Who's afraid of big business?
Everybody agrees, it seems, that big business has too much influence in Washington. Most people are confused, however, as to what big business is doing with that influence.
Harris Interactive last week released results of a poll in which they asked Americans if they thought a certain group has "too much or too little power and influence in Washington."
On many questions, the results were split. Sixty-eight percent of respondents said the news media had too much power, while 23 percent said the press had too little. Thirty-five percent said churches and religious groups have too much power, while fifty-five percent said they were too powerful.
The closest thing to consensus came on the question, "Do you think big companies have too much or too little power and influence in Washington?" Ninety percent said yes, while five percent said to little. Complementing this opinion, 92 percent said small business has too little influence in Washington, while only four percent said Mom 'n Pop were calling the shots in the nation's capital.
So, the natural follow-up question is, "what is big business buying with all that influence?"
Among Democrats polled, big business's control was even more upsetting, with 96 percent saying corporate America was too powerful, compared to 86 percent among Republicans. This would imply that big business's influence over federal policy is in a direction Democrats and liberals find even more offensive.
A close examination of the political scene in Washington, however, suggests that Republicans and conservatives have far more reason to be upset with big business influence, and liberals ought to be pleased in some cases.
Of course, there are the cases of big business cronyism every good person agrees are bad, and these may have been foremost in the minds of those polled. Republican Congressman Duke Cunningham resigned last month after pleading guilty to taking bribes from a contractor who benefited from Duke's work on the appropriations committee. Before that, Boeing won a lease deal from the Air Force, about which one Air Force official wrote in a private e-mail, "We all know that this is a bailout for Boeing."
But beyond the straightforward corruption, what sort of perfectly legal benefit is big business getting in Washington?
If we look at the big picture of where Washington is headed, it is hard to argue that government is shrinking. Americans for Tax Reform measure "Cost of Government Day," which estimates how many days Americans have to work to pay for government taxes and regulations. In 2000, Americans had paid for government by June 29. In 2005, it was July 4--this was despite annual Bush tax cuts, and decreases in the effect of state and local spending for three straight years. This means that Washington is pushing the cost of government upwards.
The Competitive Enterprise Institute estimates that in 2004, total federal regulatory costs were $877 billion, exceeding the combined profits of all U.S. corporations. In 2004, the pages of the Federal Register increased by 6.2 percent. The number of new federal rules with significant economic impacts increased by 6 percent from 2003 to 2004.
If big business is getting its way, then its way does not lead towards freedom and laissez faire.
Indeed, take two of the most notorious giants of industry, Wal-Mart and Phillip Morris, and look at what they are doing in Washington.
Wal-Mart made news last month when it called for a raise in the federal minimum wage--something Democrats typically welcome. Despite its reputation for paying slave wages, Wal-Mart on average pays its hourly full-time employees $10.53 per hour, according to the company's website. The current federal minimum wage is $5.15 an hour.
So, if minimum wage goes up, Wal-Mart might not pay an extra dime in wages. But Mom 'n Pop corner stores--Wal-Mart's competition--who employ local High School students at or near minimum wage will be in a pickle. The small stores might just have to close their doors, driving even more business to the retail giant--that is if Wal-Mart gets its way in Washington.
And what about evil Phillip Morris? What is it lobbying for on Capitol Hill? Check the company's annual report to find out. The 2005 Altria Group annual report states that the company: "endorsed federal legislation introduced in May 2004 in the Senate and the House of Representatives, known as the Family Smoking Prevention and Tobacco Control Act, which would have granted the FDA the authority to regulate the design, manufacture and marketing of cigarettes and disclosures of related information."
In other words, Phillip Morris is on Ted Kennedy's side in supporting greater federal regulation of tobacco. This regulation, of course, would be more burdensome to smaller cigarette companies than to Phillip Morris, which controls nearly half of the industry.
So, conservatives and libertarians ought to agree: yes, big business influence in Washington is dangerous.