The conservative fight against crony capitalism received a boost last Tuesday, when the chairman of the House Financial Services Committee stood before a Heritage Foundation crowd and became the latest, and perhaps most influential, Republican politician to take specific aim at the Export-Import Bank. Rep. Jeb Hensarling (R-Texas) devoted nearly half his speech to articulating the argument against the obscure federal institution that subsidizes American exports, while still making time to rail against the farm bill, Fannie Mae and Freddie Mac, and recent bailouts for GM and Wall Street. As the chairman of the committee responsible for reauthorizing the Export-Import Bank before its charter expires at the end of September, and as a potential contender for the Speakership should John Boehner relinquish the gavel after the midterm elections, Hensarling’s words carry significant weight.
Tim Carney, who has become the drum major leading the march against crony capitalism, foresees the potential for the GOP to turn the 2014 midterms into a referendum on Democratic corporatism, and a demonstration that conservatives are pro-market, not pro-business. Pete Spiliakos, however, has been skeptical. “That is fine as far as it goes,” he says, “to portray the center-left as wanting to take taxes with one hand and give out subsidies to the connected with the other, but it is starting your presentation by answering a question the public doesn’t seem to be asking.” Pete agrees that corporations that have co-opted the feds into giving them unfair subsidies should be kicked off corporate welfare, but doesn’t think such proposals “amount to much absent a positive program that directly impacts people who are near the median income or who are economically struggling,” at least politically speaking. He followed up on those comments last week, writing, ”Cutting crony capitalism has to be a means to an end rather than an end in itself. If the purpose of cutting crony capitalism is to free up money to cut the top marginal tax rates on high-earners, then conservatives aren’t going to seem any less pro-rich for wanting to cut the Export-Import Bank and subsidies to green energy companies.”
So what is crony capitalism, politically speaking? Is it a welcome restorative for a party pegged as being in the pockets of big business? Or a worthy policy initiative albeit with little public resonance? Perhaps the best answer came a year ago at the Heritage Foundation, when Sen. Mike Lee was delivering the outline of his reform agenda. Lee said:
The first step in a true conservative reform agenda must be to end this kind of preferential policymaking. Beyond simply being the right thing to do, it is a pre-requisite for earning the moral authority and political credibility to do anything else.
Why should the American people trust our ideas about middle-class entitlements… when we’re still propping up big banks?
“A pre-requisite for earning the moral authority and political credibility to do anything else.” In his latest post, Pete worried that “the crony capitalism strategy treats the perception of conservatives as being pro-rich as primarily a problem of resentment. People resent the rich for getting too much unfairly, and so conservatives must target the undeserving rich.” He is right, of course, that an actual appeal to middle- and working-class voters will have to be founded on policies that address their needs. But voters aren’t policy analysts, ready to parse a tax proposal to see how it scores. Republicans are (rightfully) in a place of very low trust with most Americans, having parroted the same set of supply-side solutions with a variety of weak attempts at rebranding. To put it somewhat dramatically, putting General Electric’s head on a spike doesn’t have to be, and shouldn’t be, about slaking the perceived bloodlust of a resentful mob. Instead, it can be as simple as demonstrating loyalty to a prospective new employer by offering up the old one.
A substantive agenda will still have to be offered to middle-class Americans, and good work on that has been freshly compiled here. But first, voters will have to have a reason to trust that this time is different, and their best interests really are at the heart of the new proposals.