D. Dowd Muska


‘Pro-Business’ ≠ Pro-Market

August 13, 2015

It’s probably the most specious weapon in the arsenal of “progressive” talking points.

Leftists monotonously aver that the for-profit community -- businesses small and large, entire industries, and the trade associations that represent them -- reflexively favor the free market. To entrepreneurs, executives, and investors, it is claimed, unfettered capitalism is the natural order, and all lobbying and electioneering must be focused on cutting taxes, relaxing regulations, and reducing government expenditures.

The charge is a convenient tool for rallying activists and motivating voters. But to anyone with even a cursory familiarity with policy and politics, it’s preposterous.

Consider “Utahns for Responsible Transportation Investments,” a newly formed organization that The Salt Lake Tribune reported is pushing for a sales-tax hike to funnel additional revenue to the Utah Transit Authority and “cities and counties for local roads.” Headed by the Salt Lake Chamber’s Lane Beattie and Questar Corporation honcho Ron Jibson, the group believes that “investing today will save taxpayer dollars tomorrow.”

Sigh. If there’s anything American transportation/infrastructure does not need, it’s more taxpayer subsidies. Smarter spending, competitive contracting, deregulation, privatization, and reality-based compensation for transit employees are just a few of the non-revenue reform options. But again and again, business interests are snookered into endorsing greater “investment.”

In May, Michigan voters voted down -- by a ratio of four to one -- a plan to increase the state’s sales tax, gasoline tax, and auto-registration fees to raise “additional money for roads and other transportation purposes.” The Small Business Association of Michigan, Detroit Regional Chamber, and Business Leaders for Michigan all backed it. The Michigan Chamber of Commerce didn’t -- prescience, perhaps? -- but it has endorsed a legislative proposal to nearly double the Wolverine State’s fuel taxes, and index the levies to inflation. The group’s general counsel and senior vice president for business advocacy is “confident that leaders in the House and Senate can work together to … enact a final solution to Michigan’s road funding crisis before Labor Day.”

Subsidized stadiums, dodgy bond measures, boosting expenditures on government schools -- it’s tough to argue with supply-side economist Stephen Moore’s conclusion that “thanks to an astonishing political transformation, many chambers of commerce on the state and local level” have become “lobbyists for big government.” The Mises Institute’s Ryan McMaken goes further, writing that chambers “are in the game of socializing their costs and privatizing their profits. Naturally, these groups … often enthusiastically support statewide income taxes or sales taxes that will cost the larger population plenty.”

The all-time champion of business-lobbying stupidity took place in the Nutmeg State, nearly a quarter-century ago. In 1991, Connecticut faced a huge budget gap, the result of overspending during the Reagan boom. When fiscal inevitability struck, a slim majority of Democrats and Republicans decided that the enactment of a broad-based income tax was needed. The president of the Connecticut Business and Industry Association (CBIA) agreed, calling the levy “an honest approach to solving the state’s problems.”

Since the income tax’s imposition, Connecticut’s economic performance has been dismal. Residents are leaving, and late last year the governor’s top budget bureaucrat admitted that the state had “entered into a period of permanent fiscal crisis.” Nonetheless, the CBIA refuses to admit that its advocacy for the tax was asinine.

At the federal level, the dysfunction is no different. The U.S. Chamber of Commerce favors a higher federal gasoline tax. And it is lobbying for renewal of the Export-Import Bank’s lending authority. Another unwanted legacy of the New Deal, U.S. Rep. Jeb Hensarling (R-TX) accurately described the institution as “a small-scale example of a larger and more dangerous threat: the shrinking of the free-market economy and the rise of a progressive welfare state -- with its attendant cronyism, public-private partnerships, and spreading government economic controls.” But the chamber’s a fan of the bank. It’s demanding reauthorization, based on the dubious notion that doing so would “foster “America’s competitiveness, job creation and growth.”

Looking backward, the chamber embraced both Bill Clinton’s and Barack Obama’s “stimulus” packages. (The former died in Congress, the latter became law.) Its treatment of Ron Paul, a reliable enemy of crony capitalism, was egregious. The chamber’s congressional scorecard penalized the former congressman for voting against corporatist legislation. More recently, the organization has aided establishment-leaning Republicans who faced primary challenges from tea-party candidates.

The National Federation of Independent Business and its state affiliates are exceptions. But generally, the business community is a submissive and unreliable ally in the campaign against unlimited government. Believe it or not, moonbats, “corporate power” often takes your side.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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