Sunday, June 15, 2014

Rent-Seekers Fear Cantor's Loss: The Cantor Effect for Businesses and the G.O.P.

The New York Times reports:
The day after Representative Eric Cantor became the first congressional leader in modern times to lose his seat in a primary, one of the biggest aftershocks occurred not on Capitol Hill or in the sprawling Richmond suburbs he has represented for more than a decade but on the New York Stock Exchange.

The share price of Boeing tumbled, wiping out all the gains it had made this year, a drop analysts attributed to the startling defeat.

While he was often an adversary to both the Tea Party and Democrats in Congress, Mr. Cantor, a Republican and the House majority leader, was also a powerful ally of business big and small, from giants like Boeing to the many independently owned manufacturers and wholesalers that rely on the federal government for financial support.

His loss at the hands of David Brat, a Tea Party-inspired economics professor who campaigned on throwing corrupt Wall Street bankers in jail, railed against crony capitalism and insisted that immigration reform would only reward lawbreakers, spurred business leaders to mobilize to preserve their clout in Congress.
Some people are beginning to question food stamps for big business. No word yet on this story from General Electric's PR guy Erza Klein at General Electric's outlet. Attention Boeing executives: if your business model relies on rent-seeking , stealing money from taxpayers has diminishing returns at some point.