Democrats and businessmen, sitting in a tree ... big corporations love free enterprise, as long as it isn't too free.

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Big business is lining up to support President-elect Obama's plan to stimulate the economy with the biggest spending spree on roads, bridges and other infrastructure projects since the Eisenhower administration.

--THE HILL, DEC. 8, 2008

The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.

--GENERAL ELECTRIC CEO JEFFREY IMMELT, IN A LETTER TO STOCKHOLDERS

This is a great start. There are things we don't like about it. But there's time to discuss all that.

--BILLY TAUZIN, CEO OF THE PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA (PHRMA), ON BARACK OBAMA'S HEALTH-CARE PLAN

HONESTY and marital necessity require me to state that everything I know about prostitution I have learned from a distance. That said, based on what I've gleaned from reading and from films of dubious artistic value, it seems to me that the farther you move up the prostitution price range, the more elaborate the lies become. A streetwalker trolling the docks during Fleet Week has little opportunity for self-rationalization, elaborate rituals, or ornate fictions. She never asks that drunk petty officer from Manila, "Do you love me?"; nor does she wonder why he never calls or writes. We all know what she's selling, and we're under no illusions about the fact that it's for sale. Sure, for an extra $25, she might pretend to enjoy it, but ultimately, the cheaper the cost, the cheaper the lies.

The same holds true, I suppose, with many areas of commerce. A trip to a four-star restaurant involves lots of ritual, to heighten the richness of the experience. The ambiance surrounding the purchase of a McDonald's Happy Meal, meanwhile, isn't markedly different from the atmosphere at Home Depot when you buy a toilet brush.

But it's prostitution that lends itself best to varying degrees of deception. Tony Soprano's "gumars" always expected to be treated better than the slatterns in the backroom of the Bada Bing Club. And, no doubt, the late French president Francois Mitterand--who fathered a second family with one of his many mistresses--was no stranger to ornate fictions either. As the costs rise, the compliments become more sincere. The relationships grow not only more complex but more reciprocal--and, most of all, the real lies aren't what the hookers tell the johns, but what both parties tell themselves.

That's something to keep in mind as we watch the spectacle of American big business and the Democratic party seducing each other once again.

Visit any college campus, any Georgetown salon, any sweaty left-wing netroots comment section, or any space sufficiently accursed to have both Nancy Pelosi and a microphone in it, and you will be informed that the Democratic party stands up to corporate fat cats. President Obama spent much of the last two years denouncing the stranglehold that corporate interests have on American politics. "They don't represent ordinary Americans, they don't fund my campaign, and they won't drown out the voices of working families when I am president." "Right-wing and corporate forces," the former director of advocacy for MoveOn.org writes in The American Prospect, "will do everything they can to block our agenda on things like universal health care and climate change." It's not just that they tell the world this stuff; they tell it to themselves. Former senator John Edwards--in many ways a cornpone Mitterand--was probably sincere when he said over and over again that he's been preparing his whole life to fight big corporations in behalf of the one of his "two Americas" that doesn't live like him. It's quite easy to imagine his saying words to that effect every morning in front of one of the countless mirrors in his 28,000-square-foot home.

The self-deception can be total. Go to your local used-book store and dig up a copy of Robert Reich's Locked in the Cabinet. In his memoirs of serving as Bill Clinton's labor secretary, Reich recounts his experiences fighting the malefactors of great wealth who were determined to undermine progressive policies. In one scene he details how he stood up to the bad guys at a meeting of the National Association of Manufacturers. He described a room not unlike a 19th-century men's club, billowing with cigar smoke and filled with hostile robber barons booing and cursing him. In another vignette, a furious right-wing congressman shouted "Evidence!" at Reich as he made his case for a more "progressive" economic policy. Then there was the time former House Republican leader Bob Michel confessed that Newt Gingrich and company "talk as if they're interested in ideas, in what's good for America. But don't be fooled. They're out to destroy. They'll try to destroy anything that gets in their way, using whatever tactics are available."

It was all dramatic--nay, heroic--stuff. Except none of it happened--none of the drama or heroism, at least. Jonathan Rauch checked the videotapes of the meetings and hearings and it was all as real as a teenage boy's tale of his super-hot swimsuit-model girlfriend who, alas, can't make it to the prom because she lives in Canada. When confronted, Reich said, "Look, the book is a memoir. It's not investigative journalism." "Did you just make them up?" Rauch asked. Reich snapped, "They're in my journal," adding, "I claim no higher truth than my own perceptions."

