Liberal bloggers uncomfortable with Left's closeness to Wall Street

[Originally posted at Beltway Confidential]

Have I touched a nerve with liberal blogger Matt Yglesias at the Center for American Progress?

The fact is that Yglesias's agenda -- support for Barack Obama's health-care mandates, subsidies, and regulation plus support for the Waxman-Markey climate bill, to name two items -- is also the agenda of the lobbyists for many big business. On financial regulation, I am willing to wager that whatever bill Obama signs will have the explicit (though not necessarily public) approval of Goldman Sachs.

Yglesias has conventional wisdom on his side -- most writers assume that progressives are the foes of Big Business, and that Big Business is the foe of government regulation. That makes it odd -- though flattering -- that he's repeatedly come after the theme of my books and columns: that Big Business lobbies for and profits from Big Government at the expense of consumers, competitors, and taxpayers.

Back in February, for instance, Yglesias pounced on a Washington Post story headlined "Wall Street shifting political contributions to Republicans." The campaign finance numbers underlying this news story, however, proved exactly my point, as I drew out in a blog post

They show that the Securities and Investment Industry, Wall Street, gave 63% of its money to Democrats, improving on the Democrats' majorities from the 2006 and 2008 cycle when Wall Street gave Dems 52% and 57% of campaign cash. In fact, the numbers for the 2010 cycle so far are the most one-sided numbers we've seen from Wall Street as far back as records go.

As gravy ... the top three Wall Street recipients are all Democrats, and 8 of the top 10 are Democrats.

Today, Yglesias's evidence contra my thesis is this Charlie Gasparino story, which Yglesias sums up thus:

Mitch McConnell and John Cornyn want finance executives to know that concern for their interests burns deep in the hearts of Senate Republicans.

And Yglesias concludes:

Of course if the Banksters have read Tim Carney’s book they’ll know that McConnell and Cornyn are only pretending to be looking out for their interests, and really Barack Obama is their best friend.

For the record, in my book I never called Barack Obama Wall Street's "best friend." I did call him "Barack O'Bailout." I also pointed out:

• Obama was, perhaps alone outside of the Bush administration, in position to block the bailout, but instead he assured its passage.
• Obama renominated with glowing praise the bailout's chief champion, Fed Chairman Ben Bernanke. He also promoted the No. 1 behind-the-scenes bailout baron, Tim Geithner.
• In March, Obama created a new bailout program called the Public-Private Investment Partnership, which used the Fed and the FDIC to bail out both banks and investors.
• Obama raised about a million dollars from Goldman Sachs employees and executives in 2008, the most any politician has raised from a single company since McCain-Feingold. That was more than Goldman employees, execs, and PACs gave to every single Republican running for President, Senate, and House, combined.
• Obama added a fourth installment to the AIG bailout Geithner and Bernanke had authored.
• Obama's campaign advisor and fundraiser Warren Buffett invested $5 billion in Goldman just before the bailout, and had earned $4 billion on that in just nine months. (Remember when Obama said "We need a President who sees government not as a tool to enrich well-connected friends and high-priced lobbyists."?)
• Obama's West Wing includes Goldman alumni or former consultants Rahm Emanuel, Larry Summers, and Tom Donilon. Treasury Chief of Staff Mark Patterson is a former Goldman lobbyist.
• Obama raised $14.8 million from Wall Street -- more than any candidate in history.

So Yglesias can try to weigh his evidence -- which here is based on a small excerpt of the way Charlie Gasparino describes a meeting -- against my evidence, which demonstrates a pattern Obama consistently favors bailouts and gets campaign funding from Wall Street (I've got plenty more evidence that didn't make the book). But snarkily caricaturing my argument in an effort to snidely dismiss it suggests weakness of argument -- and maybe some insecurity, too.

Big Business, Big Government, and Libertarian Populism

The Cato Institute has posted online a paper titled "Big Business, Big Government, and Libertarian Populism," which is really a distillation of my book event at Cato for Obamanomics.
Below is the video of this event, and here is a podcast I recorded afterwards.

BigGovernment.com review: An Advanced Course in Big Government in the Age of Obama

John O'Hara reviews Obamanomics over at Andrew Breitbart and Mike Flynn's BigGovernment.com.

Obamanomics reads like an encyclopedia of corporatism in the age of Obama....

Thoroughly researched with Carney’s typical muckraking fervor, Obamanomics shows that these behind-the-scenes alliances are often between players one would not expect to cooperate. In fact, allegiances are often the exact opposite of what politicians say and the media reports.

NY Times' Douthat: Lessons in Obamanomics

Ross Douthat, a conservative New York Times columnist, blogs today on Obamanomics:

The hand-in-glove relationship between a Democratic administration and certain precincts of corporate America is one of the major stories of the Obama era. And if you want to know why the Department of Energy has become a venture capital firm, or what happened to Barack Obama’s pledge to allow American consumers to buy their drugs from overseas, or why the health care bill looks, well, the way it looks, Carney’s book is a good place to start.

Carney is more stringently libertarian than I am — more anti-TARP, for instance, and more thoroughgoingly critical of the welfare state in general. But his kind of libertarian populism is a important counterweight to what’s been happening in Washington across the last twelve months. His analysis represents the cogent version of the inchoate angst that’s gripped the conservative base of late.

