Sleeping in a strange bed is not so strange in Washington, where lobbyists are eager to fluff the pillows for White House agents, and this is particularly (but not uniquely) true for the Obama administration. The intimate relationship between Google and the Obama White House is particularly close. Google, through its many layers of executives, has dumped boatloads of cash into President Obama’s campaigns, and the company’s lobbyists long ago learned all the shortcuts to the offices of the administration’s top officers. The relationship provides protection for Google in exchange for Google’s support of just about anything Mr. Obama proposes.
Google has been under fire in Europe for its business practices, and here at home, the staff of the U.S. Federal Trade Commission wanted to take the company to court in 2012 for anti-trust violations, arguing that Google’s conduct “has resulted — and will result — in real harm to consumers ” The charges were never brought, however, as Google’s lobbyists persuaded the administration to quash the action. Jeff Chester, director of the Center for Digital Democracy, observed in the wake of what happened that the Obama administration provided “huge help” to Google as it fought congressional and regulatory challenges to its market power.
In fact, the Obama-Google romance is a perfect example of crony capitalism in action, each hand trying to wash the other. Last week, in one telling example, Google announced that it would no longer carry advertising for “payday lending” companies, which the administration has targeted for extinction, describing “payday loan” advertising as “deceptive and harmful” and maybe even “predatory.” Payday lenders are often regarded as semi-respectable loan sharks, but some economists say the industry fills a legitimate need, and putting them out of business could hurt the very people, running short of cash between paydays but unable to get a bank loan, which the White House says it wants to help.
One wit suggests that if Google executives would merely Google “payday lending and Google” they would discover ample economic analysis arguing how mistaken Mr. Obama and his friends are about payday loans. Or they could have a Google lobbyist — they’re thick as thieves all over town — ask Rep. Debbie Wasserman-Schultz, the chairman of the Democratic National Committee, whether she thinks payday lenders provide a legitimate service to her constituents. The executives aren’t likely to do either because they have their marching orders.
Google’s outrage over customer abuse is selective. Google makes millions preserving pornography on its search engines, which is arguably more harmful to the collective culture than payday lending. Payday lending, after all, is a legally legitimate industry. Pornography, though popular, is not.
The Obama administration has pressured and threatened regulated banking institutions that provide financial services to payday lenders through a program called “Operation Choke Point.” Google is safe from pressure to change its business practices, however, because as a partner with the Obama White House it does whatever the White House wants, and does it eagerly and willingly because there’s profit in it. That’s what crony capitalism is all about.