Liberals go to the barricades to defend crony capitalism

Article Highlights

  • There's nothing like a good fight over corporate welfare to bring out the Left's love of Big Business.

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  • Democratic politicians have dropped populist pretenses and embraced corporate-federal collusion that Ex-Im embodies

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  • There's nothing new about the Left favoring corporate welfare

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There's nothing like a good fight over corporate welfare to bring out the Left's love of Big Business.

In the current battle over the Export-Import Bank, Democratic politicians and liberal journalists have dropped their populist pretenses and openly embraced the corporate-federal collusion that Ex-Im embodies.

Democrats have formed a united front in support of the bank, seizing on an opening to appeal to the hearts and wallets of the business community.

For some, it's largely partisanship or disdain for the Tea Partiers who want Ex-Im dead. For others, it's that increasing government's role in the economy takes precedence over railing against Big Business. And for a shrewd few, it's about raising money from K Street and Wall Street.

Liberal writer Michael Lind of the New America Foundation, who in 2013 mocked the notion of free-market populism as “Ayn Rand in overalls,” this year sees the free-market attack on Ex-Im as a grave danger to “Big Business,” and, by extension, all of America. Lind blasted “militants on the right.”

“Angry outsiders on the right are threatening to replace business-friendly market populism with real populism,” Lind warned. “And that, to the business community, is downright terrifying. It ought to frighten the rest of us, too.”

Margaret Carlson, a liberal commentator at Bloomberg, wrote that ending Ex-Im, and thus leaving the financing of exports to -- gasp -- banks, was as absurd as privatizing the U.S. Mint.

Simon Maloy at the partisan-Left, foamed at the mouth about incoming Majority Leader Kevin McCarthy's decision to oppose Ex-Im, calling it “a pointless, cynical attempt to appease angry conservatives.”

New York Times opinion writers have published at least four defenses of Ex-Im this summer. Neil Irwin wrote that we ought to save Ex-Im because even without the subsidy agency, government is already involved in helping businesses, and so “we're all crony capitalists, like it or not.” In for a dime of corporate welfare, in for $160 billion!

Blogger and economist Paul Krugman gave a qualified defense of Ex-Im on the Times site, and liberal business writer Joe Nocera dedicated two columns to defending Ex-Im, which he laments has become a “Tea Party piñata.” Trying to cut export subsidies, Nocera writes, is “an attack on exports.” One of his authorities on the matter is Republican congressman Chris Collins, who received Ex-Im subsidies. It's an amazing turn when millionaire Republican congressmen who received corporate welfare are now heroes of the liberal New York Times.

Rep. Steve Israel, chairman of the Democratic Congressional Campaign Committee, told Politico that the GOP resistance to Ex-Im “enforces the intuition that the American people have that Republicans are willing to inflict damage on the economy to protect their politics.”

As Democratic Sen. Chuck Schumer explained: “The Tea Party is moving the Republican Party so far to the right on important issues like the Export-Import Bank, that the business community is now farther from the Republican Party and closer to Democrats.”

What Schumer and Israel have in common: They're fundraisers for Democrats.

Israel’s DCCC requires him to raise money for House Democrats. Schumer is historically one of the chief fundraisers for Senate Democrats.

Politico’s MJ Lee explains what these two are up to: “Democrats have formed a united front in support of the bank, seizing on an opening to appeal to the hearts and wallets of the business community ahead of the November elections.”

Israel and Schumer both come from New York, highlighting one of Ex-Im's other big clients besides Boeing and the big exporters -- Wall Street. Ex-Im mostly subsidizes exports through loan guarantees. That means JPMorgan Chase lends money to a foreign airline, and if the foreign airline -- say, Ethiopian Airlines -- fails, the U.S. taxpayers eat JPMorgan's loss.

There's nothing new about the Left favoring corporate welfare in general, and Ex-Im in particular. Even under President George W. Bush, many more Republicans than Democrats opposed Ex-Im renewal in Congress: 50 House Republicans voted against Ex-Im in 2002, compared to only 26 Democrats.

What’s new is that there is a strong anti-corporatist streak on the Right and even within the upper reaches of the GOP.

When both parties were thoroughly corporatist, Democrats could sprinkle a few tax hikes into their policy stew of subsidies and mandates and claim the populist mantle—and the media would believe them.

Now, with the GOP opposing (some) corporate welfare, the Democrats’ corporatism is laid bare. Guys like Schumer and Israel probably figure that if they can’t pretend to be fighting for the little guys anymore, they may as well more aggressively fundraise from the big guys they’re subsidizing.

Instead of scrambling to keep the love of Big Business, Republicans should accept Schumer’s framing: The Democrats are the party of Big Business and Big Government.

Let’s see how that works on Election Day.

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Timothy P.

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