- The Washington Times - Thursday, July 27, 2006

Big business may be the biggest threat to free enterprise in America, Timothy P. Carney explains in his new book, “The Big Ripoff: How Big Business and Big Government Steal Your Money.” The book examines corporate welfare and other government schemes that benefit major corporations at the expense of small businesses, property owners and taxpayers.

A freelance reporter who has written for the Wall Street Journal, the American Spectator, The Washington Times and other publications, Mr. Carney also has his own Web site (timothypcarney.com). The following are excerpts of an e-mail interview with Mr. Carney:

Question: In American politics, Democrats have the reputation as being the party that represents the interests of the working class and poor people. How does that image match up to reality?

Answer: Democrats are faithful to the labor unions, but that’s a different thing than helping the average American.

In researching my book, I found that the richest Americans are the core of the Democratic Party. The top three industries funding the 2006 election so far are lawyers, real estate and investment. All three of those industries have given more money to Hillary Clinton than to any other politician. The top four contributors to the 2004 election, all giving over $10 million, gave exclusively to Democrats, with George Soros topping the list.

In 2000, voters who identified as “upper class” voted only 39 percent for George Bush and 56 percent for Al Gore. The richest counties in the U.S. voted for Kerry in 2004.

The Democrats argue that tax cuts and deregulation hurt the little guy, but my book makes the opposite argument.

Q: By contrast, Republicans have the reputation of being a party devoted to deregulating the economy. How does that image match up to reality?

A: Historically, the GOP’s record on the economy is not as free-market as its rhetoric. Perhaps the worst instance of government central planning in U.S. history was Richard Nixon’s wage and price controls, which the National Association of Manufacturers and other business leaders applauded.

The current Congress’ record on pork and spending puts the lie to the GOP’s limited-government record. Republicans are nearly as prone as Democrats to increasing government control of the economy, in part because big business has so much influence in both parties.

Q: You show several cases in which big business supports increased economic regulations and higher taxes. Why do they do that?

A: In general, regulation adds to overhead, which creates a barrier to entry and disproportionately affects smaller businesses. When Wal-Mart’s CEO calls on Congress to consider raising the minimum wage, he knows that Mom and Pop will be affected by a minimum-wage hike, while Wal-Mart likely won’t.

Also, working with bureaucrats and politicians — rather than just telling them to buzz off — is good long-term strategy in the eyes of many CEOs and lobbyists. Microsoft learned the hard way that minding your own business will incur the wrath of Washington.

Finally, big business can afford the most connected lobbyists. By concentrating power in Washington, you further empower big business vis-a-vis their smaller competition.

Q: Why do environmental activists push an agenda that is highly favorable to big business?

A: Most environmentalists are driven by a real desire to save the world. Some, such as Al Gore, also want to give the government more power. Businesses are clever enough to realize that green regulations can mean greenbacks.

Enron’s support of the Kyoto Protocol and General Electric’s recent “ecomagination” campaign are two clear examples of big business seeking profit in dubious environmental initiatives. Part IV of my book, “Green: The Color of Money,” tells a dozen similar stories.

Q: Why would major tobacco companies support government regulation of their industry?

A: Philip Morris controls 50 percent of the U.S. tobacco market. Any new regulations will add to their costs, but they can afford those new costs in ways smaller companies cannot.

Also, the Food and Drug Administration would severely curb tobacco advertisements even more. If no American ever saw another cigarette ad again, Marlboro (a Philip Morris brand) would do fine. Newer or [regional] brands would suffer.

Q: Since the Supreme Court’s Kelo decision last year, many political activists have paid attention to the issue of property rights and eminent domain. But this has been a problem for many years, hasn’t it?

A: In the 1950s, the federal government went to work terraforming Washington, D.C., using eminent domain to give land to private developers.

One homeowner went to the Supreme Court, and the liberal Warren court ruled that giving land to private companies could qualify as the “public use” that the Constitution requires.

Since then, governments have been engaging in central planning with eminent domain at all levels, usually benefiting big business and ripping off families and small businesses.

Q: Many people in Virginia have wondered why so many Republicans in their state have pushed for tax increases in recent years. Can you explain that?

A: Many Virginia Republicans were won over to the pro-tax side by big businesses. Specifically, big developers who bought plots well outside the Beltway and wanted to “pave their driveway” at taxpayer expense, as anti-tax Sen. Ken Cuccinelli put it.

Also, the guys getting the road-building contracts didn’t mind the sales-tax hike either.

Q: Do you think that your book will cause people to take a different view of politics, beyond the familiar stereotypes?

A: I’m hoping that conservatives and free-market advocates will come away with a bit more wariness about big business. Too often, these free-market activists and journalists assume big business is on their side because of how much some leftists hate these corporations.

Also, for people of all political stripes who prefer small and local to big and national, I hope to convey that regulations, taxes and subsidies are part of the problem, not part of the solution.

Q: Do you see any particular solution to the problems you address in the book?

A: The main solution is for us all to stop turning to the government. After you read my book, you’ll realize that bringing government onto the stage gives an advantage to big business and poses a threat to consumers, entrepreneurs and taxpayers.

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