THEN there's big business. The story corporate America tells itself is that it's the living embodiment of the American Dream. They're for free markets and competition and pull-yourself-up-by-your-bootstraps individualism. They stand opposed, on high principle if nothing else, to government intrusions into the marketplace. If they get involved in the filthy business of lobbying government, it's to protect themselves from the Fabian succubi of the Leviathan state, which is always desperate to drain the lifeblood of entrepreneurialism from the American Way. "As the voice of business," explains the U.S. Chamber of Commerce's website, "the Chamber's core purpose is to fight for free enterprise before Congress, the White House, regulatory agencies, the courts, the court of public opinion, and governments around the world." Their mission statement is even more high-minded: "To advance human progress through an economic, political and social system based on individual freedom, incentive, initiative, opportunity, and responsibility."

The problem with both stories is that they are exactly that--stories, self-esteem boosters that businessmen and liberals repeat not so much so they can respect each other, but so they can respect themselves in the morning. It defies all the data. As NATIONAL REVIEW's Kevin D. Williamson recently noted ("Losing Gordon Gekko," March 9), in the last two election cycles, big Wall Street firms gave more to Democrats than to Republicans. Democrats also led in most other big-business sectors. One explanation of this is that businessmen are opportunistic and their money follows political power. While largely true, this is hardly evidence that big business is steadfast in its free-market principles.

This tendency goes far beyond campaign contributions. Leaf through various editions of Patterns of Corporate Philanthropy and you'll find that corporations have always given overwhelmingly to left-leaning non-profits that agitate for anti-business policies. "There are few phenomena so remarkable today," William Simon wrote in one such report in 1988, "as the seemingly relentless determination of America's largest business corporations to set aside a portion of their earnings for the benefit of their enemies."

In his book The Suicidal Corporation, journalist Paul Weaver famously recounts how he left his job at Fortune to work for Ford's public-affairs department. Excited to champion a great American company and "defend American capitalism," Weaver was dismayed to discover a level of dysfunction that makes the cast of Dilbert seem like the Green Berets. Eager to rebut a largely bogus safety campaign against the Ford Pinto, Weaver suggested contacting a friend at the Wall Street Journal to see if they might run an editorial defending the company. To the pros at Ford, this was crazy talk. Better to just roll over for the lawsuits, issue a mealy-mouthed denial of wrongdoing, and hope that the whole controversy would go away. Alas, it wouldn't. Finally, the public-affairs chief held a contest for the best idea on how to deal with the controversy. The winning idea? Let's sponsor the PBS show Washington Week in Review! Why? Because everyone knows that funding smarmy PBS shows silences the Left. Just ask Bill Moyers.

LIBERTARIAN philosopher Roderick Long puts it well: "There's a popular historical legend that goes like this: Once upon a time (for this is how stories of this kind should begin), back in the 19th century, the United States economy was almost completely unregulated and laissez-faire. But then there arose a movement to subject business to regulatory restraint in the interests of workers and consumers, a movement that culminated in the presidencies of Wilson and the two Roosevelts." As Long notes, there's a right-wing and a left-wing version of this fable. The right-wingers are desperate to restore the economic idyll of the 19th century, before the New Deal messed everything up. The left-wingers congratulate themselves for their early victories over the evil forces of Big Business. But, they say, the battle is far from over and they must continue to slash away at the hydra-headed beast of corporate capitalism. Nice stories, but they're not true. As the historian Gabriel Kolko and others have shown, the railroad magnates of the 1870s and 1880s petitioned the government to protect them from the headaches of "cutthroat competition" and relentless rate wars. Were it not for the railroad lobby, there never would have been the Interstate Commerce Commission, which liberal reformers conceived of as the bane of those evil railroad monopolists but was actually their citadel. In 1907 AT&T was having a dickens of a time dealing with the fact that other phone companies had the effrontery to compete against it. To solve this vexing problem, AT&T president Theodore Vail cajoled state governments and the feds to let AT&T become a nationwide monopoly. In 1909 Andrew Carnegie was so plagued by competition that he floated the idea of "government control" of the steel industry in the pages of the New York Times. In 1911 the chairman of U.S. Steel, Judge Elbert Gary, told Congress: "I believe we must come to enforced publicity [socialization] and government control ... even as to prices." As Adam Smith said, "people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

In high school, I had to read Upton Sinclair's The Jungle, which was presented to me as nothing less than a full-throated indictment of capitalism and big business, the former being the petri dish for the latter. Thank goodness for Sinclair's muckraking yarn about Jurgis Rudkus, we were led to believe; otherwise those evil meat companies would still be selling us ground-up Lithuanian factory workers in our foot-long hotdogs. Yet the truth is that those evil meatpackers asked the government to step in. Sinclair himself admitted as much. "The Federal inspection of meat was, historically, established at the packers' request," Sinclair wrote in 1906. "It is maintained and paid for by the people of the United States for the benefit of the packers." A meat-industry spokesmen told Congress back then, "We are now and have always been in favor of the extension of the inspection, also of the adoption of the sanitary regulations that will insure the very best possible conditions." Kolko concurs: "The reality of the matter, of course, is that the big packers were warm friends of regulation, especially when it primarily affected their innumerable small competitors."

