Crony Capitalists Seek Protection

Mitch McConnell, Senate Republican leader, confessed to big business bureaucrats that he and other Establishment Republicans want to remain their link to government money and favors. According to a Wall Street Journal story (December 16), he asked them to open their wallets lest his kind be overwhelmed — not by Democrats, but by those smelly little Tea Party conservatives — the real threats to the government spending and regulations by which big business thrives.

The confession was almost that forthright: “said one person at the McConnell fundraiser, held at a Capitol Hill townhouse. ‘The main message he was pushing was: Get involved, mainly to teach those who are primarying incumbents that it is not helpful to run against incumbents who are champions for the industry.’”

McConnell is just one of the dozen Republican Establishment senators who are facing challenges by conservatives, who are backed by organizations such as the Club for Growth and the several pro-life organizations. These challengers, always underfunded by huge margins, nevertheless frighten the well-heeled likes of McConnell because they bring to politics a source of votes that money can’t buy: credible commitment to substance. According to John Boehner, House Republican speaker and a stalwart of that Establishment, such challengers or merely the prospect that they might appear, have convinced many Republican congressmen to pay more attention to issues than to the Establishment’s priorities.

iStock_000010508773SmallMoney is the Establishment’s main weapon against challengers with small bank accounts but big followings based on issues. And indeed, big business is stepping up its defense of threatened Republican Establishmentarians.

Big money is forthcoming from classic sources for classic reasons. The Journal story continues: “The U.S. Chamber of Commerce and other business groups have been stepping in to help business-friendly Republicans aligned with the GOP leadership… a sign of worries that tea party-aligned candidates might try to eliminate tax breaks and spending favored by businesses.”

The bargain is classic, and classically corrupt: Politicians vote taxpayer money to cronies, who then recycle part of the money back to the politicians. The corruption is especially evident in McConnell’s case. He made his confession and plea to representatives of the defense industry, who told the Journal’s reporter that their cooperation with the Establishment against the conservatives was all about mutual support for national defense: more money means more defense. But the corruption inherent in such back-scratching bargains is especially obvious and noxious in the case of national defense.

Consider: In 2013, the military budget is an inflation-adjusted $642 billion. In 1988, in the same dollars, it was $515 billion. Yet whereas in 1988 we had an army of twenty divisions, today we have one of ten “division equivalents” – barely able to handle insurgents armed with improvised weapons. Back then we had a six hundred ship navy. Now, the US Navy has 280. Today, we have half the fighter planes of a quarter century ago, and their average age is over a quarter century. In short, the Defense industry is taking more taxpayer money to the bank than ever while delivering far less than half the product.

Industry is not nearly so much to blame for this as are the politicians that write its orders and sign its checks. Rich corporations take money on the easiest terms, as naturally as do poor welfare recipients. Corporate welfare, crony capitalism, is as corrupting as any other kind of welfare. But it is more deadly to America, especially when the cronies on both sides of the table are dealing with military matters.

The mutual defense pact between big government and big business — crony capitalism — is by no means the Republican Establishment’s sole responsibility. In fact the Democratic Party in its entirety, openly and on principle, is all about what it calls “private-public partnership.” The party itself consists of interest groups that are funded by the government and which in turn fund the politicians who run the government. This is the “interest-group Liberalism” that has become the corrupt norm in American public life. Few challenge it.

The Republican Establishment is significant because it — people like McConnell, John Boehner, Karl Rove, etc. — is the front line of defense against those few who do challenge it, namely the conservative issue groups and the Tea Parties.

Their challenge is forcing such as McConnell, Boehner, and Rove to court their crony capitalists more brazenly than ever. The protestations of their own conservatism (“ain’t nobody here but us conservatives”) with which they try covering their courting are becoming funny. My favorite is a Wall Street Journal editorial (Oct. 10 2013) that chastises conservatives for distinguishing themselves from “the GOP establishment as if there still is such a thing.”

It calls to mind images of Mafia dons caught in the notorious Appalachin, NY conclave of 1957 swearing to Congressional investigators: “there is no such thing as the Mafia.” Sure.

Angelo M. Codevilla is professor emeritus of international relations at Boston University. He served as a U.S. Senate Staff member dealing with oversight of the intelligence services. His new book Peace Among Ourselves and With All Nations was published by Hoover Institution Press.

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Comments

  1. gabe says

    So why do we continue to allow corporations to make political donations.
    Yes, I understand why corporations have a certain “personhood” – without this construct no commerce Clause cases could have been adjudicated. However, from such a construct, convenient though it may be for certain economic matters, it does not follow that “political rights / responsibilities are also granted – nor should they.

