Behind the Big Ripoff
As part of our continuing series of interviews (see our interviews with Gene Healy, James Howard Kunstler, and Peter Stanlis), we are pleased to present this interview with writer and political reporter Timothy P. Carney. Tim is one of the most interesting young political reporters today, whose work does not easily fit within the liberal-conservative divide.
Tim is the editor of the Evans-Novak Political Report and a weekly columnist for the Washington Examiner. His 2006 book, The Big Ripoff: How Big Business and Big Government Steal Your Money (Wiley) won the prestigious Templeton Enterprise Award sponsored by the Templeton Foundation and the Intercollegiate Studies Institute. Tim has worked as a political reporter for Bob Novak and an assistant editor at Human Events. He has also served as a Phillips Foundation Journalism Fellow and the Warren T. Brookes Journalism Fellow at the Competitive Enterprise Institute. Tim has been published in the Wall Street Journal, Washington Times, New York Sun, National Review Online, American Spectator, American Conservative, and other magazines, newspapers, and websites. Tim is currently an editor at Regnery Publishing.
UB: Briefly, what is the theme of The Big Ripoff?
TC: Government regulation is often created at the request, and to the benefit, of big business. Enron supported the energy-restricting Kyoto Protocol on climate change. Philip Morris backed federal regulation of tobacco. Boeing, General Electric, and Halliburton all lobby for more government, not less.
It’s a reporting book, full of under-reported stories, and the economic theme is government intervention in the economy benefits the biggest businesses while hurting consumers, competitors, and taxpayers.
UB: How does political debate misunderstand the relationship you see between government and business get reflected in political debate?
TC: Liberals often demand regulation as a way to curb big business, while conservatives often defend business as if that were the same thing as defending the free market. In truth, being “pro-business” often means being pro-regulation, while being pro-free-market is the last thing many big businesses want.
UB: In other words, both parties fall for the same rhetoric?
TC: I think among the activists, yes, there is a lot of misperception. But many Democrats—including Barack Obama and many leading congressional Democrats—are well aware that the best way to win over big donors is to create a new government program. Meanwhile, they convince the media that the critics of the government intervention are shills for big business. It’s nice work if you can get it.
UB: Conservatives often speak of “capitalism” or “the free market”; have conservatives bought into the illusion that big business means capitalism is working?
TC: Many have. It’s an easy illusion to fall for. We know Ralph Nader hates GM, and we know Ralph Nader is a socialist. So it’s easy to assume defending GM is the same as defending the free market.
But, as I discuss in The Big Ripoff, “capitalism” has two meanings. First, it can be a synonym for the free market. But in other contexts it describes a sort of economy in which there is much debt and well-ordered capital markets with much investing. Alexander Hamilton knew these two—free markets and robust stock markets—might be at odds. He favored stock markets over free markets. He won.
UB: You have some great vignettes in the book about the desire of big business to have government action. What's your favorite?
TC: My favorite, because it demonstrates the misperception if the situation, was the story I told of a source of mine who worked on Capitol Hill. When the Democrats were gunning for the tobacco companies, a Philip Morris lobbyist called this Hill staffer and requested a meeting. The staffer, whom I call “Mr. Smith,” was excited for the meeting. He envisioned a strategy session for defending business and free markets. His heart was broken when the Philip Morris lobbyist began the meeting by asking for Mr. Smith’s support in pushing for federal regulation of tobacco.
When that bill failed, the Washington Post uncritically quoted liberal Sen. Tom Harkin blaming the Republicans for doing the bidding of “Big Tobacco.”
UB: Do you think a recognition by conservatives of this big business/big government connection would cause a respect instead for local industry and smaller businesses?
TC: Absolutely. As a free-market advocate, I used to sometimes feel guilty that I preferred Mom ’n’ Pop and the local economy to Wal-Mart, because I figured Mom ’n’ Pop were only protected by strict zoning and anti-corporate government policies. Now I perceive that the net effect of government is to quash local business, small business, and entrepreneurship in favor of bigger companies that promise more efficiency and can afford lobbyists.
I sometimes use the word “Luddertarian”: Luddite-libertarian. I know that without government we would have fewer roads, trains, and shipping canals. I think the libertarian vision would really yield a more local, more varied economy with more entrepreneurs and fewer people working for someone else.
UB: How does the recent bailout of the financial services industry fit into your thesis?
TC: Well, let’s say I was the least surprised person when this happened. I was frustrated by the Left’s gloating to the effect of “oh, these free-market purists are begging for government handouts.” Lehman, Fannie, Goldman, GM, AIG—they have always been in bed with big government.
UB: Finally, what lead you to write this book?
TC: I saw that too many free-market types thought big business was an ally. I also saw that the Left gains rhetorical points by assailing anti-regulation forces as big business shills. I wanted to try to correct these misperceptions.
UB: Thanks for speaking with us.
Posted: December 7, 2008 in Interviews.
Much Ado About Nothing—or Something