Hatch dinged as crony capitalism comes under fire

Published: Monday, June 18 2012 9:58 a.m. MDT

Senator Orrin Hatch speaks at the Salt Lake County GOP convention at the Salt Palace Convention Center in Salt Lake City on Saturday, April 14, 2012.

Kristin Murphy, Deseret News

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At a time when the vagaries of crony capitalism are drawing heightened scrutiny, Republican Sen. Orrin Hatch has come under fire for his ties to a failed green energy company in Utah.

According to Tim Carney at the Washington Examiner, Hatch repeatedly sought funds for a company called Raser Technologies, which sought to produce geothermal energy.

The critique of Hatch fits into a larger narrative, as the practice of granting government tax breaks, grants and regulatory exceptions to favored companies has come under fire.

Earlier this year, Solyndra, a solar panels company in California, went belly up after securing half a billion in federal loans. Critics noted that Solyndra's largest investor happened to be a major Obama donor, and the loans were pushed through in the first days of the Obama administration.

The critique shifted from green energy to health care this week, when the Wall Street Journal broke out a pile of emails demonstrating tight connections between the pharmaceutical industry and the Obama administration in framing the new health care law.

After detailing the emails in an editorial, the Wall Street Journal on Monday finished with a note of irony, "At least PhRMA deserves backhanded credit for the competence of its political operatives — unlike, say, the American Medical Association. A thread running through the emails is a hapless AMA lobbyist importuning Ms. DeParle and Mr. Messina for face-to-face meetings to discuss reforming the Medicare physician payment formula. The AMA supported ObamaCare in return for this "doc fix," which it never got."

On Wednesday, Rick Esenberg in the Milwaukie Journal Sentinal cited the standard arguments against government trying to pick winners, including "the notion that, in the absence of a market and the price signals it provides, it is virtually impossible to know which business or technology ought to be a winner."

In his critique of Hatch, Carney reported that "Hatch started trying to send earmarks Raser's way. USA Today reported that Hatch "requested seven earmarks for more than $20 million from 2006 to 2008 to help fund research and development projects for the automotive wing of the company."

None of these earmarks went through, but Raser did receive $33 million in a grant from the Treasury department, according to Carney.

According to a 2011 USA Today report, Hatch's support for Raser was so pivotal that they named their plant in Beaver, Utah, "The Hatch Plant."

In his new book "A Capitalism for the People," economist Luigi Zingales laments the U.S. trajectory on cronyism. "For the U.S., the moment to act is now," Zingales argues, "before the cancer of crony capitalism metastasizes. … It is not too late for the United States, but the clock is ticking. We have already begun to look like Italy. If we don’t do something to stop that soon, we will end up like Greece."

Eric Schulzke writes on national politics for the Deseret News. He can be contacted at eschulzke@desnews.com.

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