    Time to amend the US Const to cordon off corporate “electioneering.

    take care
    gabe

    • Lhogan says

      Gabe you ask why do we continue to allow corporations to make political donations…Without defending or endorsing the corruption Codevilla recognizes my answer is Why do we allow Unions to do the same thing?
      MONEY, that why. “It’s Time to amend the US Const to cordon off” ALL electioneering by ANY organization and restrict support to individuals only!
      BTW – I’ve been writing, calling and complaining about this graft and corruption to my Senators and Representative since the lat 1980′s. Have you?

      • HC68 says

        All that does it channel the organization money through individuals in complicated shell games, it still gets in. You really _can’t_ keep the money out, it’s better to keep it open, restricting the means of giving money so that the sources are visible to the voters.

      • gabe says

        Yep, in fact i put together a draft amendment that does precisely that – only individual US CITIZENS may make conntributions – no corporations, no unions, no think tanks and Sorry Obama, no foreigners!

    • David Pittelli says

      The New York Times and NBC are corporations. Why do we let them tailor the news to fit their ideological preferences? Until recently GE owned NBC; why do we allow corporations to buy up media companies so they can bias the news? If a corporation can buy a TV network or a newspaper, surely it can launch a TV network or a newspaper. And if a corporation can mail out a newspaper, for subscription or for free, and include a flier taking a particular ideological and partisan stance, why can’t the corporation just mail the flier? And if it can mail a newspaper with a voting guide, but not a standalone voting guide, which office of the government will be empowered and entrusted to decide what’s a “legitimate” educational or news source which can include such a guide? Do you not see any problems with such a power in the hands of government?

      • Lhogan says

        I have the same draft and have sent it to my reps in government. The money is much less likely to be funneled in through anyone if there is full disclosure of who gives the money. Full disclosure posted on a website.
        In addition I stipulate that the candidates themselves must solicit and receive the money, again with full disclosur of who they are soliciting for contributions.

  2. Howard says

    Don’t worry, though; even when the Establishment controls the primaries, we will no doubt be subsequently assured that this is the most crucial period in American history, and the Republic — or even civilization itself — will be threatened if we do not “hold our noses and vote Republican”. We get the same song and dance every election. Then we wonder why nothing ever improves.

    The Republican Establishment is willing to play chicken with the party and with the country. They were willing to get Obama for two terms as long as they got to suppress real conservative options. As long as conservatives continue to respond by being timid little sheep, the Republican Party and the country will continue to drift farther away from sanity.

  3. Devin Watkins says

    @Gabe
    The problem isn’t corporations giving money, the problem is the benefits that corporations can get out of politicians. Now we will always need some defense spending, but most of the other special benefits or subsidies should be eliminated, then politicians cant demand money in exchange. Corporations are just groups of people working together, groups should be able to give money just as much as individuals. I ask you are you going to outlaw media companies from supporting politicians? Do you really want to leave in the hands of the NYT, ABC,CBS as the only corporations that can spend money helping politicians?

    • gabe says

      Devin:

      You pose a very good question.
      My proposal concerns only monetary contributions to electoral campaigns and would cover money given to either candidates or political parties or both.
      You are correct that the media would be able to continue to wage ideological war against the right.
      However, under my scheme ANY Citizen may do likewise – so for example, I could produce pamphlets, media, etc and / or could give $100 million to my candidate or party to do with as they please. Hopefully, this would counterbalance the media moguls.
      Is it perfect – no – but i believe it would get corporations out of the legislature.

      take care
      gabe

    • gabe says

      aez:

      ONLY individual US Citizens may participate – no unions, no corporations, no CHURCHES (taht is right – only INDIVIDUAL US Citizens!

      • b.a.freeman says

        rather than trying to limit contributions to individuals, i think that it would be better to let any person or organization contribute to any political campaign, with the proviso that any *organization* must open its books to public scrutiny. an organization that hid anything would have its officers and board of directors held *personally* liable, and the charges in such cases would be Federal felonies subject to 10-year-minimum sentences. if an organization making political contributions gets *any* money from any other organization, such organizations must open their books completely as well, subject to the same penalties for non-compliance. were the State trustworthy, i would say that the individual’s name be made public as well, but Governments of every stripe have a well-documented track record of hunting down and murdering dissidents, so that’s out. there is the problem of individuals fronting for organizations, though, so that should be a crime as well; since there is no shortage of gullible individuals, that should be a lesser crime, with no minimum sentence. those who convince individuals to commit this crime, OTOH, should be subject to the ten-year minimum sentence.

        the recipients of campaign donations should be made to make public all donations from organizations, and every candidate should have to make public all organizations that support him.

        finally, an organization that conducts its own campaign for or against a candidate, without input or approval from the candidate, should be judged on how much of its money it spends on such a campaign. should the amount spent on a given campaign exceed a threshold amount (perhaps 20% of its total income), it becomes doubtful that the organization has any raison d’être other than the campaign, and it should be subject to the same rules.

        of course, this is just me thinking out loud, and i’m none too smart; i’m sure a good politico could work his crooked magic in spite of any rules i think of. campaign finance is, however, something that desperately needs to be revisited, so i hope we start discussing it again.

