subsidy, a regulation that would kill smaller competitors — is often forgoing profit (at least short term profit) that would be legal, but immoral. There’s a moral element to free-market arguments, and highlighting the temptation of corporatism makes this clearer.

2) Sowing skepticism about government programs: The more you realize that our policies were crafted not by well-meaning legislators or public-interest groups, but by lobbyists — for instance, the drug lobby shaping health-care or half the lobbyists in Washington crafting the climate bill — the more you begin to suspect that this legislation may not serve the public, or the bill’s purported goals.

A corollary: once you know who expects to get rich off a bill, you ask how they’ll get rich. The answer clues you into the likely consequences of the bill, and how they might not be the ones the proponents promise.

For instance, when I write that Nike and General Electric are lobbying for cap-and-trade climate legislation and would profit from them, this doesn’t prove the legislation is bad, but it raises these points:

(a) Democrats’ mislead when they portray the debate as one of polar bears-vs-Exxon Mobil. Really, it’s GE-vs-Exxon Mobil.

(b) How does Nike benefit from cap-and-trade? Well, because cap-and-trade serves as an energy tax on U.S. manufacturing, such as the New England factories of smaller competitor New Balance. But Nike’s manufacturing — nearly all in Asia — isn’t hit by U.S. climate policy.

Yeah, it’s dirty that Nike is knee-capping New Balance, but more to the merits of the bill, Nike’s fingerprints show us more clearly the economic costs and the environmental costs of this legislation. Shifting manufacturing to Asia helps a company deal with cap-and-trade, but it doesn’t help the planet reduce pollution or greenhouse gas legislation.

Similarly, GE’s partner in its Greenhouse Gas Services business is AES, which is building coal-fired power plants outside the reach of Chairmen Waxman and Markey. AES, like Enron before it, likes the idea of paying less for its coal overseas by partly knocking the U.S. out of the coal-burning business.

You see, it matters who’s getting rich and how, whether your interested in fairness of competition, the health of the economy, the purported societal benefits of legislation — or just the truth.

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