Costco exec epitomizes Obama’s love of crony capitalism

Sept. 7, 2012

By Steven Greenhut

Few political observers were surprised that President Barack Obama sees himself as the second coming of Franklin Delano Roosevelt, as he uttered these words at the Democratic convention Thursday night:

“And the truth is, it will take more than a few years for us to solve challenges that have built up over decades. It will require common effort, shared responsibility, and the kind of bold, persistent experimentation that Franklin Roosevelt pursued during the only crisis worse than this one.”

Virtually every Democratic official daydreams about being a modern-day FDR, someone who can use nearly unchecked government power to “save” the citizenry from the ravages of the private sector. Love of government is embedded deep within the Democratic DNA, so much so that media observers were surprised that a corporate executive actually gave a featured convention speech.

As the Huffington Post reported

“[Costco’s] top executives are also aligning themselves with the Democratic Party this election season — a rarity in the retail industry. At the Democratic National Convention Wednesday night, Jim Sinegal, the co-founder and former CEO of Costco, plugged President Barack Obama’s investment in education and affordable energy, as well as his immigration policies.”

Despite the apparent disconnect, having Jim Sinegal at the DNC is no more of a surprise than seeing Joe Biden there also. Costco is not an aberration in its support for the Democratic platform. It is, in fact, the embodiment of the kind of pliant, government-subsidized corporation that Democratic leaders prefer these days.

I’ve tussled with Sinegal in the past, back when his company was strong-arming local governments in Southern California into using eminent domain to clear away properties to make it easier for Costco to expand. Costco offers some great merchandise, but its success is built as much on special governmental privilege as it is on hard work and ingenuity. The company takes millions of dollars in subsidies from local governments chasing sales-tax revenue.

Mercantilism

As I wrote in the Orange County Register in 2002:

“Costco, the big-box discount warehouse company that sells everything from big-screen TVs to restaurant-quality food products, at first glance seems like a marvel of the free-enterprise system. … But think carefully before you use the words ‘free enterprise’ and ‘Costco’ in the same breath. The company certainly knows how to market goods and services to budget-conscious customers and to maximize profits. Unfortunately, Costco also is adept at manipulating the political process on its own behalf, in a way that smacks of mercantilism (government-controlled markets) rather than capitalism.”

I wrote about Costco’s “unholy scheme to deprive Cottonwood Christian Center of its 18-acre property in Cypress.” The Wall Street Journal also blasted the retailer in an editorial, which exhorted the privilege-seeking Costco to “buy their land in the open market instead of relying on local governments to seize a juicy location at below-market prices.”

“Rather than feel ashamed at its role in this land heist, Costco President and CEO Jim Sinegal fired off a letter to the Journal, published June 12, that echoed the city’s shameless demonization of Cottonwood,” I wrote. While Sinegal basically denied direct involvement in this horrendous property-rights-abusing scheme, his denial wasn’t credible.

“But if Costco is just an innocent bystander in a dispute between a city and a church, then why has Costco been involved in similar situations across the country?” I asked. “Such as in Lancaster, Calif., where in 2000 a federal district court struck down the city’s attempted use of eminent domain on Costco’s behalf. According to the court documents, immediately after a competitor, 99 Cents Only Stores, moved into a vacant store next to Costco in Lancaster in 1998, Costco demanded that the city use eminent domain to literally give the 99 Cents Only space to Costco. Otherwise, Costco said it would move to neighboring Palmdale.”

It seems fitting that the main corporate speaker at the Democratic convention comes right out of the crony-capitalism school of business. It seems fitting that it uses its muscle to arm-twist cities into taking others’ property and into filling its coffers with tax dollars.

Despite the childish anti-market rhetoric used by those union members who are ubiquitous in Charlotte, the free market is simply a system for exchanging goods and services. In such a system, individuals get to make choices. Not every business is good or fair, but in this system everything is about voluntary exchange. When individuals commit fraud or theft, that’s where government has a role – as a sort of referee. When the government allows individuals to invest and enjoy the fruits of their labor, the economy is more likely to grow.