The Washington Toy Story

LewRockwell.com carried an excerpt over the weekend of Obamanomics, and my section that deals with the Consumer Product Safety Improvement Act:

And small craftsmen were threatened by the testing requirement. Every manufacturer, including grandpa in his woodshed, would need to submit its products to an accredited outside testing facility. This would be costly and burdensome. But written into the law was a provision that, while common sense, seriously favored mass-producers. Look at this guidance from the CPSIA:

If your products need to be tested, and they are materially identical and made in the same fashion with no change in assembly, equipment used, etc., then a single sample may be all that is necessary for testing purposes. A change in materials or design can be enough to alter testing results. [9]

So if you’re rolling 10,000 petroleum-based Barbies off an assembly line in Shanghai, you need test only one. If you’re making ten sets of children’s rosary beads to donate to the kids in your parish receiving their first communion, you also need to test one – unless these rosaries are unique, or if you made some at home, some at your office, and some while visiting your grandchildren. In those cases you need to get each one tested – not just each rosary, but each component: the little beads, the big beads, the crucifix, and the string.

Mattel was deploying the “Overhead Smash”: crowding out smaller competitors and potential start-ups by lobbying for stricter regulation.

On Russia Today

Here's a clip of me yesterday on Russia Today, discussing Obamanomics and bailouts.

Washington Times Review of Obamanomics

AG Gancarski reviews Obamanomics in the Washington Times:

And the biggest companies with the most lobbyists reap the benefits. This trend holds true for many sectors of the economy - big pharma, the insurance industry, king coal, big tobacco, the auto industry, agribusiness, the securities industry and so on - even as average Americans grapple with the realities of a deteriorating dollar, double-digit credit card interest rates, and houses with mortgages as underwater as a sunken ship. So it is that companies such as General Motors Corp., clinging to fiat bailout cash to survive, nonetheless kept their lobbyists employed even while pleading penury.

Obamanomics Excerpt: Obamanomics: General Electric wins big with White House

Today, the Examiner carries an excerpt from Chapter 10 of Obamanomics:

Days after Obama's inauguration, Jeff Immelt, CEO of General Electric, wrote to shareholders: "[W]e are going through more than a cycle. The global economy, and capitalism, will be 'reset' in several important ways.

"The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner."

General Electric is a sprawling, complex corporation with many diverse businesses. The company makes light bulbs and refrigerators, sure, but it also has a finance arm, a transportation arm, a health-care arm, a communications arm, and more. The above letter from Immelt reveals what these arms all have in common: They all reach out for government favors.

Washington Times "Hot Button" Column on Obamanomics

Amanda Carpenter at the Washington Times writes a daily "Hot Button" column. Today, she discusses Obamanomics:

"Obama strongly believes in government directing the economy," Mr. Carney said. "It's inevitable when government directs the economy lobbyists become more important, so whether he likes it or not, he's making them more important."

Review: Obamanomics Ties Obama to Big Business

Human Events runs its review today of Obamanomics:

Carney isn’t calling the new president corrupt. Instead, he’s warning Obama that “corporate-government intimacy is a breeding ground for scandal.”

Time and again Carney states his opposition to Obama’s legislative agenda without the sort of rancor one might expect from a critic of the new administration. He doesn’t think Obama is a socialist or someone who wants to harm the country. The president simply believes his approach is the right one. Meanwhile, major corporations see the benefits of Obamanomics -- more regulation and less competition for their services.

So what happens next? Obamanomics details a step-by-step approach to defeat the principles set in motion over the last year, like banning future bailouts and earmarks. Carney realizes not every step is feasible. Some won’t be politically popular while others might not be enough to thwart the changes being made to our government.

But they show hope for a different kind of change still exists.

Obamanomics defined: Big Government in service of Big Business

Today, the Examiner runs an excerpt of Obamanomics, Chapter 1:

Underlying Obamanomics are some basic economic facts and political realities. These are the Four Laws of Obamanomics, paired below with some of the lobbying strategies that exploit these laws.

1) During a legislative debate, whichever business has the best lobbyists is most likely to win the most favorable small print. Similarly, once a bill has passed, the business with the best lawyers and lobbyists will best be able to craft the regulations and learn how to game them. A big business, counting on this fact while lobbying for more government spending or control, is employing The Inside Game.

2) Regulation adds to overhead, and higher overhead crowds out smaller competitors and prevents startups from entering the industry. When corporations, knowing this, lobby for more regulation of their industry, I call this the Overhead Smash.

3) 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. When Big Business seeks to stultify the economy to hold back smaller competitors, I call it Gumming the Works.

4) Government regulation grants an air of legitimacy to businesses, boosting consumer confidence, often beyond what is warranted. This is The Confidence Game.

The Top Eight Winners of Obamanomics

Today is launch day for Obamanomics, and on Clusterstock, I've posted with my brother a slideshow of the Elite Eight -- the biggest winners in the world of taxes, regulations, mandates, handouts, and bailouts that is Obamanomics. If you're interested, please buy a book today.

The first review of Obamanomics

David J. Sanders, a columnist in Arkansas, wins the gold medal by publishing the first review of Obamanomics:

Obamanomics, of course, cuts against Washington’s most compelling narrative (which started during the campaign): Obama, the agent of hope and change vs. the powerful interests. But Carney reveals a president who on the one hand professes to protect the little guy, but on the other supports policies that punish innovation, hurt small business and run up trillions of dollars of government debt, while rewarding his friends at Goldman Sachs, GE (a company that earned its own chapter), Pfizer and the United Auto Workers.