“Corporate cronyism” lives on
But will the debate over the influence of mega-corporations continue to animate political debate?
This article was first published in New Hampshire Business Review.
Passage last month of a bill to keep the federal government running also extended the life of the Export-Import Bank, a controversial federal agency, until June 2015. The measure may also extend the life of an inside-the-GOP debate over “corporate cronyism” and mega-corporations that succeed in business due more to their political connections than their entrepreneurial prowess. Such debate is welcome.
In case you haven’t paid attention to discussions going on among conservative members of Congress and in the conference rooms at conservative think-tanks, right-wingers have taken to denouncing the cozy ties between big government and big business. The Ex-Im Bank, which provides loan guarantees to U.S. corporations peddling their goods and services in other countries, may provide the political context, but the principles reach far into other sectors of the economy and federal policy.
Speaking about the Export Import Bank and the “conservative reform agenda” in April at the Heritage Foundation, Senator Mike Lee of Utah, a possible Republican
Senator Mike Lee at the “Freedom Summit” in Manchester
presidential candidate, denounced “America’s crisis of crony capitalism, corporate welfare and political privilege: In which government twists public policy to unfairly benefit favored special interests at the expense of everyone else.”
This is the stuff of fire-breathing populism, not what we expect to hear at Heritage.
But Senator Lee continued: “The more power government amasses, the more privileges are bestowed on the government’s friends, the more businesses invest in influence instead of innovation, the more advantages accrue to the biggest special interests with the most to spend on politics and the most to lose from fair competition.”
Sen. Marco Rubio, another conservative Republican considering a run for president, has made similar statements. “Big companies may not like big government, but they can afford to deal with it,” he said at a GOP fundraiser in New Hampshire.
The senators remind us of President Eisenhower warning the American people to “guard against the unwarranted influence, whether sought or unsought, by the military-industrial-complex.”
Take Boeing, the aerospace company that ranks second among Pentagon contractors and has also attracted the ire of Ex-Im Bank critics.
According to the Center for Responsive Politics, Boeing’s hangar houses 85 lobbyists. Its annual tab for lobbying runs to about $15 million a year, and more than $9 million already in 2014.
That amount may be understated. Political scientists believe actual lobbying expenses are three times the amount disclosed on official forms
There’s more to cronyism than money spent on lobbyists. There’s the issue of the “revolving door,” people who go from elected office and jobs on Capitol Hill or the Pentagon to more lucrative careers at lobbying firms. Boeing’s lobbyists include four former members of Congress plus a firm founded by former House Speaker Richard Gephardt. In Eisenhower’s terms, Boeing’s influence is definitely “sought.”
Big companies also grease the wheels through campaign contributions, especially to incumbent members of Congress in leadership roles.
CQ Roll Call reported last month that “four of the top five candidates for the chairmanships of the House Armed Services and Intelligence panels have raised considerably more money this election cycle than they did at a similar point in 2012. The same four have also raised much more money from the defense industry than before – in some cases, more than doubling their takes.”
Rep. Mac Thornberry, R-Texas, is a contender for the chairmanship of the House Armed Services Committee. According to CQ Roll Call, Thornberry has more than doubled his take from defense firms compared to the previous election cycle. Number five on Thornberry’s campaign committee donor list is Boeing.
The federal government and the Export-Import Bank have avoided shutdown for the time being. But the notion that mega-corporations have too much influence over federal policy has found new champions and should outlast the Ex-Im debate. Perhaps even the Democrats will join in.