During the 2008 presidential campaign, Americans were treated to a number of populist sermons on the "special interests" who would oppose "reform" at any cost to maintain the "status quo" from which they "profit financially or politically." The drug companies, the energy companies, the Wall Street bankers, and the health insurers were the corporate enemies of a just and harmonious America, or so one might have gathered.
Obama was at the vanguard of this populist charge. But since his election, he has proposed health care legislation that would subsidize Pfizer and PhRMA, a cap and trade plan that would drive profits to General Electric, and Wall Street bailouts that lined the pockets of the same Goldman Sachs bankers he so reviled during the campaign. What happened?
Washington Examiner columnist Tim Carney exposes and investigates this monumental disconnect in his new book Obamanomics: How Barack Obama is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses. Carney explores the "political strategy of partnering with the biggest businesses in order to create new regulations, taxes, and subsidies." Those measures, he argues, actually benefit the biggest businesses by crowding out competition, consolidating market share, or giving billions in subsidies directly to those companies.
To the chagrin – though hardly the surprise – of many conservatives, very few members of the media raised questions about the blatant contradictions between Obama’s "little guy" attitude during the campaign and his support for the behemoths of big business as president. Few have noted his tendency to demonize opponents as lackeys of some large corporation, when in fact the Goliaths of the private sector are on board with his agenda, standing as they do to to make billions from it.
With thorough research to back him up, Carney goes where the mainstream media will not, exposing the cronyism, hypocrisy, and economic damage that Obamanomics entails. In his interview with NewsBusters, Carney discusses his "free market populism", the failure of Republicans to live up to their own ideals, and his routine debunking of myths peddled by the liberal left. (Full disclosure: I was a summer intern at the Examiner and worked with Carney on multiple occasions.)
Obamanomics: How Barac...
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NEWSBUSTERS: You hear, especially from Tea Party folks, the word socialist get thrown around a lot. But what you’re describing, it’s certainly not socialism because it works sort of within the framework of capitalism. Do you think the debate would be more honest maybe if it were actually a socialist capitalist dichotomy?
TIM CARNEY: Oh yeah. I always tell my liberal friends, I wish that we were debating about a single payer vs. a free market health care. Instead, we’ve got two different kind of mixed economies. Something like the current status quo of health care, against an individual mandate where the government is requiring us to buy health care. Or on global warming, what Obama pushes is not some vast strict regulatory regime, it’s a cap and trade plan where people can get rich off of gaming the system right, maybe doing what the government wants them to, but special carve-outs get written in.
So calling Obama a socialist is off the mark. Saying that he believes in government control of the economy is accurate, but he still believes in sort of harnessing the power of profit and loss, and having the government kind of steer that ship while business does the driving. That’s what I mean by Obamanomics is, it’s big business together with big government changing the shape of the economy.
NB: And obviously the price of that, as you point out, is that small businesses get crushed under the regulatory weight –
CARNEY: They get crushed because they can’t afford to comply with the regulations in the way the bigger guys can. The example I give in the book is Wal-Mart wanting an employer mandate on health care. A smaller retailer can’t necessarily provide the health care the government mandates, Wal-Mart can. That’s their best thing is using their economies of scale to get a lower price for something.
But also smaller businesses can’t afford K Street lobbyists who make sure that the little details in the bill are beneficial to them or who know how to comply exactly with it, or who tweak the regulations, or who can go and actually get the handout being given. So the cost of regulation is one reason why big business benefits often from regulation, but the need for a lobbyist is another reason why small business is the biggest victim because they can’t always afford a lobbyist.
The Left, The Right an...
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NB: It’s very hard to reconcile what the president has done with his rhetoric during the campaign, and even his rhetoric now, he was stumping for Coakley, and he’s talking about how ‘we don’t need another big business senator in Washington’. The way you describe it, Obamanomics is a necessary consequence of Obama’s agenda, not necessarily how he would have set out to accomplish that agenda.
CARNEY: Well, let me put it this way. What I’m not saying, and I write this explicitly in the book, what I’m not saying is that Obama is bought and paid for by special interests. You could look at all the money he got from Wall Street and the drug makers and look at how the drug makers benefit from health care reform and Obama likes all the bailouts and say, okay he was bought and paid for, but that’s reading into his heart and mind and that’s just not something you can do from available evidence is know what his actual intentions are.
