Donald Boudreaux writes in the Christian Science Monitor:

In [Tuesday] night’s State of the Union address, President Obama urged greater US competitiveness. But there’s a big difference between cozying up to businesses and promoting policies that foster economic growth.

I strongly agree with Boudreaux that what’s good for business is not necessarily good for consumers and for economic growth. While Boudreaux’s focus is on debunking myths, implicitly perpetuated by President Obama’s SOTU, that other countries are out-innovating, out-educating (ok that’s closer to the truth if we are talking K-12; American higher education still attracts the most foreign students, though), and out-building the United States, and on explaining the benefits from trade, the lesson rings true in domestic policy as well.

Tariffs and other import restrictions are examples of pro-business policies. They increase the bottom lines of those businesses that no longer must compete vigorously against foreign rivals. Such pro-business policies are also anti-consumer and anti-market. They rob consumers of choice; they shrink consumers’ spending power by enabling protected businesses to raise prices; and they stymie economic growth, in part by channeling entrepreneurs’ efforts into lobbying government for favors and away from figuring out how to build better mousetraps.

The irony is that such policies – which really should be labeled “crony capitalist” – are often labeled “competitiveness” policies. Because these policies increase the profits of some domestic businesses, they are mistakenly believed to make the domestic economy more “competitive” when, in fact, they make it less so.

Crony capitalism seems to be on the rise for the next two years. From President Obama’s recent meeting with business leaders over his decision to hire William M. Daley as White House chief of staff and to appointing GE CEO Jeff Immelt as chairman of the President’s Council on Jobs and Competitiveness to the President’s SOTU announcements to dole out more money for education (the National Education Association spent over $3 million on lobbying efforts to mostly Democrats in 2010; however,  much more telling are the $9 million spent in 2007 when President Obama was running for President – their highest level by far!) and clean energy, things are looking pretty glum for taxpayers and consumers.