It’s nearly impossible to find a subject on which the left and right agree in modern-day America. That’s not necessarily a bad thing, but I’m sure that the current Congressional gridlock is driving the centrists and moderates of both parties absolutely nuts. While the gridlock will undoubtedly remain until one party achieves some sort of clear edge in November, I believe that there are a few topics on which many on the left and the right do agree. First and foremost, there’s the issue of corporate welfare.
Chances are, you don’t like corporate welfare. Neither do I. Nobody does, and who would? Big business getting a hand-out from the government immediately clashes with everyone’s idea of what’s fair. Unsurprisingly, the bailouts conducted by both the Bush and Obama administrations have remained deeply unpopular with the American people from their inception.
I’m not asserting that everyone dislikes corporate welfare for the same reasons. Big shock: the left and the right (and moderates, for that matter) disagree over why corporate welfare is A Bad Thing.
The left (and particularly Occupy Wall Street) is disgusted that big banks and corporations run by wealthy individuals received a bailout in the midst of a recession, while the middle-class (particularly homeowners) and the poor received no such aid. Moreover, they believe that the “greed” of the bankers who racked up huge profits during the boom was the primary cause of the recession. Therefore, the idea that those very same bankers get a bailout awhile the rest of us suffered through the recession on our own infuriates them.
Moderates generally don’t take such a hard line against Wall Street and the wealthy, but they rarely support corporate welfare. Every moderate I’ve spoken with regarding corporate welfare opposes it on the basis that the big corporations could “take care of themselves.” If some business needed and deserved help due to the recession, wouldn’t it be small businesses?
After all, small businesses must already compete with their larger, well-established, and better-financed rivals in the marketplace. Why should the big guys get a government handout while the little guys continue to struggle? One moderate succinctly argued that, “Maybe the banks were too big to fail, but the Mom and Pop shops were too small to survive a bad economy.”
Conservatives (and particularly the Tea Party) tend to attack corporate welfare very differently. Whereas the left and moderates are concerned with making sure that “the right people” are bailed out instead of Wall Street and the rich, most conservatives don’t think that anyone should be getting bailed out. No such power is granted to the federal government via the Constitution, and saving corporations from bankruptcy certainly isn’t one of the proper functions of government.
Looking past the constitutional argument, corporate welfare just doesn’t fit within a free market. President George W. Bush infamously claimed that he “abandoned free market principles to save the free market system.” The point he’s trying to make is understandable, but it’s also misguided. Violating the rules of a system to preserve it rarely works, and even if it does, it sets a dangerous precedent that will probably destroy the system at a latter date.
It’s important to remember that corporate welfare is more than just bailouts. Subsidies, targeted tax breaks, government-granted monopolies and privileges, and many other government intrusions into the marketplace constitute corporate welfare. While some forms of corporate welfare may be less offensive than others, all of them will distort the price system and the invisible hand of the free market.
If hardly anyone supports corporate welfare, why were the bank bailouts passed at the start of the recession? Simply put, Congress was scared into it by prominent economists and the slowing economy. President Bush insisted “our entire economy is in danger.” Television pundits cried that the banks were “too big to fail,” and the idea spread that we were on the cusp of a second Great Depression.
Not everyone took President Bush at his word, and dissent came from elements of the left and the right. Progressive Congressman Lloyd Doggett (D-TX) complained, “The whole bill has been fueled by fear, and hinged on haste.” On the right, FreedomWorks actively fought against passage of the Troubled Asset Relief Program (TARP) and every other bailout.
Congressman Ron Paul (R-TX) wrote a CNN op-ed warning that by, “Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term.” This scattered opposition wasn’t enough to stop the growing panic within the media and leadership of both parties, however, and the bailouts ultimately passed.
Conservatives support a free market, not “big business.” Once you insert corporate welfare into a free market, you create a system of “crony capitalism.” Regardless of their reasoning, most Americans don’t support corporate welfare. Nobody expects this Congress to pass any significant legislation before the election, but if they were to change their minds, I would suggest passing a bill to end the practice of corporate welfare in the United States.