Indeed, Cantor’s constituency was as much corporate America as it was Virginia voters. Business was counting on his support to push through reauthorization of the Export‐Import Bank, long known as “Boeing’s Bank” for the extensive benefits lavished on one company; extension of terrorism risk insurance, which transfers financial liability for loss from firms to taxpayers; and preservation of Fannie Mae and Freddie Mac, which nearly wrecked the economy while subsidizing homeowners, builders, and lenders.
Cantor’s loss, said the Washington Post, was “bad news for big business.” The New York Times observed that Cantor was “a powerful ally of business big and small, from giants like Boeing to the many independently owned manufacturers and wholesalers that rely on the federal government for financial support.” He was also “one of Wall Street’s most reliable benefactors in Congress.” His opponent, an economics professor, targeted Cantor’s crony politics.
In practice Cantor’s loss changes little. His replacement as House Majority Leader, California’s Keven McCarthy, appears no less political than Cantor. McCarthy also has relied on Wall Street for fundraising. However, while previously voting to reauthorize the bank, he recently said he would prefer to let the institution’s charter expire. He once owned a sandwich shop, and therefore understands the problems of small business.
Suffering near political death was Sen. Thad Cochran (R‐Miss.), who trailed a Tea Party‐backed state senator in the initial primary vote and narrowly won the runoff, apparently with Democratic support. Widely viewed as the “king of pork,” Cochran relied on his ability to raid the Treasury to pay off fellow Mississippians. Noted the New York Times, the one‐time Appropriations Committee chairman and several predecessors all used “their perches on the powerful Appropriations Committees of their chambers to shower their impoverished state with federal funds.”
Cochran also has been a regular supporter of business subsidies. Which is why corporate America returned the favor. Economic elites surprised by Cantor’s loss “are moving quickly to ensure that Mr. Cochran does not meet the same fate,” reported the Times. The incumbent Senate Republican raised $800,000 at just one fund‐raiser targeting corporate lobbyists. Big firms like General Atomics and Raytheon have given generously to groups backing Cochran.
It long has been evident that the greatest enemies of capitalism are the capitalists. Even Adam Smith, the famed author of The Wealth of Nations and great proponent of free markets, warned that businessmen oft gathered together to conspire against the public for their own gain. Today it is hard for them to resist doing so. When “everyone” is doing it, who wants to be left out? Especially with boards and shareholders to satisfy.
Of course, business is not alone in shoving its snout into the federal trough. Big Labor and many other influential interests do so as well. However, the disjunction of simultaneously praising and undermining the free market is particularly jarring when coming from businessmen.
Alas, our entire political system has been corrupted. In April Sen. Mike Lee (R‐Utah) gave a thoughtful speech warning of “America’s crisis of crony capitalism, corporate welfare, and political privilege.” The victims are every day folks, “the poor and middle class” excluded by government “from earning their success on a level playing field.”
No wonder, then, Americans’ ever greater frustration with politics. Blowback is coming as antagonism grows towards those who treat the federal Treasury as a piggy bank for themselves and their supporters. Moreover, as Cantor dramatically discovered, discontent with the politics of privilege may be as strong on the right as on the left. Explained the Times: “Beyond their priorities in Congress, what has unsettled business executives is what they sense as a growing anger over the ‘corporate welfare’ and ‘crony capitalism’ among the many associated with the Tea Party.”
Anger is the appropriate emotion. Who is the better candidate in any particular race is up to the voters in that district or state. But citizens everywhere should be frustrated with a government driven by interest groups where business leaders who actively subvert the market economy.
The problem is not just the money—roughly $100 billion a year for corporate welfare, for instance. Also disturbing is the message government is sending to all Americans. The way to rise and prosper, to expand one’s business and increase one’s income, is to seize control of the State to loot your neighbors. Gaining wealth by working hard is, well, hard work. It is so much better to hire a lobbyist and whisper sweet nothings in legislators’ ears. No heavy lifting there.
Moreover, the illusion of consent cannot hide the dubious moral principles these players rely upon. If government has as purpose, it is to advance particularly important and genuinely collective interests which cannot be achieved privately. Taking people’s earnings for anything less differs little from theft. Sadly, most of today’s vast transfer state looks like a complex of stolen goods.
Eric Cantor’s defeat is a useful reminder to the political class that even they are ultimately accountable to the people. Only by sharing that message widely is there a chance of rolling back the rampant political privilege and cronyism which dominates Washington today.