The NYT Passed on the Tea Party; Now Its Passing on Atlas Shrugged

One pleasure in reading the New York Times is its movie reviews. They leave few stones unturned, covering everything from major releases to obscure foreign films. The New York Times has passed on Ayn Rand’s Atlas Shrugged (unless I missed something). This reminds me that NYT was the last mainstream-media newspaper to deign to mention the rascally and radical Tea Party.

Atlas’s only NYT mention appears to be Maureen Dowd’s “Atlas Without Angelina” in her Sunday, April 17 Op-Ed section. Dowd tells us that Obama’s “we’re all in this together, that we look after each other” philosophy would be “antithetical to Rand’s idea man,” that Paul Ryan’s “pushing the cost of Medicare and Medicaid onto the old, the sick and the disabled while rewarding insurance companies with bigger profits, would be more up her alley,” and that she need not waste her time on Atlas Shrugged because P. J O’Rouke (that noted film critic!) had already panned it.

Rand, Dowd tells us, was dead wrong. She failed to see that capitalism would “evolve into a vampire casino where you could bet against investments you sold to your clients, and make money off something you didn’t own or that existed only on paper.” She then goes on to rehash the NYT 2007 story about a Democrat movie producer, who failed to get Rand’s permission to make Atlas into a movie because she wanted artistic control. Rand made a good decision, in my view. Dowd ends with the implication that Atlas Shrugged is a waste of time because it is supported by the Tea Party and Sean Hannity.

A NYT film critic would indeed be troubled by Atlas Shrugged’s cheerleading for unfettered capitalism and individualistic entrepreneurs and its railing against Washington. He or she would, at long last, share conservative discomfort with the standard Hollywood rendition of a caring liberal President protecting us from snarling Republican killers of the poor, weak, and infirm.

Ayn Rand was the first and only major writer to spin readable stories about the rent-seeking society. Dowd believes that the “fiscal meltdown” proved Rand false. Viewers of Atlas Shrugged, however, will see that Rand’s half-century-old account captures dead-on today’s suppression of (evil, greedy, and unpatriotic) entrepreneurs, the private-government “partnerships” (GE and the federal government), and the buying and selling of political influence that characterize our world today.

The NYT may choose to ignore an Atlas Shrugged as beneath their dignity, but it may turn out to be a rallying cry in the 2012 election. If so, the venerable NYT has again missed the boat.

NYT’s Expose: But GE Is Doing Exactly What is Expected of Them (Subtitle: Jeffrey Immelt is James Taggart in Ayn Rand’s Atlas Shrugged opening on April 15)

President Obama’s appointment of GE CEO Jeffrey Immelt as his job czar signaled his “move to the center.” The pro-business President declared a “government-business partnership” to create jobs, green technology, and other good things. Now a NYT investigation reports that GE paid no U.S. taxes, aggressively lobbied Congress for subsidies and sweetheart deals, and spends millions (billions?) to minimize its tax bill. The NYT was shocked, as was Claude Rains in Casablanca, to find such skullduggery, from GE, no less. The NYT concludes that one of the most striking advantages of GE is not its jet engines and washing machines but “its ability to lobby for, win and take advantage of tax breaks.”

Written to buttress the case against reductions in the corporate tax rate, the NYT investigation unwittingly strikes a deeper vein --- that GE is faithfully pursuing Obama’s vision of, what is called in other countries, crony capitalism. Under this philosophy, “crony corporations” should follow where government incentives lead them. If Obama wants green jobs, they will build windmills, with healthy subsidies of course. If the government wants more lending, crony corporations will lend with a bailout if the loans go bad. A “green car” should be no problem. The government will pick up most of the price tag for leery consumers. Insofar as crony corporations, like GE, can “negotiate” their tax bill with Congress, they are a ready source of campaign contributions or other perquisites.

Such crony capitalism changes the normal rules of economics. Those who play the “business-government partnership game” better than others win. Those who do not play well lose, even if they are superior entrepreneurs or innovators.

From an economic perspective, it is not even clear that GE is a real “winner.” In pursuing subsidies and tax advantages, GE engages in activities that yield lower returns than other alternatives. The government payoff compensates them for making otherwise unwise economic decisions. The GEs of the world also have to waste enormous resources on the lobbying game.

If we factor in all these economic costs and losses, GE may have been better off not playing the crony capitalism game after all. The public, surely, is made worse off by the misallocation of resources and other economic losses.

The NYT’s disclosures, coupled with Obama’s appointment of Immelt, are an embarrassment, but they offer a rare backroom glimpse of crony capitalism in action. Our crony capitalism takes place, respectably and legally, in board rooms, in congressional and executive offices, or “on bended knee” before Charles Rangel. In other less civilized countries, it takes the form of shakedowns, threats of violence, and arbitrary prosecutions, but the game is played with the same results. In Russia, it is called State-Mafia capitalism. In the U.S., it is corporate welfare.