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Mo’ Money Mo’ Problems

 

CorporatocracyImagine how the mainstream media would react if the Bush administration colluded with “Big Oil” to artificially lower the price in order to help the Republicans in an election year? According to the L.A. Times, this is exactly what the Obama administration is doing with the insurance industry. The popularity of the Affordable Care Act is going to hurt the Democrats this fall, and the administration knows it. To hold onto as many seats as possible the insurance companies have agreed to keep premiums artificially low, and in return they have received a guarantee from the Administration to be bailed out if they incur any financial loss.

Many have bought the false narrative that corruption in Washington stems from lobbyist and special interest groups influencing politicians. In reality, the L.A. Times provides a perfect example in how both big business and big government work together to further their agenda. This false narrative has resulted in the American people believing that removing money from politics will result in the politicians being free to serve the people. While this theory is quaint and sounds great on paper one significant detail seems to be consistently overlooked, politicians use big business as much as big business uses the State. In many instances, the politicians have more interest in companies than the companies have in Washington (i.e. Microsoft and Apple).

As the government gets bigger so does the opportunity to make money. As a result, instead of focusing their attention on innovation or creating products, they spend their time and resources lobbying members of Congress that can and do help their bottom line. The mainstream media and the left give the impression that lobbyist are trying to influence the government to remove regulations and obstacles that make doing business difficult. In fact, the message coming from the left is entirely wrong. In reality, big business is one of the biggest advocates of regulation. Why would they support regulations you ask? Well, it is simple; regulations quite often eliminate the smaller competitors of big business that simply cannot afford to comply with the steady influx of new regulations. Conservatives understand that regulations don’t hurt large corporations but small businesses.

For example, the “Family Smoking Prevention and Tobacco Control Act (FSPTCA)” which was signed into law in 2009. President Obama claimed that this law was a victory in the “war on tobacco.” In the most basic sense, this law created regulations in regard to the production of tobacco products. One of the main advocates of this law was Philip Morris, the largest Tobacco Company in the country. They had been lobbying for this when it was first introduced fifteen years ago. What an interesting dilemma…why in the world would Phillip Morris support a law that would only make doing business harder? To eliminate competition from smaller companies who can’t afford to comply with the new regulations. By taking advantage of government’s power, they create for themselves an economic environment where competition does not exist.

General Electric provides one of the best examples of big business merging with government to further its own agenda. Right before Obama took office in 2009, CEO Jeffrey Immelt sent a letter to stockholders that included the following. “The global economy and capitalism will be “reset” in several ways. The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner…Successful companies won’t just “hunker down”; they will seek out the new opportunities in a reset world.”

The kind of world Jeffrey Immelt is glorifying is the kind of world that kills innovation, limits economic development, and greatly reduces the freedom of the American people. It is the limited government that has made this country as prosperous as it has been. For a moment let’s reflect on the history of this nation. In 1893, the Federal Government turned to the private sector for what could be considered a bailout. What transpired was J.P. Morgan lending the government $100 million (3 billion today) in order to stabilize the financial crisis that was spiraling out of control. Ironically enough, a little over 100 years later the federal government has become so large that the private sector now turns to Washington to be bailed out.

Newt Gingrich made an insightful observation about the detrimental effect lobbyists can and typically do have on economic progress. “If we had today’s government in the 1800s, stage coach lobbyists would have fought for a law saying that trains couldn’t go faster than a horse because it’s unfair.” There is a lot of truth in this; in fact Germany has laws prohibiting businesses from being open past a certain hour because it is “unfair to their competitors.”

When it’s all said and done, what is the best way to reign in this kind of corruption? Without question, the only way to resolve this issue is to reduce the size and scope of the federal government. This places Liberals in a tough situation because on one hand they believe in big government and at the same time they fear big business. In a very ironic way, Liberals end up creating the thing they fear the most by voting to give more power to the federal government. Is anyone shocked that under President Bush and Obama big business has grown in proportion to the size of government? This incident reported by the L.A Times is a perfect example as to why Conservatives advocate for smaller government.

 

Below is a funny video of the benefits of doing business with the government.

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