|Sarah Palin speaking at the Tea Party of America Rally, Indianola, Iowa, September 3, 2011|
On September 3, 2011, at Indianola, Iowa, former Governor Sarah Palin of Alaska issued a declaration of war on crony capitalism. At this point it’s unlikely that Palin will throw her hat into the 2012 Republican presidential race. Dan Riehl and Robert Stacy McCain (“The Other McCain”), however, have suggested that Palin might still jump in if she decides that Rick Perry isn’t up to carrying the Jacksonian conservative banner. Palin, like Michele Bachmann, may actually believe that Perry is part of the problem of crony capitalism. I happen to like Perry, who is a strong Jacksonian in his own right with a solid record of achievement as governor of Texas. But whatever the fate of her presidential ambitions, Palin has shown once again that she is the most powerful and charismatic champion for Jacksonian America and its traditional conservative values of liberty and opportunity on the stump today.
Jacksonian America has long seen crony capitalism, also called corporatism, as a grave threat to both economic and political liberty. As Lexington Green (Michael J. Lotus) at Chicago Boyz points out, the acts of King George III and the British Parliament in the 1760s and 1770s were essentially an attempt to impose a London-based crony capitalist economic monopoly on the American colonies. Both left and right are wrong in seeing big government and big business as enemies rather than natural collaborators. The blue model progressive regulatory state, Green argues, was captured long ago by the industries it was supposed to regulate. “The government has turned into an amalgamation of iron triangles—regulators, legislators (or actually their staffs) and industries that are regulated. These work in tandem to their mutual advantage at the expense of the taxpayer and of truly entrepreneurial and innovative businesses.” Andrew Jackson himself offered the classic statement on the dangers of crony capitalism in his Bank Veto Message of July 1832:
It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society—the farmers, mechanics, and laborers—who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles.
Historian Daniel Walker Howe recently wrote that “Jacksonian Democracy was not the precursor of FDR and the New Deal, but of Sarah Palin and the Tea Party movement.” In this central passage from Palin’s Iowa address one can hear the voice of Old Hickory coming through loud and clear:
Yeah, the permanent political class–they’re doing just fine. Ever notice how so many of them arrive in Washington, D.C. of modest means and then miraculously throughout the years they end up becoming very, very wealthy? Well, it’s because they derive power and their wealth from their access to our money–to taxpayer dollars. They use it to bail out their friends on Wall Street and their corporate cronies, and to reward campaign contributors, and to buy votes via earmarks. There is so much waste. And there is a name for this: It’s called corporate crony capitalism. This is not the capitalism of free men and free markets, of innovation and hard work and ethics, of sacrifice and of risk. No, this is the capitalism of connections and government bailouts and handouts, of waste and influence peddling and corporate welfare. This is the crony capitalism that destroyed Europe’s economies. It’s the collusion of big government and big business and big finance to the detriment of all the rest–to the little guys. It’s a slap in the face to our small business owners–the true entrepreneurs, the job creators accounting for 70% of the jobs in America, it’s you who own these small businesses, you’re the economic engine, but you don’t grease the wheels of government power.
The hollowing out of the middle class—the Jacksonian folk community that Sarah Palin champions—is at the root of America’s current social and political malaise. Re-inventing the American dream, the dream of economic opportunity, independence and dignity for Americans of modest means, the dream which led the first British Dissenter colonists to cross the Atlantic in the seventeenth century, is the greatest challenge facing the nation in the twenty-first century. Don Peck, writing in The Atlantic, observes that the rise of the super elite and the decline of the middle class “is a natural outcome of widening markets and technological revolution, which are creating much bigger winners much faster than ever before—a result that’s not even close to being fully played out, and one reinforced strongly by the political influence that great wealth brings.” The hollowing out of the middle class enables the rise of crony capitalism which leads to a further decline of middle-class prospects. The middle decades of the twentieth century—the heyday of the blue social model—were very good to the middle class. This can be attributed to strong economic growth, more people getting more and better education, limited competition abroad, and perhaps, though conservatives would dispute this, a more progressive tax policy. These factors no longer prevail. As Peck describes it:
America’s classes are separating and changing. A tiny elite continues to float up and away from everyone else. Below it, suspended, sits what might be thought of as the professional middle class—unexceptional college graduates for whom the arrow of fortune points mostly sideways, and an upper tier of college graduates and postgraduates for whom it points progressively upward, but not spectacularly so. The professional middle class has grown anxious since the crash, and not without reason. Yet these anxieties should not distract us from a second, more important, cleavage in American society—the one between college graduates and everyone else.