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The Conservative Case Against Crony Capitalism

In an essay for COMMENTARY last year, Michael Gerson and I, writing on how the GOP can revivify itself and increase its appeal, argued that it had to focus on the economic concerns of working-and middle-class Americans, many of whom now regard the Republican Party as beholden to “millionaires and billionaires” and as wholly out of touch with ordinary Americans. (In a Washington Post/ABC News poll that is otherwise filled with awful news for Democrats, by 52 to 32 percent, Americans trust Democrats over Republicans when it comes to helping the middle class.) 

Gaining a fair hearing on a range of issues, we wrote,

requires changing an image that the GOP is engaged in class warfare on behalf of the upper class. Republicans could begin by becoming visible and persistent critics of corporate welfare: the vast network of subsidies and tax breaks extended by Democratic and Republican administrations alike to wealthy and well-connected corporations. Such benefits undermine free markets and undercut the public’s confidence in American capitalism. They also increase federal spending. The conservative case against this high-level form of the dole is obvious, and so is the appropriate agenda: cutting off the patent cronyism that infects federal policy toward energy, health care, and the automobile and financial-services industries, resulting in a pernicious and corrupting system of interdependency. “Ending corporate welfare as we know it”: For a pro-market party, this should be a rich vein to mine. 

Now comes a miner by the name of Mike Lee, who last week delivered a powerful conservative case against crony capitalism.

In his speech Senator Lee defines crony capitalism (policies in which government twists public policy to unfairly benefit favored special interests at the expense of everyone else); identifies specific cases of it (federal financial regulations, sugar subsidies, our education system, and the Affordable Care Act, among others); and explains why it is antithetical to true conservatism.

Senator Lee also identifies policies that would combat cronyism, including tax, budget, and regulatory reform, ending special tax treatment for the energy sector, protecting taxpayers from the implicit health-insurer bailouts in the Affordable Care Act, modernizing federal labor laws, doing something about “too big to fail,” and more.

“Americans intuitively understand that crony capitalism is not a form of private enterprise,” according to Lee, “it’s a form of public corruption.” He went on to say, “It seems to me that a principled, positive agenda to remove government-created barriers to upward mobility and middle-class opportunity – to level our economic playing field and put economic elites back to work creating jobs and growth for everyone else – represents everything conservatism should stand for.”

I agree; and I hope more conservatives will rally to this good cause.



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