Rep. Alexandria Ocasio-Cortez speaks on Capitol Hill in Washington, D.C., February 7, 2019. (Jonathan Ernst/Reuters)

When the government hugs big business, big business hugs back, and its embrace leaves the rest of us in the cold.

Amazon is taking its ball and going home, and New York Democrats are actually celebrating.

I wasn’t a huge fan of the deal New York and Amazon worked out. I don’t like corporate welfare, and the race among municipalities to bribe businesses to set up shop in their backyards has a lot of problems. The news that Amazon is spurning the Big Apple and searching for a different location will undoubtedly spark an unseemly frenzy among other cities, reminiscent of the search for the last golden ticket in Willy Wonka and the Chocolate Factory.


But what’s just astounding to me is how Democrats can (almost in one breath, figuratively speaking) champion a Green New Deal that would use the powers of the state — taxes, subsidies, regulatory bullying, etc. — to herd whole industries into alignment with their vision of a just and green society, and at the same time denounce these very tactics when actually put into practice.

The most prominent architect of the GND is New York Representative Alexandria Ocasio-Cortez. Under her proposal, cows might suffer, but humans will thrive thanks to all the wonderful new jobs and free health care her utopian scheme would provide.

AOC, as she’s ubiquitously called, rejects the idea that traditional market economics or fiscal bookkeeping should be any hindrance to her scheme.



“I think the first thing that we need to do is kind of break the mistaken idea that taxes pay for 100 percent of government expenditure,” she recently told NPR’s Steve Inskeep. “It’s just not how government expenditure works. . . . Government projects are often financed by a combination of taxes, deficit spending, and other kinds of investments — you know, bonds and so on.”

When Inskeep pointed out to her that deficit spending is “borrowing money that has to be paid back eventually through taxes,” AOC reversed herself with an impressive lack of embarrassment, saying that’s okay because this isn’t spending, it’s investing. Borrowing tens of trillions for her “investments” will pay for itself, “Because we’re creating jobs.”

The Amazon deal would have created some 25,000 jobs with an average annual salary of $150,000, but AOC was against it because the agreement amounted to “creeping overreach of one of the world’s biggest corporations.”

Maybe it did. But I have news for AOC and others trying to use the precedent of the original New Deal as an excuse to get the band back together: This is how New Deals work.



The original New Deal was a bonanza for big business. In their effort to mobilize the U.S. economy to fight the Depression, the New Dealers favored big businesses and “associations” — cartels, guilds, syndicates, etc. — at every turn. The largest corporations individually or in association wrote the “codes” — i.e., regulations — of the National Recovery Administration and other agencies for their own benefit. It was all done in the name of efficiency and progress.

For instance, the big chain movie houses of the 1930s — the Netflixes and Hulus of the time — wrote the codes in such a way that independents were nearly run out of business, even though 13,571 of the 18,321 movie theaters in America were independently owned.

A review board chaired by legendary lawyer Clarence Darrow investigated the NRA and found that, in “virtually all the codes we have examined, one condition has been persistent . . . . In Industry after Industry, the larger units . . . have for their own advantage written the codes, and then, in effect and for their own advantage, assumed the administration of the code they have framed.”


This is what happens whenever any government pursues industrial policy: The biggest stakeholders demand to wet their beaks if they’re going to go along. The resolution introduced by AOC says it will “invest in the infrastructure and industry of the United States to sustainably meet the challenges of the 21st century.”

As my American Enterprise Institute colleague (and zealous enemy of corporate welfare) Timothy P. Carney writes in the Washington Examiner, “All of these dreams become real only if the federal government forks over billions and billions to General Electric, Siemens, monopoly utilities, Tesla, Google, and the other corporate giants who hire the right lobbyists and position themselves to pocket the handouts.”

The lesson of such efforts throughout American history and across the world is that when the government hugs big business, big business hugs back, and its embrace leaves the rest of us in the cold.

The Amazon deal wasn’t the opposite of what AOC wants; it was a trial run.

© 2019 Tribune Content Agency LLC.

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