On the eve of the 2010 midterm elections, President Obama accidentally summed up his governing philosophy in an interview with Univision: "[W]e're gonna punish our enemies, and we're gonna reward our friends ..."
This is the cornerstone of politics in Obama's adopted hometown of Chicago. It is also one of the few promises Obama has actually kept.
Just look at the Obama administration's treatment of utility giant Exelon Corp., which has had Illinois' legislature (and especially Obama's old state Senate mentor, Emil Jones) wrapped around its finger for years. An Exelon lobbyist once referred to the company as "the president's utility." One of Obama's top fundraisers sits on Exelon's board. Obama's top political adviser, David Axelrod, worked as an Exelon consultant. Obama's former Chief of Staff Rahm Emanuel helped create the company through a merger when he was an investment banker. Exelon is one of Obama's oldest "friends."
As such, Obama has rewarded Exelon with a $200 million stimulus grant from the Energy Department, a $646 million loan from the Treasury Department and favorable regulations from the Environmental Protection Agency.
Obama gave similar friendly treatment to the Carlyle Group, a private equity firm whose board members have received U.S. ambassadorships from Obama. When the United Steelworkers union needed more than $200 million to save a Philadelphia oil refinery, Obama worked with Carlyle to waive EPA emissions requirements for the plant. Without the special regulatory treatment, Carlyle never would have invested the money.
Meanwhile, in Texas, Obama was busy trying to punish his enemies. His EPA's Cross-State Air Pollution Rule would have inflicted $2.7 billion in economic costs on the 28 states that produce the vast majority of electricity in the United States. Thankfully, the Fifth Circuit Court of Appeals has intervened. In their opinion throwing out the new rule this week, the judges said Obama's EPA was "reluctant to acknowledge any textual limits on its authority."
Obama wants Americans to believe the foundation of America's economic success comes from all the roads and bridges that government builds. He's wrong. America's economic miracle came from our 200-plus-year commitment to economic fairness and the rule of law. Obama's energy agenda is a testament to how his administration is undermining the foundation of America's economic growth.
At every turn, Obama has favored some firms (Solyndra, Exelon, Carlyle, Duke Energy, etc.) while simultaneously punishing others (coal plants, oil companies, the natural gas extraction industry, transportation firms, etc.). There is a phrase for Obama's economic policies: "crony capitalism."
Warning America not to go down the same path his native Italy has chosen, economist Luigi Zingales recently advised: "For the U.S., the moment to act is now, before the cancer of crony capitalism metastasizes. ... [W]e must curb the political power that large industry incumbents have over legislation. Not only does it distort legislation, it also forces new entrants to compete on lobbying instead of concentrating on making more innovative and cheaper products."
As a candidate, Obama promised to change how business was done in Washington. In office, he has done so by making it worse.