One Statement That Reveals All You Need To Know About Politics & Business

POLITICO has a new story on how big money donors from NYC are reacting to the changes in the Republican Party. The most interesting part of it, though, is one statement that so perfectly encapsulates the big government-big business relation:

“Everyone in the financial industry, much like the business world, look at politics as an investment, and they just don’t feel like they got much of a return,” said one financial services Republican lobbyist. “I think it is going to be tough this time.”

The moral of the story? That liberals, who are always decrying big business and want to increase big government to control it, are fools. Since businessmen view political contributions as an investment, the larger you make government, the more money businessmen will invest in it.

And, of course, the best way to do that is through campaign contributions and lobbying. Randall Holcombe, a professor of economics at Florida State University and a research fellow at the Independent Institute, explains why:

When government is limited, both in its budget and its regulatory powers, businesses seek profits through innovation and productive activity. Big government inevitably influences business profitability because taxes lower profitability, subsidies can raise it, government expenditures can aid business projects, and regulations can provide both benefits to firms and erect barriers for their competitors. So, with big government, businesses have to turn their attention toward those activities of government that influence their profits.

The notion that big government can control crony capitalism is exactly backwards. Big government causes crony capitalism.

There are many more interesting items in the POLITICO story—namely, that the big guns are sick and tired of the GOP’s hard line on social issues and want it to take a more moderate (or even libertarian) stance—but at the end of the day, that’s the money quote above. It highlights everything wrong with the liberal approach to the “political money” problem, and to the liberal approach to big business in general.

Want to stop big business “buying” elections? Want to stop them running roughshod over the economy and screwing you over? Easy. Shrink government.

It’s the only answer.

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