You Can't Change the Game by Changing the Players
During
the Bush Administration, Democrats routinely castigated the President
and Republicans in Congress for using their power to reward friends in
the business world. Some of this criticism veered into conspiracy
theory territory, but much of it was valid. President Barack Obama was
elected on a promise to end these types of political shenanigans.
Considering pending legislation that would penalize Fed-Ex in order to
favor UPS, someone in the Obama administration should remind his
Congressional allies of the President's promise to change Washington as
we know it.
The problem centers on a provision in the Federal Aviation Administration reauthorization that would apply the National Labor Relations Act (NLRA) to FedEx Express. As is often the case in Washington, this seemingly innocent change is being pushed by parties that will benefit from it. Specifically, UPS and the Teamsters have convinced their Congressional allies to support it in an effort to hurt FedEx Express.
Currently FedEx Express is governed by the Railway Labor Act, which is the law that applies to airline-based businesses like FedEx Express (85% of its goods are shipped by air). UPS, which ships around 85% of its goods by truck, is governed by the NLRA, which applies to ground-shipping businesses. Ignoring this distinction, the House of Representatives passed legislation that would, in the eyes of many observers, cripple the ability of FedEx Express to maintain its reliable service. This is an important issue for Ohio's 2,100 FedEx Express employees.
This dispute between UPS and FedEx is only the latest in a long line of incidents where one company tries to give itself a competitive advantage not through serving customers better but through manipulating the political landscape to hurt its rivals.
Some will chalk this up as another example of unfettered corporate greed. Certainly those at UPS who decided to push for this legislative provision bear blame for the anti-competitive outcome that would result. However, these businesses are only doing what is common for businesses to do: seizing their opportunity to beat their rivals.
The real problem is with the politicians who have the power to grant the desires of the executives at UPS. Only politicians can direct the coercive powers of government to serve the ends of a corporation. Without this government backing, neither UPS nor FedEx would be able to compete in any other way except trying to serve customers better.
When favors to corporations were being handed out by Republican politicians, liberals pointed to the fact that the GOP is supposedly the party of business, so it's natural Republicans would reward their allies. The way to change this "corporatocracy," as some called it, was to throw out the Republicans and install the Democrats in power.
Today, you can't get much more powerful than the Democrats in Washington, D.C. A popular Barack Obama is President, there is a filibuster-proof majority in the Senate, and the House of Representatives is firmly run by Nancy Pelosi. The party of business is gone, so why is UPS on the verge of getting a huge gift from Congress?
When you have a government that oversees a vast regulatory state affecting every business in this nation, you are going to see businesses intensely interested in the decisions made by that government. In fact, you will see businesses doing all they can to ensure the government's decisions benefit them. When a 230-word provision in the FAA reauthorization legislation would hobble one business to benefit another, it's clear that businesses would be foolish to ignore what happens in Washington, D.C.
You can't change this type of behavior by changing which party is in power. Both Democrats and Republicans will fight to protect industries that are important to their states and their campaign coffers. The only way to change the corporate influence in politics is to reduce the amount of power government has over our lives.
It will be decided this week if the FAA reauthorization bill will contain the provision that hurts FedEx Express. Regardless of the outcome of this fight, though, there will be many more instances of corporations looking to use the political process to harm their rivals. It's a game that will go on as long as we allow politicians so much power over our economy and our lives.
Marc Kilmer is a policy analyst with the Buckeye Institute for Public Policy Solutions, a research and educational institute located in Columbus, Ohio.
