"I happen to believe in the people and believe that the people are supposed to be dominant in our society. That they, not government, are to have control of their own affairs to the greatest extent possible with an orderly society." - Ronald Reagan

Big business, big government.

Posted: July 6th, 2009 | Author: | Filed under: General | No Comments »

The Republicans are often branded the party of big business.  As the narrative goes free markets allow business to run roughshod over the interests of individuals.  Even if one accepts that maxim – and I don’t – it ignores the reality that big government often favours big business even more effectively than a free market.

Consider, for example, the Yahoo! data center coming to Lockport, which is being heralded as a potential “re-boot” of the jobs market in the region.  To be sure, a high profile internet company could potentially attract both jobs and talented applicants to the region.  The cost of attracting them?  A complete sales tax abatement, no property taxes for ten years and reduced taxes for the next ten, and a sweetheart deal from the power authority projected to save in excess of a hundred million in the next fifteen years.

Every tax is an opportunity for favouritism.  Ever regulation a barrier to entry.  Large businesses know this and often use it to their advantage.  Is it more likely Philip Morris supported the recent tobacco out of concern for consumers, or because the advertising restrictions favour the incumbent market leader (i.e. themselves)?  Is it more likely Walmart is backing an employer mandate out of concern for their employees, or because they expect economy of scale is in their advantage?

Even when passed with the best of intentions, legislation passed in haste can have unintended and often disastrous consequences that disparately favour entrenched or dominant companies.  The Consumer Product Safety Improvement Safety Act is a prime example.  Sparked by the import of lead tainted goods by major toy makers like Hasbro and Fisher-Price, the brunt of the impact has been felt by small businesses and independent sellers that now find it difficult or impossible to continue selling products that were safe all along.

This isn’t to say Republicans are blameless in this regard; quite to the contrary.  Politicians as a class are prone to seek aggrandizement, even in acts ostensibly done to the benefit of their constituents.  Making deals with powerful entities comes naturally.  Expanding government makes that easier.



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