By Edward Woodson
Cronyism is not new in America. It’s been here since before the United States. British taxes and tariffs were intended to protect business back home. Even after the Revolution, the first act of the newly minted Congress of the United States was to pass a tariff intended to protect domestic producers. Throughout our nation’s history, granting crony benefits to those close to government has been a bipartisan affair. Nevertheless, the Obama administration has unapologetically taken cronyism to new historic heights.
Immediately upon taking office President Obama violated his own ban on hiring lobbyists and began filling his administration with executives from his favorite industries who rapidly began writing and influencing policy. Then came the spending. Despite repeatedly decrying “corporate welfare,” Obama and Democrats in Congress have given hundreds of billions of dollars away to politically allied corporations and industries from green tech companies run by donors to the ever loyal unions. They even risked the Web portal driving their most prized legislative achievement, Obamacare, to a sole source contract with cronies.
Where companies like Solyndra and Fisker have received a great deal of attention, another Democrat-allied industry has quietly, and sometimes secretively, been reaping rewards from the croniest-of-them-all administration – Hollywood and the Big Content Industry.
The digital age has taken its toll on Big Content. Rather than change and innovate to meet the times, Big Content has sought to prop up an outdated business model using the force of government. Last year, the Obama Department of Commerce released their Internet Policy Task Force Privacy Green Paper that vocally endorsed a key item on the Recording Industry Artists of America’s (RIAA) wish list – the imposition of a performance tax on all songs played on the radio. Around the same time this paper was released, legislation was introduced into Congress that would implement this tax and grant a government-backed monopoly to a handful of record label executives to set the price of royalties. The bill would actually outlaw any one-on-one free-market negotiations between radio stations and record labels.
The administration has also supported another of the industry’s cherished goals – criminalization and censorship of the Internet. Administration-backed legislation known as the Stop Online Piracy Act (SOPA) would have granted government the power to shut down websites based exclusively on accusations of copyright infringement from the industry. A groundswell of opposition in the tech community eventually defeated SOPA, but the industry and administration haven’t given up.
The same Green Paper that supported performance royalties also revived administration support for the provisions contained in SOPA and calls for felony criminal punishments for unauthorized streaming of copyrighted material.
A recently leaked draft of a secretive trade deal currently being negotiated reveals that the administration is willing to put those words into action and even circumvent Congress to deliver the industry’s wishes. The Trans Pacific Partnership (TPP) is ostensibly a free-trade deal to spur economic growth by lowering trade barriers with 12 pacific nations. In reality, the trade deal is jammed full of corporate special-interest giveaways with Hollywood getting good and plenty.
Along with extending copyrights and several other Big Content agenda items, the deal would grant the government the Internet censorship powers in SOPA and the criminal penalty provisions recommended in the administration’s Green Paper.
As if the administration’s attempt to go around Congress and grant government new powers via international treaty isn’t brazen enough, the president wants Congress to voluntarily prevent itself from amending any of these crony giveaways. President Obama has asked Congress to confer “Fast Track” status on the deal, which would prevent any amendments when the bill comes before Congress for approval.
It’s not all good for the administrations accomplices, however. The very same administration Green Paper that gives so much to the recording industry is now drawing concern from artists like Steven Tyler and Britney Spears. Politico recently reported that Tyler submitted comments to the Department of Commerce critical of the Green Paper’s recommendation that artists be forced to allow use of snippets of their music in other music, also known as sampling. This recommendation is ostensibly made to promote mash ups and remixes – and benefit a different part of the industry.
Such is the double-edged sword of cronyism. What the government giveth, it can taketh away.
Free-market economists have said for generations that political freedom and economic freedom are inexorably linked. So, the same expansion of government and political power that has enabled Obama’s historic cronyism is the same power and cronyism Tyler and Spears apparently now fear. It is absolutely the power that many Americans fear and the cronyism that is destroying our economy and free-enterprise system.
Edward Woodson is the host of “The Edward Woodson Show,” which airs weekdays 7-8 a.m. on WZAB Miami and in Phoenix, Ariz., on KFNX News-Talk Radio 1100 Live 5-6 a.m. MT.