Department of Cronyism

Politicians' decisions rest on political pressures. So how could a Department of Business be a good idea?

You know what could really help the economy? A huge new bureaucratic department in Washington, that's what.

President Barack Obama, a man who recently asserted that the "free enterprise system is the greatest engine of prosperity the world's ever known," intimated that once he secures a second term in office, he would appoint a Secretary of Business to manage a newly-merged, but still unnamed, agency that would offer Americans that top-down guidance they never asked for—a homeland security for cronyism, if you will.

"We should have one Secretary of Business, instead of nine different departments that are dealing with things like giving loans to SBA or helping companies with exports," Obama explained in an interview with MSNBC's "Morning Joe." "There should be a one-stop shop."

The Department of Business promises to do to business what the Department of Education has done for education. It's the sort of idea that sounds like it adds efficiency but actually offers the opposite. The larger context of the idea comports well with the president's belief that a healthy private sector is healthiest when relying on the dedicated technocrats.

But as a political matter, it promises results. If Mitt Romney, for instance, loses the election over Ohio and the president's auto bailouts, a handout that allegedly saved one in eight jobs in the Buckeye State, politicians will surely have re-learned an invaluable lesson: the more taxpayer money you spend, the more votes you earn.

And if winning elections means funding busy work at a union-run money pit or keeping a pleasing sunflower-logoed company afloat via a stimulus package, imagine what an entire agency giving out favors could accomplish? On the surface, a consolidation of a bunch of agencies sounds like a bright idea, but there is, as you know, plenty of room for mission creep in the pretending-to-do-good business. With 54 former lobbyists (according to Timothy Carney of the Washington Examiner) in the Obama Administration, it, no doubt, has a keen sense of what the business world is looking for — handouts.

But the most obvious pitfall of a Council for Mutual Economic Assistance, or whatever it'll be called, is that it would further institutionalize the absurd notion that government can foresee what consumers desire and then "invest" accordingly. When Obama talks about "jobs of the future" he means jobs the government will subsidize because people who vote for him like the sound of it. The more they fail, the more it will have to "invest." It's not about what you want, it's about you need.

If the Obama Administration was an investment house, it would have tanked long ago. Its record on green energy is horrid. It has heaped federal loans and subsidies onto coal-powered electric cars—an "investment" that "will not only reduce our dependence on foreign oil,"Obama said in 2009, but "put Americans back to work." Hardly. The Chevy Volt's been a tepid seller, at best, and without taxpayer subsidizes few could afford a $100,000 compact car. Toyota, the world's largest carmaker, has stopped mass production of a new sub-compact iQ plug-in. Toyota executive Takeshi Uchiyamada recently explained that, "current capabilities of electric vehicles do not meet society's needs, whether it may be the distance the cars run, or the costs or how it takes a long time to charge."

Does government care if ethanol or a windmill meets society's needs? Does it care about cost? Uchiyamada risks stockholder investments—real investments—while politicians' decision-making rests on political and ideological pressures. So how could a Department of Business be a good idea?