President Obama's Surprising Relationship With Lobbyists and Big Business

Barack Obama campaigned for president, says Tim Carney, as an advocate for big government, claiming that more federal regu­lation and spending will protect American consumers against the excesses of big business. But, Carney argues in Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses, the president's push for more intervention has actual­ly favored big business and lobbying. Carney, lobbying editor and columnist at the Washington Examiner and award-winning author of The Big Ripoff, re­cently chatted with U.S. News about the surprising relationship between big government and big business and how Obama is helping the same special in­terests he says he's fighting. Excerpts:

What is Obamanomics?

Obamanomics is the use of big govern­ment—such as regulation, taxes, spend­ing—in a way that ends up benefiting big business and the most entrenched spe­cial interests. Look at the healthcare regulations that are being debated on Capitol Hill. While Obama may package this as a crusade against the big, evil health industry, he has cut deals in the White House with the drug lobbyists.

Is it much different from Bushonomics?

If you were to define Bushonomics as his last year, I'd say that was the perfect preface to Obamanomics. Bush mostly tried to cut taxes and did not expand regulations, but Obama is a bigger be­liever in government than Bush—at least than Bush professed to be. Think of Bush's last few months with the bailouts of Wall Street and of Detroit. Put it on steroids, and then you've got Obamanomics.

So who wins in Obamanomics?

General Electric and Goldman Sachs are two of the biggest winners. General Electric has spent more on lobbying over the last decade than any other company. They're benefiting from Obama's poli­cies on federal funding for embryonic stem cell research, on federal funding for freight trains and high-speed pas­senger rails, and on global warming cap-and-trade regulation. There seems to be some sort of symbiosis between GE and the Obama administration. GE is both following Obama's lead and influencing policy.

You argue in your book that big business and big government actually work together.

Yes. The idea that big business and big government are rivals is what I call "the big myth." It's true about half the time, and the other half of the time, big busi­ness lobbies for and profits from big government. This is not new under Barack Obama, but Obama's the current practitioner, and I think he may be the most prolific practitioner of this sort of big business-big government collusion. When government is getting involved in an industry, whoever has the best lobby­ists is more likely to win, and that's not going to be mom and pop.

You say that there has been "hypocrisy" in the Obama campaign and presidency.

Where I think it's most egregious is the difference between his rhetoric and what he's doing on healthcare, where he pack­ages it as his enemies being funded by well-funded special interests, where he is literally cutting backroom deals with drug makers. The one particular incident where it's most acute, though, was prob­ably in June when he signed the law regulating tobacco, where he said that he was signing this law despite the influence of Big Tobacco, but the bill had been sup­ported by Philip Morris for years, and in fact, Philip Morris had helped write the bill, according to some media reports.

You mention Obama's backroom deals with drug companies. How is that affecting the healthcare debates in Congress?

Well, you see, some of the campaign pledges that Obama had made he has now dropped from his healthcare reform. He is not going to try to get Medicare to negotiate drug prices under Medicare Part D—that's the prescription drug ben­efit—and he's not going to try to get re-importation of drugs from Canada. These two could have been cost-cutting measures, but Obama abandoned them to get the drug industry on his side. Having the drug industry broadly on his side has helped him say, "Look, there's such broad agreement that even the drug makers agree that we need to do something."

Why do lobbyists benefit from Obamanomics?

Whenever government gets more in­volved in the economy, a lobbyist be­comes more of a necessity. If the govern­ment is leaving your business alone, you might not need a lobbyist. When the government is handing out hundreds of billion of dollars, investing in a lobbyist becomes more worthwhile. So Obama­nomics is a broad stimulus for K Street.

Aren't there lobbyists for both sides?

Who can hire the former top Senate staffers and the former administration officials? Small business is not going to be able to afford those lobbyists. In­creasingly, some small businesses are lob­bying up and small towns are lobbying up in order to get stimulus funds and that sort of thing, but that's more of a burden on them. That's just adding to the cost of doing business.

But hasn't the Obama administration been pretty tough on lobbyists?

Obama doesn't have to be directly help­ing lobbyists to be indirectly helping them. If he cracks down on them in one way, just the fact that he is adding to regulations, handing out hundreds of billions of dollars, and also increasing mandates and ramping up bailouts—all of that is making lobbying a crucial part of busi­ness, especially a big business.

Has Obama done anything right since he started his presidency?

He has, to some extent, increased trans­parency, which has been good, and he hasn't bailed out everybody. He's allowed some businesses to fail. I have hope that he will try and make a serious effort to cut down on government waste and on pork-barrel spending, and I think that would clean up corruption and limit the growth of government.

What will surprise readers most?

To what extent big business is wanting to be regulated more and sometimes want­ing even to be taxed more. The common assumption is that big business wants to be left alone, but I document that in many cases, probably half the time, that's sim­ply not the case.

What is your solution?

The only way to get rid of corruption in the high places is to get rid of the high places. Government should get out of the business of picking winners and losers. A free market is the fairest system for small businesses and new businesses, while a heavily regulated market and a subsidized market protect the current big business.

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