The New York Post reports that President Obama’s purpose in including more than 250 business executives in his vast entourage in Mumbai is to promote job-hatching, cross-continental business deals.
Another story, from the New York Times, adds that this export-promoting (and, as others opine, excessively costly, luxurious, even “imperial”) sojourn in Asia is also “an attempt to ease tensions with America’s chief executives, many of whom spent the recent campaign accusing the White House of being antibusiness.”
Donald Boudreaux, a professor of economics at George Mason University, explains why we should take the president’s lavish, “pro-business” pageantry with a grain of salt.
There are two ways for a government to be ‘pro-business.’ The first way is to avoid interfering in capitalist acts among consenting adults – that is, to keep taxes low, regulations few, and subsidies non-existent. This ‘pro-business’ stance promotes widespread prosperity because in reality it isn’t so much pro-business as it is pro-consumer. When this way is pursued, businesses are rewarded for pleasing consumers, and ONLY for pleasing consumers. The second, and very different, way for government to be pro-business is to bestow favors and privileges on politically connected firms. Such favors, such as tariffs and export subsidies, invariably oblige consumers to pay more – either directly in the form of higher prices, or indirectly in the form of higher taxes – for goods and services. This way of being pro-business reduces the nation’s prosperity by relieving businesses of the need to satisfy consumers. When this second way is pursued, businesses are rewarded for pleasing politicians. Competition for consumers’ dollars is replaced by competition for political favors.
Wariness is in order. The president’s grand, “pro-business” display in Asia may result in policies, as Boudreaux fears, “of the second, impoverishing sort.”
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