Crony Capitalism, 2010

2009 was the biggest year in history for Washington lobbyists. No surprise there: the Obama administration proposes to steal trillions of dollars from those who are not politically connected, and convey it to those who are. Whether you are playing offense or defense, you need lobbyists.
Michael Barone elaborates: “Under Obama, crony capitalism again rules the day:”

Last week, amid Washington’s blizzards, Obama was asked about the $17 million bonus awarded to JPMorgan Chase Chief Executive Officer Jamie Dimon and the $9 million bonus for Goldman Sachs CEO Lloyd Blankfein.
“I know both these guys; they are very savvy businessmen,” he said. “I, like most of the American people, don’t begrudge people success or wealth.” So much for campaign-trail denunciations of “fat cat” bankers and bloated bonuses.
From what I know, Dimon and Blankfein are in fact first-rate CEOs, as able in their way as Henry J. Kaiser. Their banks soured on mortgage-backed securities before most of their competitors and started unloading them early or, in Goldman’s case, getting them insured by AIG (and getting the government to pay 100 cents on the dollar for them, thanks to Treasury Secretary Timothy Geithner, then head of the New York Fed). They paid their Troubled Asset Relief Program money back as fast as they could, with interest.
But the savviness that Obama handsomely acknowledged has been evident not only in their business judgment but in their politics. Goldman employee contributions to Democrats in 2008 ranked second only to those employed by the University of California. JPMorgan Chase’s employees ranked No. 7. The stereotype of Wall Street being Republican is decades out of date.
Crony capitalism is now the order of the day in the United States. The government and the United Auto Workers own General Motors and Chrysler, which aren’t likely to pay back their billions in TARP money any time soon, if ever. Meanwhile the government tells Americans to stop driving Toyotas.
The government was going to remake the health care sector, and so Billy Tauzin and other health care industry lobbyists were busy in the White House cutting deals to keep their clients above water. The government was going to remake the energy sector, and utility CEOs and lobbyists have been busy flaunting their green credentials.
As my Washington Examiner colleague Timothy Carney has been documenting, Big Business has been busy lobbying Big Government for “reforms” that serve big companies’ interests. Wal-Mart backs a health care mandate, Philip Morris shapes tobacco regulation, General Electric is setting up a joint venture to trade carbon offsets (wasn’t that Enron’s line of work back in the day?).
The picture is not pretty. Government’s pets or, in the president’s words, “savvy businessmen,” use government to get policies that will give them competitive advantages and stifle smaller competitors. Pleasing their masters in government is now absorbing the psychic energy of CEOs who used to concentrate on meeting consumers’ needs in order to make profits.

What we’re seeing is the beginning of a renaissance of National Socialism, thought dead after World War II. Big business, threatened by government, does the logical thing: if you can’t beat them, join them. Big business enjoys government protection against innovation, and in exchange transforms itself into a tool of government control over the economy. Top executives and lobbyists will do very well under a National Socialist regime. The rest of us? In Barack Obama’s world, we don’t count. We aren’t cronies.

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