Bloomberg News reports 9/2/14: Former [Republican] House Majority Leader Eric Cantor landed a $1.2 million job at the investment bank Moelis & Co., pulling down more money than his Tea Party-backed opponent spent defeating him in a Republican primary.
The base salary for “providing strategic counsel” to the firm: $400,000. He’s set to receive an “initial cash payment” of $400,000 and $1 million in stock, according to the company’s filings with the Securities and Exchange Commission.
Next year Cantor’s “minimum incentive compensation” will be $1.2 million, plus $400,000 in stock. The company also will pay for Cantor to live in a “reasonable” New York apartment.
“Eric’s judgment and tremendous experience will expand the capabilities our team brings to clients around the world as he has unique expertise in assessing complex situations and crafting innovative solutions,” Ken Moelis, chairman and chief executive officer of Moelis & Co., said in the company release.
It won’t be the first payment Cantor has received from Moelis — the firm’s chairman donated $2,600 to his campaign in April.
Now there are two ways to interpret these facts.
One way is to say, “That greedy no-good politician. He’s exploiting his power and is now cashing in on it, at the expense of the little guy.” This will probably be the majority view, certainly with most Democrats and Independents, and probably with some Republicans as well.
How about a more objective view? How about this: Government should not be involved in business, in the first place. If government stuck to its original Constitutional role of police force and upholder of private, voluntary contracts, then there would be nothing for a former Congressman to gain by entering the private sector. Since government wouldn’t be interfering in the private sector in the first place, a former Congressman’s “pull” would not be relevant. The ex-politician would have to make his own way, just like anybody else.
It is true that a “progressive” Democratic Congressman doing the same thing as Cantor would not merit a whimper from our media and academic establishment. However, the problem is deeper than a partisan double standard. The problem is a widespread antipathy towards capitalism.
One reason for this antipathy towards capitalism is that most people think profit and self-interest are always and automatically wrong — or at least morally suspect. Psychologically, this syndrome is referred to as unearned guilt — i.e., feeling guilt for something that isn’t wrongdoing (e.g. making $100, or a billion dollars, honestly and without fraud or coercion.) Ideologically, the root cause is the false belief that we are all our brother’s keepers, and that our only worth in life consists of selfless service to others.
Another reason for this antipathy towards capitalism is that people think this instance of a former, powerful politician benefiting from the private sector is the fault of capitalism. But when you’re talking about state-business interactions, deals and “partnerships,” you’re not talking about capitalism. Technically speaking, in the language of economics, you’re talking about a hampered market economy, or a “mixed economy.” It’s a mixture of socialism and capitalism, trending towards socialism. Whether you think the “third way” of a mixed economy is a viable and necessary thing or not, that’s what you’re talking about — not capitalism.
We have to stop blaming capitalism for things that are not capitalism. When you look at Eric Cantor — you Democrats and Independents out there, in particular — don’t blame him for the alleged failures of capitalism. And don’t think that’s what he advocated while in Congress, either. Like most Republicans (and like all the Republicans in positions of power), they don’t advocate anything close to real capitalism. That’s part of the reason he was defeated in his primary, despite his powerful position in Congress. These Republicans endorse the mixture of capitalism and government controls, all the while evading, denying and minimizing the questionable benefits that some business people gain from that mixture (at the expense of those less connected). Democrats do the same thing, incidentally; but Democrats manage to hold the moral high ground, because they constantly condemn self-interest, which in most people’s minds is immoral. (Republicans, by the way, condemn self-interest, in a different way; they apply this condemnation to sex, birth control and personal relationships, rather than to economic relationships.)
Capitalism, properly defined as a complete separation of economics and state, is slowly fading away. In health care and education, the private sector is almost underground. The entire private sector is drowning in regulations and taxation, the very things that make businesses turn to political connections (and former Congressman) for some relief.
In a truly private economy, there would be no such option for private businesses, nor a perceived need — not for the competent ones, at least. In unhampered capitalism, pull is irrelevant. Only achievement and honesty matter, and without those two things one will not survive for long.
The technology field has been the closest we have to capitalism in recent decades — and it’s the only area that has really thrived and grown in any major way. In that field, we have seen the innovation and market-based price reduction that we might have seen in the rest of the economy (college tuition, health care) had the government only stayed the hell out of the way. That tells you something; and what it tells you is that it’s not politicians like Eric Cantor — or Barack Obama, or anyone else — who create prosperity and innovation. Politicians are the obstacles, yet we keep voting in more of them to stand in the way.
“Throw the bums out” is not nearly enough of a solution. We have to end our wrong approach to social and human relationships, in the form of government control of the economy. When the wrong form of government is gone, there won’t be any bums (like Eric Cantor or Barack Obama) left to inflict suffering on us.
Eric Cantor may be gone, but they’re never really gone, not in a mixed economy. Eric Cantor is just one of the “bums” who now benefits from the distorted, inaccurate idea of hands-off capitalism he aided and abetted while in office.
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