Democrats’ Role Reversal on Corporatism

Old stereotypes die hard, regardless of their increasing inability to reflect reality. Consider the caricature of the corporate fat cat, clad cartoonishly in top hat and spats, building monopolies, crushing competition, exploiting workers and all the while lining his pockets with wads and wads of filthy lucre. Now quick, how do you think our straw industrialist will vote? If you said Republican, you’re not alone.

Democrats have successfully tarred Republicans with being the Party of Big Business, and not without some justification. Where they err, however, is in asserting that big business favors the fundamentally conservative ideas of deregulation and small government.

It cannot be pointed out too often that the false dichotomy between business and government is just that: false. The Party of Big Government is by definition the Party of Big Business. Contrary to popular opinion, the free market is not a warm and fuzzy place that allows corporations to consolidate and maintain power. The constant threat of competition forces all firms, large or small, to keep on their toes to avoid being usurped by younger, more innovative competitors. In a true capitalist economy, business does not have the luxury of using the law to protect its interests and squash competition. Such power is the province only of governments. It should come as no surprise, then, that corporations go to great lengths to appropriate some of that power for their own purposes.

Regulation, far from being the enemy of big business, is in fact welcomed and championed by it. The internet sales tax known as the Marketplace Fairness Act was supported by, the largest online retailer in the world. The reason why is simple: Amazon has the infrastructure and money to comply with the regulation, while its smaller competitors do not. It is nothing more than an attempt to preserve and protect the site’s power as an incumbent, while erecting barriers to entry for potential challengers. This is merely one example out of thousands where big business leverages government power for its own ends.

For too long, both political parties were guilty of propping up corporate interests, but now Republicans are changing, becoming more libertarian in philosophy and rejecting the idea of corporate welfare. This leaves Democrats in the awkward position of filling the role they have long ascribed to their opponents. A quick glance at the incumbent senators seeking reelection this cycle reveals the extent to which corporate interests pull the strings of establishment Democrats. Kay Hagan supported the Farm Bill, which spends nearly a billion dollars to support big agriculture. Mark Pryor supported the $700 billion Wall St. bailout known as TARP. Mark Udall sponsored a bill authorizing $2 billion in carve-outs for the manufacturing industry. All of these senators also supported the internet sales tax, which we have already seen benefits big companies at the expense of smaller ones.

Railing against the evils of big corporations was once a favorite pastime among young Democrats, and to a certain extent it still is. They never really had the moral high ground they thought they had, but at least they could point fingers at the Republicans for being guilty of cronyist practices. Now they don’t even have that comforting hypocrisy any more, as Republicans like Rand Paul, Ted Cruz, and Justin Amash embrace the individualist ethos that decries bailouts and back-room favoritism for powerful lobbyists.

Big corporations like General Electric and special interest firms like the ill-fated Solyndra enjoy the full support of the Democratic Party. In fact, practically all of Democrats’ policies under Obama have been aimed at helping the already powerful at the expense of the little guy. It has been Republicans who have championed individual rights not to be imprisoned indefinitely without trial, not to be killed by drones, not to be bullied by the IRS and not to be forced to buy products from big insurance companies that consumers neither need nor want.

Democrats refuse to cut even one thin dime of discretionary spending from any government program, but the vast majority of these programs do not benefit the poor or the infirm, they benefit corporations. The Affordable Care Act disproportionately punishes small business and individuals over large companies who have the resources and organization to cope with the new rules, the Obama administration has bailed out big banks and car companies alike rather than let them face the consequences of their own bad decisions. Writing for Real Clear Markets, economist Jeffrey Dorfman details a few more ways in which Democrats have been cozying up to corporate interests, and how they have now become the Party of Big Business. Democrats have even assumed the unlikely mantle of the Party of Big War, with Obama’s eagerness to use military force in Libya, Egypt and the narrowly averted U.S. involvement in Syria.

The point is that once people start paying attention, the Democratic Party is in danger of having a serious image problem. How will they be able to demonize Republicans as greedy, soulless, corporate tools, when their own policies embody the vices they claim to hate? Liberals can only run away from the facts for so long before public perception catches up with them. Once young people realize that they have been throwing their support behind politicians who push policies that are antithetical to their worldview, the Democratic Party could find itself as bereft of voters as it is of principles.