Corporate Welfare Or: How Both Parties Learn To Stop Worrying And Love Big Government

One of the enduring tropes of political journalism is to criticize the other side for behavior that’s as well-entrenched – if not perfected – on one’s own.

Such is the case with the Biden administration’s big push into national industrial policy – or what is sometimes called “crony capitalism” or “corporate welfare.” While it is undeniably true, as The Wall Street Journal’s Allysia Finley writes, that the current administration’s series of handouts, subsidies and other protectionist measures come with many progressive strings attached, such economic central planning has always required favored recipients to sing for their supper.

And it has always – always – been a bipartisan affair.

Finley writes:

Government help is never free, as semiconductor companies are learning. Chip makers lobbied Congress for enormous subsidies to build plants in the U.S., which they claimed would shore up supply chains and protect national security. Republicans joined Democrats last year in approving some $39 billion in direct financial aid, plus a 25% investment tax credit.

Commerce Secretary Gina Raimondo then conditioned the grants on companies implementing the administration’s social policy. According to new rules unveiled last month, chip makers receiving more than $150 million in federal grants will have to provide child care for their employees and guarantee “family-sustaining benefits that promote economic security and mobility,” including “paid leave and caregiving supports.”

There are many more conditions on the federal aid. Aid, by the way, the private sector aggressively lobbied for.

What makes this particular batch of subsidies irksome to those on the right is how it pushes corporations to push progressive policies in the workplace. 

Fair enough. But let’s never forget how the populist right pushed its own industrial policy – with strings attached that advanced its socio-political agenda:

In 2016 and 2017, Trump pressured the Ford Motor Co. F, +0.79% to cancel plans to open a car factory in Mexico. The Economist described Trump’s threats against the company as an “an absolute disgrace,” while the Washington Post columnist Sebastian Mallaby noted that, “The only thread of consistency is that he wants the world to know that he can destroy companies on a whim.”

Trump also pressured the air-conditioner manufacturer Carrier CARR, -0.86% not to move a plant to Mexico. In this case, however, Trump’s threats failed, even as he continued to claim credit for “saving” hundreds of U.S. jobs.

Similarly, in 2017, Trump boasted that he had convinced Foxconn 2354, -1.28% to invest $10 billion in Wisconsin and create thousands of jobs in exchange for tax breaks. These jobs have yet to materialize, and Foxconn recently announced that its plans had changed.

And that doesn’t include the tariff regime Trump instituted – and the Biden administration largely continued – that pushes higher costs on consumers while offering protection to a favored few.

GOP presidential hopeful Vivek Ramaswamy noted how closely related all this bad economic policy is:

Republican crony capitalism in the 2008 bailouts gave rise to left-wing crony capitalism in the guise of ESG in the decade that followed. Two sides of the same uniparty that merged corporate & state power to create a new demon that’s the real threat to liberty today.

Or, as the French philosopher and economist Frederic Bastiat wrote so long ago:

“Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on.”

True then. Still true today. And one of the few practices Team Red and Team Blue share in common.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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