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POLITICS

If you want bigger government, you need to side with big business

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Politics,Beltway Confidential,Timothy P. Carney,Politics Digest

The media too often see Washington battles as Big Business vs Big Government. This is usually not the case. Often it’s Big Business & Big Government vs. Small Business.

Brookings scholar and Clinton, Gore, Mondale advisor William Galston wrote a piece today telling liberals that they need to side with Big Business over small business if they really want to increase the government’s role in the economy. Writing in The New Republic, Galston writes:

The Obama administration will need to recognize the fervent opposition of small businesses to its priorities, while taking advantage of large corporations’ willingness to cooperate.

Galston is exactly correct about the alignment of interests. Big Business tends to do well when government intervenes. Small business dies.

Big Business can afford the added costs of regulations. It can hire up the former senators as its lobbyists to tweak the rules. It can hire the former Food & Drug Administration Commissioners as its lawyers to work around the rules. And it will always get a disproportionate amount of the subsidies.

Here’s how Galston puts it:

Corporations have sizeable cash flows and access to credit markets, which gives them a cushion against adversity and added costs; small businesses often operate much closer to the margin and are acutely sensitive to policies that threaten to drive up costs. Corporate CEOs can hire experts to help them cope with added regulatory burdens and can spread the costs over a large workforce; small business owners must deal with these burdens by themselves and have few ways dilute their impact.

I think Galston misses the mark, though, when he says Obama doesn’t grasp this truth enough.

Corporate-federal collusion was embodied in ObamaCare, largely written by drugmakers, vociferously supported by hospitals, and driving business to private insurers. Obama’s stimulus was a huge gift to corporate America, with its plethora of subsidies. In the fiscal cliff deal, Obama insisted on a raft of corporate tax extenders. Obama’s “New Economic Patriotism” is a dress for corporate welfare to wear to the prom. Obama supported TARP. He bailed out GM. He signed cash for clunkers. He has set new records in export subsidies. I could fill a book with this sort of thing.

But setting our differing assessments of Obama aside, I thank Galston for his clear-eyed view of the business-government relationship.

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