I’d say there are two reasons why Obama ends up teaming up with the likes of Goldman Sachs and Pfizer. The first is tactical necessity. He needs allies in his efforts to make these broad changes, whether it’s Wall Street, health care, the environment, etcetera.
The second is the economic laws that I was discussing earlier. Big government will inevitably benefit big business. A caveat there: a giant communist steamroller will crush big business. A single payer plan will crush big business. But the big government of the sort Obama is willing to do, a left of center big government, that will inevitably help big business. So you can even imagine Obama believed he was going to run the special interests out of town, and then he starts erecting his, you know, his health care reform, his cap and trade, and all of a sudden the big businesses come flocking going ‘we love it! tweak this, tweak that, and we’ll make profit.’ And he might have been a bit surprised, but I don’t think so considering that he raised more money form Wall Street than any candidate ever, he raised more money from the drug industry, from the health insurance industry, and even from the oil industry, than any candidate ever. I don’t think he was surprised by the big business embrace of his agenda.
NB: You I think refer to it as ‘the big myth’ in the book, sort of a useful myth, that even people who knew that Obama would not be this savior and stand up to big business and lobbyists, people like Paul Krugman would peddle this myth as a way to give Obama some populist appeal.
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CARNEY: Yeah, and the heart of the myth is that if it’s big government, than it’s anti-big business. That’s the Krugman line. That’s to some extent the Thomas Frank line. And now you’re seeing it again with Wall Street. ‘Oh well Scott Brown’s with Wall Street because he opposes this regulation.’ Well, look at who the top Wall Street lobbyist is right now, it’s a man named Thomas Nides, I talk about him in the book. He’s a Morgan Stanley banker, who comes from Fannie Mae, we know what Fannie Mae was. Fannie Mae was sort of a money laundering operation for politically connected Democrats. The top lobbyist maxed out to Barack Obama, maxed out to Rahm Emanuel. These are the Wall Street lobbyists he pretends he’s taking on. And I looked at the other WS lobbyists, they all have four, five, six visits to the white house.
So Obama comes in, he says he’s battling Wall Street, but he doesn’t name who he’s battling. He proposes regulations, and then, the next step, the unstated major premise here, is that business always wants to be deregulated. And so then he gets to tar his opponents as being the stooges of business even though there’s no evidence right now that Wall Street is opposing regulation. They’re opposing the rough idea of a big bank tax. And I promise you, just like you saw the health care reform get brought around to be exactly what the drug makers wanted, and some of what the health insurers wanted, you’ll see the Wall Street regulation end up being the sort of thing that protects the big banks by keeping out smaller competitors.
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NB: With yesterday’s election [US Senate in Mass.], all the columnists are saying this is a repudiation of, well, cronyism seems to be the way everybody’s describing it. Do you read it as voters sort of waking up to Obamanomics?
CARNEY: I think part of it is certainly the unseemly deal making. My wife said to me last night, ‘every politician promises to be transparent. Why did we believe Obama?’ The point is we did. Even those of us who opposed all his policies, we thought, well maybe, maybe he’ll be something of a reformer. My friend and now my colleague at the Examiner Dave Freddoso, his book last summer, ‘The Case Against Barack Obama’, said no, Obama has no record of being a reformer, so if he does come into the White House and sort of cleans stuff up, and ends the game playing as he said, that would be a change. And the change didn’t happen. Obama’s kept being the politician that he was. And I don’t think he’s a corrupt politician, but he’s a politician, and politics is inherently a bit corrupt; I mean its deal-making, its compromise.
And this union carve-out on the health care bill, it’s probably a moot point, but it’s still a great moment. And it might have been a big moment in tipping the race to Scott Brown in Massachusetts because it said, ‘we’re going to raise taxes on people, unless you’re in a labor union’, which, the labor unions are the major political force driving the Democratic majority. And, guess what, if you’re thinking about joining a union, well now you have that much more incentive because you get an automatic tax cut by joining a union. And so it was this, on the surface, dirty deal, and I think that’ll stick in people’s minds. Some of what I talk about, the deals with the drug company, really stuck in the minds of the left I think, when he cut a deal with Billy Tauzin to advance the drug bill. Some of the other stuff I talk about is more behind the scenes, I try to draw it out, but that labor union deal, that was right out there in the open, and I think that that might be turning a lot of voters off.
January 30, 2010