THAT'S the key to the tawdry relationship between big business and big government. What big business likes about big government is that it clears the field of those pesky smaller, more nimble and entrepreneurial competitors--you know, the actual free marketeers. Government meddling takes much of the guesswork out of business. Think of big utilities. In exchange for letting the government set their rates, they never have to worry about rivals. Profit margins are guaranteed and predictable. History records no instance where the CEO of an electrical utility missed a tee time because a competitor suddenly unveiled an exciting new product.

Likewise, what big government likes about big business is that it's easier to deal with. When the economy is run by a few giant firms, you always know whom to get on the phone. If you've got a social or economic policy to implement--affirmative action, employer-provided healthcare, the Americans with Disabilities Act--it's much easier to work with giant companies that can afford to pass the costs of compliance on to their customers. It's particularly easy if you're on a first-name basis with the CEOs because you've sat on panels with them--and Bono and George Clooney--in Davos and Aspen every winter and summer. Remember when Hillary Clinton was warned that her health-care plan would destroy countless smaller businesses and she responded with a shrug: "I can't go out and save every undercapitalized entrepreneur in America"? Why should she bother? It's not like those people go to Renaissance Weekend.

Liberals routinely invoke Teddy Roosevelt as a hero for his trust-busting ways as president. For example, in a debate just before the New Hampshire primary, John Edwards railed about how big gas, drug, and oil companies and other "entrenched interests" were "literally stealing our children's future." "Teddy Roosevelt, a great American president--he didn't make deals with the monopolies and the trusts. Teddy Roosevelt took them on, busted the monopolies, busted the trusts. That's what it's going to take." Left out of the story is the fact that TR and pretty much the entire Progressive establishment changed their mind after Roosevelt left office. "The effort at prohibiting all combination has substantially failed," TR explained. "The way out lies, not in attempting to prevent such combinations, but in completely controlling them in the interest of the public welfare." The credit for TR's intellectual evolution from anti-monopolist to monopolist should go to Herbert Croly, the godfather of the Progressive movement and founder of The New Republic. "Cooperation" was Croly's watchword. "It should be the effort of all civilized societies to substitute cooperative for competitive methods."

This has largely been the substance of liberalism ever since, though that's not what liberals tell themselves or the world. The New Deal was a riot of cartelization in which big business and big government worked mercilessly to squeeze out smaller firms from the economy. Trade associations were invited to write the regulations they most desired. Amity Shlaes's The Forgotten Man has reminded a whole generation of the story of the Schechters, illiterate Jews whose family's kosher-chicken business was destroyed by the Roosevelt administration in the name of efficiency. They ran afoul of the National Recovery Administration's Code of Fair Competition for the Live Poultry Industry because they allowed customers to select their chickens prior to slaughter (a way of letting the consumer, not the bureaucrats, provide quality control). Initially, the Schechters were sentenced to multiple jail terms for their heinous crimes.

This was no random anecdote. Famed lawyer Clarence Darrow was tasked with evaluating the New Deal codes and found that in "virtually all the codes we have examined, one condition has been persistent.... In Industry after Industry, the larger units, sometimes through the agency of ... [a trade association], sometimes by other means, have for their own advantage written the codes, and then, in effect and for their own advantage, assumed the administration of the code they have framed." As the historian Dixon Wecter put it: "The principle ... seemed to be: to him that hath it shall be given."

AND now we have Barack Obama, who is constantly compared to both Abraham Lincoln and Franklin Roosevelt, and who relentlessly invokes Lincoln's "investment" in railroads and FDR's New Deal as precedents for his ambitious agenda. We certainly haven't had a president more rhetorically antagonistic to corporate power since FDR. But just because Obama talks dirty to big business doesn't mean he dislikes it. For starters, the supposedly anti-corporate community organizer has been working tirelessly to save the auto industry. His debt to big labor is obviously a major factor, but it sure does seem that while Democrats have problems with successful corporations, they will do anything to save dying ones.

