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Lunch » Tags » Book » Reviews » Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses

Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses

1 rating: 5.0

A book by Timothy P. Carney

Obama Is Making You Poorer—But Who’s Getting Rich?Goldman Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack Obama was supposed to chase from the temple—are profiting handsomely from Obama’s … see full wiki

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Author: Timothy P. Carney

Publisher: Regnery Press

1 review about Obamanomics: How Barack Obama Is Bankrupting...

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A Case Study in Crony Capitalism

Mar 26, 2010

by georgepwood
posted in Cafe Libri: Reviewing Books & More

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One of the most tired clichés in American political discourse is that Republicans are shills for Big Business while Democrats are tireless advocates for the Average Person. The healthcare legislation President Obama recently signed into law proves the falsity of that cliché, for the legislation is a federal mandate requiring the Average Person to buy health insurance from - ahem - Big Insurance, one of the larger subsets of Big Business. In other words, Democrats have just done what they and others routinely accuse the Republicans of doing.

The cliché about Republicans is false, then, not because Republicans don't lobby for Big Business but because Democrats do it too, albeit for the benefit of different businesses. In other words, there is Bushonomics, and now there is Obamanomics. Neither is good for the Average Guy. Both are inherently corrupting of our nation's politics.

Timothy P. Carney is lobbying editor and columnist for the Washington Examiner, as well as a protégé of the late paleoconservative journalist Robert Novak. He is a political independent with a long libertarian streak and an axe to grind against crony capitalists everywhere. Obamanomics is a muckraking expose of crony capitalism in the Obama administration, written before the president signed the health care legislation into law. One wonders whether a revised edition is in the works. He is rightly critical of Obama, although fair being fair, he points out that many of Obama's policies are merely continuations of and expansions upon Bush's policies. TARP anyone?

For me, what is most valuable about the book is not the specific examples of Obamanomics Carney reports on but the strategy and outcomes of crony capitalism in general. These can be applied uniformly to both Bush and Obama administrations, although since Obama is the current president, he's also the current target of critique.

Carney writes: "Obamanomics is the political strategy of partnering government with the biggest businesses in order to create new regulations, taxes, and subsidies." He goes on: "The economic law underlying Obamanomics - opaque to most journalists and contrary to conventional wisdom - is this: increased government control centralizes industries and favors the biggest businesses." Underlying Obamanomics are "Four Laws":

1. The Inside Game: "During a legislative debate, whichever business has the best lobbyists is most likely to win the most favorable small print."
2. Overhead Smash: "Regulation adds to overhead, and higher overhead crowds out smaller competitors and prevents startups from entering the industry."
3. Gumming Up the Works: "Bigger companies are often saddled by inertia, meaning robust competition is a threat. Adopting regulations that stultify the economy is the equivalent of raising the basketball hoop to twenty feet at half-time: it protects the lead of whichever team is ahead."
4. The Confidence Game: "Government regulation grants an air of legitimacy to businesses, boosting consumer confidence, often beyond what is warranted."

Alongside these laws are ancillary tactics, such as Making an Offer You Can't Refuse, "when government requires customers to buy certain products," and Subsidy Sucking, in which government taxes some to subsidize others.

In the current partisan atmosphere, I'm sure many Republicans will cheer Carney merely because he's against Obama's policies, while many Democrats will be against him for the same reason. That's too bad. Carney's book, aimed squarely at Obama's crony capitalism, is a primer in how government favors some businesses over their competitors, at the expense of ordinary citizens. The principles underlying Carney's critique could be applied with equal force to many of Bush's policies.

In other words, crony capitalism is bipartisan, even if Obama is currently its regnant practitioner.

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