A media blind-spot on corporate-government coziness 

I've noticed over the last few years that when most of the media writes about corporate-government coziness, they often see only two types of policy decisions that help Big Business:

1) Government not raising taxes or imposing a regulation (call it Laissez-Faire), and

2) Government awarding a contract.

But there are plenty of other ways government helps big business. Some examples:

3) Requiring businesses or people to buy your product, or passing regulations that drive business your way

4) Providing tax credits that subsidize what you're selling

5) Passing regulations that crush smaller competitors

One case in point today: Tory Newmyer's Fortune piece on GE CEO Jeff Immelt. It's a good article that draws out the flimsy safeguards in place against Immelt's using his "jobs czar" position to push pro-GE policy decisions. But Newmyer's list of pro-GE policy decisions strikes me as incomplete and unrepresentative.

As issues on which GE lobbies, he lists "Commercial Advertisement Loudness Mitigation Act, the Iran Sanctions Enabling Act," and "fights over health care and financial reform and a multibillion-dollar battle with Pratt & Whitney over a military jet engine." The only actual GE policy position mentioned in the piece is the company's push for the defense contract -- where Obama and GE were on opposite sides.

In a piece about GE's influence within the Obama administration, I would have mentioned policy matters where the company and the administration agree. For instance, cap-and-trade climate-change regulations, bank bailouts, subsidies for research on embryonic stem cells, subsidies for wind power, subsidies for smart-grid, subsidies for exports, preserving tax breaks for most U.S. manufacturers while ending them for big oil companies, subsidies for high-speed rail, subsidies for hospitals -- I could go on.

We see a similar too-narrow approach in this Politico piece on what industry got from ObamaCare. Here's what the reporter writes:

powerful groups — like hospitals and the drug industry — endorsed the legislation, or at least agreed to hold their fire. Some of them did get rewarded for their help, by being spared from deeper cuts or other legislation they’ve opposed for years.

Again, this is woefully incomplete, leaving the impression that industry lobbying efforts are simply about trying to be left alone. The powerful hospital and doctor lobbies were rewarded with subsidies and mandates that force people to pay these industries. And the drug industry -- man, they got tons of positive gains out of this deal: 12-year government-granted monopolies on biotech drugs, subsidies for drugs, the requirement that state Medicaid programs cover drugs, prohibiting consumers from using HSAs for over-the-counter drugs, thus driving more business to more expensive prescription drugs, an individual mandate that will require people to buy prescription drug insurance, an employer mandate that will require employers to provide prescription drug insurance, and more.
The Politico piece is typical of articles describing what industry got from the bill. It reflects, I imagine, a belief that industry lobbying is mostly about left alone, and that activist government is always at odds with industry wishes. This belief, of course, is dead wrong.
One negative effect of this imbalance is that businesses lobbying for Big Government favors tend to get ignored by most media outlets. To the extent business lobbying is seen as undue influence, and thus bad press for the business, the media is creating even more incentive for business to lobby for Big Government favors -- and the drug industry and GE have clearly taken this lesson to heart.

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Timothy P. Carney

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Tuesday, Nov 20, 2018


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