        • gabe says

          The problem with these suggestions is that it allows the Government to sneak its whole body under the tent.

          Much better to simply declare that corporations , unions, any aggregate of persons cannot contribute to any electoral campaign.
          Otherwise we will have the most massive fishing expeditions by the government that could be imagined. If the IRS scandals are bad, just picture what would happen with the suggestions you make.

  4. theBuckWheat says

    For every crony capitalist, there must be a corresponding crony in government. Where you see a crony, there is always a cronee. While the crony capitalist is just doing his job to maximize his shareholder value, his co-crony (the cronee) in government is violating his public duties and maybe even the law itself. Moreover, cronies need each other, but for different reasons. It is just corruption and it always costs the taxpayers somehow .

  5. fiona says

    My local Tea Party is researching to determine who contributes to the National Chamber of Commerce and to boycott those corporations who are members. Try looking at the Senate Conservatives fund and the Campaign for Primary Accountability. I resigned from the Republican party after years as a precinct chair because I no longer believe that the Institutional Republicans will ever allow the party to express the Tea Party ideology. Third party is the only effective path – I only hope the Republic survives long enough.

  6. DH says

    ‘Time to amend the US Const to cordon off corporate “electioneering”‘

    Why is it that opponents of corruption due to excess government power so often propose more government power as the solution? If we’re going to amend the Constitution, we should amend it to scale back the scope of government, not to forcibly restrict free speech rights. If the state has no goodies to hand out or regulations that need to be fought, the incentive for “corporate electioneering” will dry up.

    • gabe says

      No one is advocating restricting free speech rights for INDIVIDUAL US CITIZENS. My contention is that Corporations should not be entitled to political rights that are attendant upon US Citizenship simply because, as a legal convenience, they are considered “citizens.”
      My proposal would allow unlimited contributions by INDIVIDUAL US Citizens only.

      Amending the const to limit government is pointless – it was origianlly so designed and look where our Blck Rober friends have taken us.

  7. SGT Ted says

    What the GOP and Dems are doing isn’t “business friendly”. It is political and corporate corruption Banana Republic Style. The GOP want to not be accountable to voters anymore, but in service to private corporate donors anti-free market desires.

  8. CORNFUZED says

    GENTLEMEN, TAKE IT TO THE CONCLUSION, YOU CANNOT CONTRIBUTE TO A PERSON YOU CANNOT VOTE FOR. IF HE IS MY LOCAL REPRESENTATIVE – WHY SHOULD ANYONE OUTSIDE MY LOCAL BE ABLE TO INFLUENCE HIM??

  9. Hank Bradley says

    “In 2013, the military budget is an inflation-adjusted $642 billion. In 1988, in the same dollars, it was $515 billion. Yet whereas in 1988 we had an army of twenty divisions, today we have one of ten “division equivalents” – barely able to handle insurgents armed with improvised weapons. Back then we had a six hundred ship navy. Now, the US Navy has 280.”

    Gentlemen: 1988 was the year before the Soviet collapse and the “peace dividend”, and a greatly reduced Defense budget – diverted to domestic vote-buying more or less. Those divisions and ships had accumulated during Cold War spending, but the Great and the Good now knew that they’d never be needed again.

    The next responsible Administration will need to seriously reappraise this situation.

  10. says

    Parroting the misguided phrase spoken from ignorance — crony capitalism — fails to do service to anyone. The horrible, wrong label — crony capitalism — implies there is something wrong with capitalism, when never there is.

    The problems are Crony Politics, Crony Governance and Crony Regulatory Capture. The problem rests in politics and governance rather than people in pursuit providing wanted products efficiently.

    Capitalism means living by using capital in pursuit of ongoing exchange of buying power. There is no other kind of capitalism (see my comment above).

    When exchange is not hampered by artificial restriction of supply, nor inflated by artificial giving of buying power, the righteousness of a free market prevails. Only through markets free from Crony Politics, Crony Governance and Crony Regulatory Capture can all benefit owing to efficiency.

  11. jack adams says

    The fastest way to end this is to end pensions for Congress. They should not rely on the taxpayer for their pensions, which are obscene. in their largesse. Make them get a real job for most of their working lives.

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