Eric Cantor: One Door Closes, Another Opens

Many people believe we live in a pro-market society where the agenda aims at encouraging the best business conditions for everyone. The reality is we live in a pro-business society where the agenda aims at maximizing the profits of existing firms. This occurs through public policy and legislation written to favor certain firms within each industry in return for political contributions, i.e. cronyism. This is a problem that crosses party lines, and should increase in intensity with the Republican’s recent election success.

And for Eric Cantor, it should be a very busy time. Many wondered why an investment banking firm would hire him with supposedly limited industry experience. Not to worry, he has something of greater value – connections within Congress. He can navigate more efficiently introductions to those legislators who would be supportive of his firm’s client’s interests, than someone waving a checkbook. Needless to say political contributions will occur at some point. Doing so while working for a small firm helps to minimize his appearance on the Feds investigative radar.

Cantor is a smart person, one of many who work to ensure a favorable playing field for those businesses and wealthy individuals willing to financially support a certain political agenda. A 2005 study “Economic Inequality and Political Representation” examined responsiveness of U.S. Senators to the preferences of wealthy, middle-class, and poor constituents; included was senators’ voting behavior as well as specific votes on minimum wage, civil rights, government spending, and abortion. (See figure 3 in the 2005 study mentioned above – the link is provided) A 2012 study provided similar results. Again this goes across party lines.

Mitigating cronyism begins with reversal of Citizens United and establishing a waiting period from the time one leaves public office to when they can become a lobbyist. A tall order, but would be effective across party lines.

So why single out Cantor? When the new Republican House majority convened at a Baltimore retreat in January, 2011, Cantor is quoted as saying “I’m urging you [Republican House members] to look at a potential increase in the debt limit as a leverage moment when . . . President Obama will have to deal with us” and accept deep spending cuts.

There is nothing wrong in negotiating budget cuts. However, Cantor as the lead with Paul Ryan and McCarthy of California laid out a strategy to take hostage the full faith and credit of the United States by threatening not to raise the debt limit to accommodate previous decisions made by Congress, and signed by the president. The dollar remains the primary global currency and with it comes people’s trust that the U.S. Treasury will pay its obligations when people buy bonds. But they were going to take that hostage in order to get immediate spending cuts.

Further Cantor is a supporter of “starve the beast”. The approach is to create or increase existing budget deficits via tax cuts to force future reductions in the size of government. Social programs such as food stamps, social security, and Medicare, and Public Education become targets for reduction; though military spending, prisons, and weapons do not. The wealthy are happy because they get the benefit of greater tax cuts and most importantly are not affected by cuts in programs the middle-class and poor desperately need. “starve-the-beast” is not about starving the government; it is about starving you, your family, and your future generations.

 Cross-post at Daily Kos and  DirigoBlue

References
http://www.amazon.com/Capitalism-People…/dp/0465085954/
http://www.amazon.com/Even-Worse-Than-Looks…/dp/0465031331
http://www.princeton.edu/~bartels/economic.pdf
http://www.econ.yale.edu/faculty1/washington/less-income.pdf
http://www.washingtonpost.com/…/07/13/gIQAPZTwCI_blog.html

 

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