Government as an end

Democrats — or at least the ones featured at the DNC — do not believe simply in using government to uphold the rule of law and protect against fraud and abuse. They believe in government as an end in itself, even though every cent it spends is taken from someone else.

They want government to meddle in the marketplace, by creating rules that favor those businesses preferred by the political class, often in the name of some high purpose such as “equality” or “protecting the environment.”

In fairness, both parties have shovel favors toward their favorite firms. Even the Solyndra boondoggle had roots in the Bush administration, which started the loan process. But Obama officials seem particularly committed to bailing out private firms and unable to make distinctions between the free market and private companies that use their connections to win government cash and favors.

It’s no wonder someone such as Jim Sinegal is more comfortable with Democrats than with Republicans, who despite their many flaws at least recognize the importance of a freer economic system.

The FDR shtick is all about rhetoric, but the Sinegal speech says more about the state of the modern Democratic Party. At least if Obama wins another term, more of us can get jobs pushing carts at Costco.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity. He is based in Sacramento. Write to him at [email protected]

His book on this topic, “Abuse of Power: How Government Abuses Eminent Domain,” can be purchased on Amazon.com.

(This article was cross-posted from Watchdog.org.)

 

22 comments

Write a comment
  1. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 7 September, 2012, 09:35

    Greeny– Costco alligns itself with the dems this year because they, like many of us American patriots, see the tired old policies of the repubs as a huge part of how we got in this mess. And as to FRD rhetoric, well maybe. And, so?

    Reply this comment
  2. Queeg
    Queeg 7 September, 2012, 09:51

    Build a bigger badder tank.

    Older tanks sell to Middle East sweethearts.

    Pants on fire…..they may clog the Straits of Hore-Moose.

    Fists waved, saddles thrown.

    Older tanks beat up on older tanks. Stale-Mate!

    Repeat from top!

    Reply this comment
  3. Rex the Wonder Dog!
    Rex the Wonder Dog! 7 September, 2012, 11:06

    Greeny– Costco alligns itself with the dems this year because they, like many of us American patriots, see the tired old policies of the repubs as a huge part of how we got in this mess.
    ==
    Steve-any chance we can ban Teddy and his sock puppets???

    Reply this comment
  4. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 7 September, 2012, 12:26

    Rex Poodle– what a coward you are. YOU jave been banned from at least 2 blogs I know of and now just because you disagree with me you want the Greenmiester to ban me? Sad. Be a patriot little fella, stand up for free speech like me and El Greeno!

    Reply this comment
  5. Bill - San Jose
    Bill - San Jose 7 September, 2012, 12:44

    Steve is right. Seizing of assets below market value has always been against what this nation was founded around: private property rights.

    Anything in the way of a municipality stealing from one party and assigning it to another party is blatantly unconstitutional in my book.

    Reply this comment
  6. Queeg
    Queeg 7 September, 2012, 13:45

    I read the Atlantic frozen salmon label…..at Costco….

    It came from PERU!!!!!

    Even Poodle, Donkey Paul and I think BobA know either a country or an ocean is dislocated in this picture!

    Reply this comment
  7. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 7 September, 2012, 14:20

    Queeg— Not too sure what tjhey actually “know” up there in Adelanto.

    Reply this comment
  8. Rex the Wonder Dog!
    Rex the Wonder Dog! 7 September, 2012, 17:22

    Teddy, you were just BANNED from Calpensions, and as a favor I was going to ask Ed to let you back on…….. sorry Charlie, not now. So sad, too bad.

    Reply this comment
  9. Rex the Wonder Dog!
    Rex the Wonder Dog! 7 September, 2012, 17:23

    Anything in the way of a municipality stealing from one party and assigning it to another party is blatantly unconstitutional in my book.

