THE BIG RIPOFF HOW BIG BUSINESS AND BIG GOVERNMENT STEAL YOUR MONEY TIMOTHY P. CARNEY John Wiley & Sons, Inc. carn_a01ffirs.qxd 5/9/06 10:26 AM Page iii carn_a01ffirs.qxd 5/9/06 10:26 AM Page ii THE BIG RIPOFF carn_a01ffirs.qxd 5/9/06 10:26 AM Page i carn_a01ffirs.qxd 5/9/06 10:26 AM Page ii THE BIG RIPOFF HOW BIG BUSINESS AND BIG GOVERNMENT STEAL YOUR MONEY TIMOTHY P. CARNEY John Wiley & Sons, Inc. carn_a01ffirs.qxd 5/9/06 10:26 AM Page iii Copyright © 2006 by Timothy P. Carney. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. 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JK467.C39 2006 322′.30973—dc22 2006009327 Printed in the United States of America. 10987654321 carn_a01ffirs.qxd 5/9/06 10:26 AM Page iv I dedicate this book to my parents, my brothers, my wife, and our baby. carn_a01ffirs.qxd 5/9/06 10:26 AM Page v carn_a01ffirs.qxd 5/9/06 10:26 AM Page vi Contents Foreword by Robert D. Novak ix Acknowledgments xiii 1 The Big Ripoff:The Greatest Trick the Devil Ever Pulled 1 PART I FRIENDS IN HIGH PLACES 13 2 The Parties of Big Business: Corporate America Loves Republicans and Democrats—Republicans and Democrats Love Big Business 15 3 The History of Big Business: . . . Is the History of Big Government 31 PART II CORPORATE WELFARE 53 4 Robin Hood in Reverse: Corporate Welfare in America 57 5 Boeing’s Bank:The Export-Import Bank of the United States 75 6 Eminent Domain for Corporate Gain:The “Public Purpose” of Big Business 91 PART III REGULATE ME! 107 7 Regulators and Robber Barons: How Government Regulation Protects the Big Guys and Rips Off the Little Guys 111 vii carn_a02ftoc.qxd 5/9/06 10:27 AM Page vii 8 The War against Tobacco:Why Phillip Morris is Leading It 133 9 You Get Taxed,They Get Rich:Why Big Business Loves High Taxes 155 PART IV GREEN:THE COLOR OF MONEY 173 10 Environmentalism for Profit: How Bad Environmentalist Laws Give Your Money to Big Business 177 11 Enron:A Big-Government Scandal 195 12 Ethanol and Archer Daniels Midland: Corporate Moonshiners on the Dole 223 Notes 243 Index 267 viii C ONTENTS carn_a02ftoc.qxd 5/9/06 10:27 AM Page viii [...]... myth helps big business and big government get their way even more.These chapters debunk this myth and set the groundwork for demonstrating just what big business is doing in Washington and just what big government is doing to our economy carn_c02.qxd 5/9/06 10:21 AM Page 15 2 The Parties of Big Business Corporate America Loves Republicans and Democrats—Republicans and Democrats Love Big Business he... enrich some big business with your money, you lose twice—you are poorer thanks to taxes, and your voice matters less in the marketplace Regulations are similar Business obeys the almighty dollar, which, in turn, means that it obeys the consumer.A businessperson dedicates time and money to answering consumer demands But when government starts regulating, business has two masters the people and the bureaucrats.Also,... Republicans as the party of big business Republicans have been campaigning since at least 1994 as the champions of small business The facts suggest otherwise Exit polls, campaign finance data, election results, and a couple of telling anecdotes in the next chapters show that both parties are equally the party of big business, and both parties eventually expand the power and size of the government A 13... Moreover, government is happy to comply The Big Myth The myth is widespread and deeply rooted that big business and big government are rivals—that big business wants small government A 1935 Chicago Daily Tribune column argued that voting against Franklin D Roosevelt was voting for big business “Led by the President,” the columnist wrote, “New Dealers have accepted the challenge, confident the people... perspective of the government Schlesinger wrote that “Liberalism in America [the progression of the welfare state and government intervention in the economy] has been ordinarily the movement on the part of the other sections of society to restrain the power of the business community.”4 The standard assumption seems to be that government action protects ordinary people by restraining big business, which,... hate the player, hate the game.” Most of the stories in this book depict business cleverly playing by the crooked rules of politics and end with you being ripped off The blame lies with those who wrote the rules carn_c01.qxd 5/9/06 12 10:21 AM Page 12 THE BIG RIPOFF The Lesson Reducing the power of the government over business would alleviate some corruption and level the playing field In a smaller government. .. Joe and Joanna Smith wouldn’t be ripped off quite so much Businesses will always do whatever they can to make money If they have government available as a tool, they will use it Government and business working together, as this book shows you, make a very dangerous coupling—almost like a drug dealer and an addict This book shows you the nature of this addiction and how it harms regular people the most... of the business- government intimacy often harm the “little guy,” But, no, big business s usual goal is not to “avoid regulation.” Nor is government regulation, taxation, or welfare usually aimed at “restrain[ing] the power” of big business The truth—as the stories in this book demonstrate—is that big business lobbies for and profits from big government policies that ripoff consumers, taxpayers, and. .. was the scourge of big business, and his Bull Moose wing of the GOP overthrew the robber barons who had reigned during the Gilded Age A closer look at the Progressive Era, however, unearths continued big business influence that resulted in vast expansions of federal power Woodrow Wilson, Herbert Hoover, and Franklin D Roosevelt followed the same pattern: increase government and help big business The. .. most of the others: It is not about the victims as much as it is about the perpetrators This book doesn’t focus on the regular guy’s or gal’s struggle.This book peers into the proverbial smoke-filled room where the ripoffs are planned and executed and shows you the regular guy or gal—what goes on in that room.This book shows that the two most powerful characters in America— big business and big government are . Cataloging-in-Publication Data: Carney, Timothy P., 197 8- The big ripoff : how big business and big government steal your money / by Timothy P. Carney. p. cm. Includes bibliographical references. ISBN-13:. Page ii THE BIG RIPOFF carn_a01ffirs.qxd 5/9/06 10:26 AM Page i carn_a01ffirs.qxd 5/9/06 10:26 AM Page ii THE BIG RIPOFF HOW BIG BUSINESS AND BIG GOVERNMENT STEAL YOUR MONEY TIMOTHY P. CARNEY John. THE BIG RIPOFF HOW BIG BUSINESS AND BIG GOVERNMENT STEAL YOUR MONEY TIMOTHY P. CARNEY John Wiley & Sons, Inc. carn_a01ffirs.qxd 5/9/06