The Big Myth

The myth is widespread and deeply rooted that big business and big government are rivals—that big business wants small government.

A 1935 Chicago Daily Tribune column argued that voting against Franklin D. Roosevelt was voting for big business. “Led by the President,” the columnist wrote, “New Dealers have accepted the challenge, confident the people will repudiate organized business and give the Roosevelt program a new lease on life.” However, three days earlier, the president of the Chamber of Commerce and a group of other business leaders met with FDR to support expanding the New Deal.

The day after George W. Bush’s inauguration in 2001, columnist Paul Krugman assailed the GOP. “The new guys in town are knee-jerk conservatives; they view too much government as the root of all evil, believe that what’s good for big business is always good for America and think that the answer to every problem is to cut taxes and allow more pollution.” At the same time, “big business” just across the river in Virginia was ramping up its campaign for a tax increase, and Enron was lobbying Bush’s closest advisors to support the Kyoto Protocol on climate change.

Months later, when Enron collapsed, writers attributed the company’s corruption and obscene profits to “anarchic capitalism,” and asserted that “the Enron scandal makes it clear that the unfettered free market does not work.” In fact, Enron thrived in a world of complex regulations and begged for government handouts at every turn.

In 2004, an anti-Bush protest group that called itself “Billionaires for Bush,” sporting false names such as “Phil T. Rich” and “Lucinda Regulations,” tried to reinforce the conventional view that the rich (read: big business) and the Republicans are good friends. Big business and the filthy rich, however, are hardly staunch opponents of tight regulations, as evidenced by the money that the “Billionaires” received from actual billionaires who were certainly not for Bush.

When President Bush helped defeat a congressional bill for strict new regulation of tobacco in 2004, Democratic Senator Tom Harkin charged that the president had “concurred with big tobacco.” In fact, Philip Morris openly and actively supported the bill that the president had opposed. When Barack Obama signed such a bill in 2009, he stated that the bill’s passage came “despite decades of lobbying and advertising by the tobacco industry.” At that very moment, Altria—the parent company of Philip Morris–-was celebrating the new law, which they had long supported.

When commentators do notice businesses seeking more federal regulation, they mark it up as an aberration.

When a Washington Post reporter noted in 1987 that airlines were asking Congress for help, she commented, “Last month, when the airline industry found itself pursued by state regulators seeking to police airline advertising, it looked for help in an unlikely place—Washington.” In truth, airline executives had been behind federal regulations of their industry for decades and had aggressively opposed deregulation.

That Post reporter was not the first journalist to be shocked by the airline industry’s flirtation with government. A Chicago Tribune story in 1975 quoted top airline executives pleading for the preservation of strict federal regulations of airlines. The headline betrayed the writer’s shock, “What’s this? Airline chief wants continued control.” But airline executives had been in the regulatory regime from the beginning.

In 1984, the National Association of Manufacturers (NAM) rated members of Congress on their voting records, with a high score indicating that the congressman was pro-manufacturer. Democratic Congressman James Jones scored higher than Republican Newt Gingrich, while Democrat Dan Rostenkowski, the leading tax hiker of the day, scored above average. Commentator Walter Olson declared, “NAM has broken with its old reputation as a bastion of laissez-faire.”

But two years earlier, Washington Post reporter David Broder told this story: “When reporters left the headquarters of the Chamber of Commerce of the United States yesterday morning, after a news conference in which its president claimed that business is ‘10-to-1 against’ President Reagan’s tax increase bill, a strange sight greeted them. On the sidewalk was a publicity man from the National Association of Manufacturers with a handout claiming that ‘the vast majority of American business leaders’ favor passage of the bill ‘as quickly as possible.’”

While the president of the Chamber opposed the tax hike, about half of the board and its chairman favored higher taxes. Assumptions about business and taxes remained unchanged 11 years later. When the U.S. Chamber of Commerce supported Bill Clinton’s tax increase in 1993, columnists Rowland Evans and Robert Novak wrote about “the switch of the U.S. Chamber, long an impassioned advocate of the free market.” At the same time, Republican Congressman John Boehner said the Chamber, “has refused to be what it had been in the past, a firebrand, principled organization.”

And so it goes that every time a regulation is defeated, its proponents claim a victory for big business and a loss for the little gal. Every time commentators see a big business favoring higher taxes or greater regulation, they note it as an oddity.

The big myth is alive and well.

Tim Carney is the senior political columnist at the Washington Examiner. This piece was adapted from Carney’s 2006 book, The Big Ripoff: How Big Business and Big Government Steal Your Money.