Phony Talk of Crony Capitalism

In case you haven't noticed, leading conservatives -- including Sarah Palin -- have been talking a lot lately about "crony capitalism." This phrase started turning up well before the hyped up Solyndra scandal and is now heard even more often.

A debate over the cozy ties between government and corporations is long overdue. Unfortunately, that is not the debate we are likely to get from the likes of Ron Paul and Sarah Palin.

While these leaders are generally on the right track in attacking the "corporate welfare" that government doles out to business, mostly in the form of tax subsidies, such perks represent only a small part of the crony capitalism problem. Get rid of every corporate tax break or no-bid contract and we'd still have undue influence of business over government. Why? Because of the flood of money into politics -- money that allows corporations to exercise infinitely more clout over policy outcomes than ordinary voters.

How much money are we talking about? According to Opensecrets.org, business now spends over $2 billion a year lobbying policymakers in Washington and a huge fortune as well on election campaigns.

You can see the insidious ways in which this clout plays out in one area after the other, with Wall Street's successful campaign to water down financial regulation starting in the 1990s as the most dramatic example. That campaign continued even after the financial crisis. According to OpenSecrets.org, the financial industry has spent $571 million on lobbying since the start of 2009 and $174 million on campaign donations. The healthcare industry has spent even more to get its way -- about $1.3 billon on lobbying since Obama took office, with a good chunk of that fighting the White House's reform effort.

Thanks to the Supreme Court decision in Citizens United, this problem is only getting worse. But guess what? Those supposedly most concerned about "crony capitalism" are largely uninterested in getting money out of politics. Trying finding anything about this issue on Michele Bachmann's campaign website or Ron Paul's. You won't.

The truth is that there is an inherent tension between capitalism and democracy. A free market allows individuals and corporations to amass huge amounts of wealth which can easily be deployed to influence politics. Supreme Court Justice Louis D. Brandeis famously said that "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both."

That's a rather elementary insight, but not one that most conservatives are ready to entertain. Which explains why they also won't entertain a whole policy agenda aimed at addressing this tension -- whether it's campaign finance reform, expansion of public media, stricter limits on lobbying, or policies to expand the voting public as an antidote to private power. Indeed, the right has a long history of fighting exactly those reforms most needed to stop business interests from taking over public institutions.

Let's be glad some politicians are talking about crony capitalism. Let's also remember what a real conversation on this topic might look like.