    That was 100% true-right up until City of New London v Kelo was decided by that crazy right wing faction of SCOTUS………………….

    Reply this comment
  10. The Amazing Ted System
    The Amazing Ted System 7 September, 2012, 20:43

    Hey Poodle — How come you never post over there at CP any more? Want ME to talk to someone?

    lol

    oh my– had to take ya out little buddy!
    sorry!

    Reply this comment
  11. Rex the Wonder Dog!
    Rex the Wonder Dog! 8 September, 2012, 01:27

    Hey Teddy, aka Uhaul, AKA Queeg— How come YOU!! never post over there at CP any more? Want ME to talk to Ed?????

    lol

    oh my– had to take ya out little buddy!
    sorry!

    I can get you back on if you worship me… like the lil punk you are 😉

    Reply this comment
  12. Queeg
    Queeg 8 September, 2012, 07:14

    Poodle I am over you- your pitifully over!

    Reply this comment
  13. Rex the Wonder Dog!
    Rex the Wonder Dog! 8 September, 2012, 11:23

    Hi Teddy! 🙂

    Reply this comment
  14. Ventura Capitalist
    Ventura Capitalist 8 September, 2012, 18:13

    Second coming of FDR? So that means TWELVE more years?

    Think about it: We found out from the birth certificate lawsuits that no one has standing to enforce the Constitution. That would include the 22nd Amendment.

    Think about it.

    Reply this comment
  15. The Amazing Ted System
    The Amazing Ted System 8 September, 2012, 18:51

    Poodle– Are you taking your meds?

    Reply this comment
  16. Rex the Wonder Dog!
    Rex the Wonder Dog! 8 September, 2012, 21:36

    Teddy- I think I can get you back on CalPensions……

    Reply this comment
  17. Willis
    Willis 9 September, 2012, 07:03

    The more the US economy stalls, unemployment stays high, wages retreat
    the greater the opportunity for the Costco’s of this world.
    Jim Senegal benefits from the current climate. Any wonder his support for Obama.
    He could care less if people suffer, as long as they shop at Costco.
    One more point: FDR failed to revive the economy of the 1930’s.
    The effect of the “stimulus measures” of that era were wearing off,
    becoming ineffective (sound familiar) and by 1938 the economy was
    beginning to sink once again.
    World War Two ended the depression.

    Reply this comment
  18. The Amazing Ted System
    The Amazing Ted System 9 September, 2012, 08:53

    LOL Poodle– How will you get me on there when you got you the boot? Hmmmmmmmmmm……lol

    Reply this comment
  19. Queeg
    Queeg 9 September, 2012, 09:08

    Costco can do whatever it wants to do. You don’t have shop there and gorge watching Ronald Reagan speeches!

    Reply this comment
  20. Rex the Wonder Dog!
    Rex the Wonder Dog! 9 September, 2012, 21:39

    Teddy YOU got the boot, Im still there lil buddy 😉

    Reply this comment
  21. Rex the Wonder Dog!
    Rex the Wonder Dog! 9 September, 2012, 21:39

    Hey teddy what did u do with uhaul????

    Reply this comment
  22. Ted Steele, The Decider
    Ted Steele, The Decider 10 September, 2012, 06:48

    I look for your posts every day at cp? Hmmmmmmm lol—- sorry little buddy!

    Reply this comment

Write a Comment

Leave a Reply


Tags assigned to this article:
Barack ObamaCostcoJim SinegalSteven Greenhut

Related Articles

Assemblymember to consider value of breasts in workers comp

Asm. Lorena Gonzalez, D-San Diego, will hold an informational hearing on Tuesday titled “Establishing the Evidence Based Value of Women’s

A Brief Quarrel With Briefs

Anthony Pignataro: Those guys over at the California Senate Office of Research have it pretty good. It’s a non-partisan shop

Covered California continues to benefit from cheerleading media

Monday’s “deadline” for signing up for the Affordable Care Act triggered bad headlines for the federal health exchanges, which had