Or take his energy plan, which is meant to liberate the American people from the stranglehold of something or other. Timothy Carney, author of the indispensable book The Big Ripoff, recently recounted the ways in which Obama's cap-and-trade plan will enrich General Electric. "Reviewing their lobbying filings, you might think you were looking at Al Gore's agenda," Carney writes in the DC Examiner. GE spent nearly $20 billion on lobbying in 2008 on such action items as the "Climate Stewardship Act," "Electric Utility Cap and Trade Act," and the "Global Warming Reduction Act." Why? Because GE has set up a business to sell carbon credits.

There's only one possible hitch: They might as well have set up a pixie-dust commodity exchange if Obama doesn't suddenly start charging Americans for their CO2. So it's worth remembering that in 2007 GE's subsidiary NBC devoted more than 150 hours of programming to "Green Week," in which every program in its line-up, from Sunday Night Football to The Biggest Loser (no, not the taxpayer, the weight-loss reality show), incorporated anti-climate-change messages into its scripts. On Days of Our Lives a couple had a lovely green wedding. GE wasn't being leftwing, mind you; it was merely being a "good corporate citizen." One shudders to think what the Left would say if Fox dedicated 150 hours to pro-life messages in its programming.

Then there's Obama's health-care plan. On March 5 he assembled all the major industry players. "We're going to get some kind of an agreement here," promised Tom Donahue of the U.S. Chamber of Commerce, "whether it's two-thirds of what everybody wants or three-quarters of what everybody wants or who knows. If you don't get in this game ... you're on the menu." So much for that bit about fighting for free enterprise; staying off the menu is so much more important. Former Rep. Billy Tauzin, now the head of PhRMA--the trade association for those allegedly evil drug companies--is foursquare behind universal government-backed health care and praises Obama's plan because it provides "$650 billion spent to better insure Americans for the products we make." So it's clear that big business will abandon its virtuous attachment to the free market if the price is right.

THE point here is not to say that liberals secretly love corporate America, any more than the Masters of the Universe privately yearn to be the sugar daddies of the nanny state. But American corporations are, if anything, operationally liberal. Milton Friedman and Joseph Schumpeter both thought capitalism's weakness was that it couldn't fend off the mores of an anti-capitalist culture. More generally, business considerations often dictate the adoption of "progressive" policies, and that's not always a bad thing. When Budweiser's August "Gussie" Busch bought the St. Louis Cardinals in 1953, he was annoyed by the Brooklyn Dodgers' perennial success, which was attributable in large part to Jackie Robinson. He asked team executives how many blacks they were cultivating, and when they said "none," he was appalled. "But we sell beer to everyone!" he exclaimed. The next year the Cardinals had a black first baseman, Tom Alston.

For good or ill, family-oriented Disney was a trailblazer on gay rights in the 1990s, providing partnership benefits to its employees. Fortune 500 companies are certainly far more pro-affirmative-action than the House Republican caucus. While some companies are not yet onboard the climate-change bandwagon, you can be sure their marketing departments spend a lot of time and energy keeping it a secret. Indeed, while I can think of scores of companies eager to be associated with one leftish social or cultural issue or another, it's hard to think of a single one (other than privately held Koch Industries) that's keen on being perceived as right-wing at all--beyond a general commitment to "support the troops."

Meanwhile, what about us conservatives (and libertarians)? We're constantly being denounced as right-wing apologists for big corporations, but in reality we're like the longsuffering wives who make excuses for our husbands, even though they let us down time and time again. At the same time, we're constantly hearing from strategists who insist that the answer is to loosen up, baby--become more socially liberal while staying fiscally conservative. The key problem is that fiscal conservatism, whatever its merits, isn't economic conservatism in the free-market tradition of Hayek, Friedman, Reagan, et al. As a generalization, when people say they are fiscal conservatives but social liberals, what they are really saying is that they are, simply, moderate liberals. Olympia Snowe, Susan Collins, Arlen Specter, and the rest aren't socially conservative, and they aren't economically conservative either.

The perverse irony here is that most social conservatives tend to be economic conservatives as well (though one could say George W. Bush was socially conservative and fiscally liberal). Reaganite, pro-life conservatives also tend to be Reaganite free-marketers. Phil Gramm, the greatest deregulator of the last 20 years: pro-life. Ron Paul, the libertarian crusader: pro-life. Christine Todd Whitman and Colin Powell: They're pro-choice and pro-activist-government.

The really odd part about it all is that full-spectrum conservatives greatly outnumber the socially liberal crowd--yet they're supposed to be the problem. They--heck, we--enter the party as cheap dates and in due course become battered spouses. We make apologies for CEOs who don't care what we think, and we never complain about the ingratitude of institutions we support. We fight for free-trade agreements and tax cuts, and they repay us time and again by jumping into bed with Barack Obama. And they don't even bother to wash off the smell of his cologne.