Private Interests and Public Money

One of the extraordinary developments in the current presidential campaign is that the front runners on both the Democrat and the Republican side are emphasizing their opposition to the "special interests". Given that the world is rapidly becoming a more dangerous place, and that our unemployment rate (when we include those who have dropped out of the official statistics) is so high, one would expect this issue to be on the back burner.

A central belief of Bernie Sanders, who is running a surprisingly effective campaign, is that our economy is rigged by the wealthy, in such a way that the average person gets short-changed. As Bernie's website puts it: “We are talking about a rapid movement in this country toward a political system in which a handful of very wealthy people and special interests will determine who gets elected or who does not get elected.”   

On the Republican side, Donald Trump claims his political rivals are indebted to special interest groups, whereas he, a billionaire, doesn’t need to take money from anyone.

Hillary Clinton will not be outdone: “We have to end the flood of secret, unaccountable money that is distorting our elections, corrupting our political system, and drowning out the voices of too many everyday Americans."

The problem with these candidates who promise to fight the special interests is that they are creating more special interests, which will be even more uncontrolled.

Take Bernie Sander's promise to give free college to all. When you see the students cheering Bernie, what do you see if not a new special interest group? After all, who is going to pay for their free years at college?

The fundamental question is all too often ignored: “Who defines the public interest?" 

To Trump it’s simple. He believes it is in the public interest to force companies to build factories here, not abroad. So when Ford decided to build a plant, originally planned for Tennessee, in Mexico, it was obvious to Trump that any politician who didn’t punish Ford must be a tool of special interests: “I said what would Jeb do, and Hillary. And by the way all the politicians... because they’re all controlled, one hundred percent. So, he’ll say, ‘I don’t really want to let the plant be there, I want it built in the United States. We say ‘oh we have a great president’. But then what happens? He gets a call from one of his fundraisers. And they say ‘Jeb, you can’t do that. You had Ford make contributions to you. You had other people make contributions to you. And they want it to happen...”

But an article in the Wall Street Journal suggests why Ford chose Mexico. Other companies (BMW, Audi, Kia) are also passing over the American south and building in Mexico, and not only because of lower wages. For Audi, a crucial factor was trade. "Mexico has 10 free-trade arrangements encompassing 45 countries -- counting EU members separately -- plus other trade deals in Latin America and the Asian Pacific, according to the government’s trade office. In contrast, the U.S. has free-trade agreements with 20 countries, mostly smaller economies such as Chile, Jordan and Panama.“ So a policy that goes against Trump's instincts, of having free trade agreements with most of the world, is boosting the Mexico option for all these car companies.

So is it in the public interest to force our companies (such as Ford) to have a disadvantage relative to Kia, BMW, Audi, and others? At the least, the whole issue is open to debate.

Or take the coal industry. In June 2015 coal lobbyists made a last-ditch appeal to the Obama administration to loosen its strict proposed limits on greenhouse gas emissions from coal-fired power plants. Is this a case of a greedy industry using money to distort the wise Obama decision to cut down on greenhouse gases before global warming spins out of control? Or is a case of a beleaguered industry that provides a necessary product, fighting for the jobs of its workers, and only trying to defend itself from draconian rules based on iffy computer models that will destroy it and in the process drive up the costs of energy for those least able to afford it?  In this case a special interest may be in the public interest.

And where does the public interest lie on ethanol? Cruz won in Iowa despite coming out against the ethanol mandate, a stand that led him to be denounced by Iowa’s popular governor. America’s Renewable Future, the pro-ethanol group led by the Iowa governor's son, Eric, ran a radio ad against Cruz: “Politicians like Ted Cruz support subsidies for big oil, but want to end support for ethanol. Cruz backs policies that threaten rural Iowa and thousands of jobs.” So who is fighting the special interests? Cruz, who wants to stop all subsidies to all types of energy, or Eric Branstad, who wants to increase the income of Iowa farmers and produce a product that supposedly reduces our dependence on foreign oil?

To many environmentalism seems obviously in the public interest, but Owen Paterson, who was British secretary of state for environment, food and rural affairs, wrote this on July 20, 2014 in The Telegraph:

"I leave the post with great misgivings about the power and irresponsibility of -- to coin a phrase -- the Green Blob.

By this I mean the mutually supportive network of environmental pressure groups, renewable energy companies and some public officials who keep each other well supplied with lavish funds, scare stories and green tape…

I soon realized that the greens and their industrial and bureaucratic allies are used to getting things their own way. I received more death threats in a few months at [the Department for Environment, Food and Rural Affairs] than I ever did as secretary of state for Northern Ireland."

Proponents of the public interest eventually create groups with a very private interest in taking the public's money. Take the beyond reproach (when it comes to the media) take-care-of-refugees lobby. Organizations such as International Rescue Committee, U.S. Committee for Refugees and Immigrants, Church World Service, World Relief, Lutheran Immigration and Refugee Service, and many more “contractors” receive hundreds of millions of tax dollars from the State Department (DOS), Health and Human Services (HHS), Housing and Urban Development (HUD), as well as foundation grants, to bring in migrants designated as refugees by the UN High Commission for Refugees. They have become a formidable lobby for taking in large numbers of Muslims from war-torn countries of the Middle East. Given the European experience, that this is in the public interest is a debatable proposition.

In conclusion, the concepts of "special interests" and “public interest" are muddy. The kind of ham-fisted approach that some of our candidates want to take to limit what they define as special interests may do more harm than good. As conservatives have often suggested, if our government is not in the position to do people favors, then people won't seek favors from government. A smaller government, limited to the powers enumerated in the constitution, would help to achieve that worthy goal.