Crony capitalism

The auto industry bailout — a classic case of crony capitalism

Featured image Peter Schweizer, in the Washington Times, helps expose the auto industry bailout for what it was — “a classic tale of cronyism, in which the well-connected sped away with big bucks.” In this instance, the “well-connected” can be found mainly in the world of Big Finance: In his recent book “Bailout,” the former special inspector general for the Troubled Asset Relief Program, Neil Barofsky, points out that when it came »

Why Cronyism Isn’t Capitalism

Featured image Our friend Justin Folk collaborated with Andrew Klavan on this excellent video, which explains the 2008 financial collapse in entertaining, understandable and accurate fashion. It is called, “Picking Losers, Why Cronyism Isn’t Capitalism.” »

Why Cronyism Is Always Bad

Featured image In today’s Wall Street Journal, Charles Koch explains concisely why corporate cronyism, a hallmark of the Obama administration, is bad–not just when it’s the other side’s cronies, but bad, period: “We didn’t build this business—somebody else did.” So reads a sign outside a small roadside craft store in Utah. The message is clearly tongue-in-cheek. But if it hung next to the corporate offices of some of our nation’s big financial »

“I Want To Be A Crony!”

Featured image There once was a time when American children dreamed big. They wanted to build things, create things, achieve things, cure things. Do such ambitions make sense anymore? In today’s America, aren’t our children learning how much better it is to be a tax spender than a taxpayer? Cynical people have always said that connections are more important than talent and hard work, but until now, it wasn’t true. Now, in »

Banks, too big for our own good?

Featured image If there’s one big issue that arises continuously and vexatiously in American history that issue, I submit, is not race but banks. To be sure, the Republican Party owes its formation to slavery, which the Party’s first president abolished. But the formation of two bitterly opposed parties — Democrat and Whig (predecessor to Republican) — had nothing really to do with race, and plenty to do with banks. In any »

China: Don’t Look Now, But. . . (Updated)

Featured image It’s been a while since we last updated the “China: Don’t Look Now, But. . .” series (you can find the previous three installments here, here, and here), but a terrific op-ed in today’s Wall Street Journal by Joseph Sternberg suggests that China has finally succumbed to the “greater fool” theory, as evidenced by its recent decision to buy A123 Systems, the ailing, Obama-backed (which means taxpayer-backed) car battery company »

Jay Cost explains the Democrats

Featured image Many of our readers are familiar with Jay Cost based on his work at Real Clear Politics and then at the Weekly Standard. As good as that work is, I had no idea that Cost had a book in him like Spoiled Rotten: How the Politics of Patronage Corrupted the Once Noble Democratic Party and Now Threatens the American Republic. This book, in part, is an excellent survey of the »

Harry Reid promotes crony capitalism, with Chinese cronies

Featured image The Washington Free Beacon reports that Senate Majority Leader Harry Reid has been working to secure sweetheart deals for Chinese green energy firms. Specifically, Reid reportedly has been pulling strings behind the scenes on behalf of ENN Mojave Energy, a Nevada subsidiary of the Chinese-owned ENN Group. After more than two years of secret negotiations beginning in 2009, lawmakers in Clark County, Nevada agreed to sell 9,000 acres of public »

Tales from the Public Sector

Featured image Once upon a time conservatives agitated to privatize the U.S. Postal Service.  But hardly anyone on the right cares about the Post Office any more for the simple reason that technology has enabled us to go right around it: we use faxes and emails to transmit documents, pay our bills online, and send packages by UPS or FedEx.  (By the way, when the fax machine was first being brought to »

Crony capitalism and Obama’s big new national defense idea

Featured image In his speech to the VFW today, Mitt Romney derided President Obama’s defense policy as follows: “When the biggest announcement in his last State of the Union address on improving our military was that the Pentagon will start using more clean energy – then you know it’s time for a change.” Romney might have added that Obama has used his “clean energy for the military” policy to line the pockets »

Ungrateful business leaders fail to reciprocate Obama’s largesse

Featured image The Washington Post’s Zachary Goldfarb complains that corporate America has failed to show sufficient gratitude to its friend Barack Obama: President Obama has repeatedly embraced three titans of American commerce, General Electric, Boeing and JPMorgan Chase, showering their chief executives with praise and adopting policies that benefit the companies. . . Yet these companies — from the C-suite to the rank and file — have shown little enthusiasm for the »

Is the Holder Justice department letting Wall Street off the hook?

Featured image Attorney General Holder has come in for constant and largely deserved criticism from conservatives. The complaints cover plenty of territory: the Fast and Furious scandal, including the subsequent stonewalling; the bright idea of holding a trial of the 9/11 mastermind in New York City; the attacks on state laws designed to help with immigration enforcement; the efforts to promote voting fraud by attacking laws designed to prevent it; the decision »

Payoffs Vs. Layoffs

Featured image That is the Romney campaign’s theme for this week, and it is a powerful one–as we have noted many times, the Obama administration has used the stimulus bill, its “green” energy initiatives and other programs to enrich its campaign donors and political allies. The Romney campaign released this ad, “Political Payoffs and Middle Class Layoffs,” today: The theme is an important one, but the execution, in my opinion, needs improvement. »

Why government bestowal of economic privileges is pathological

Featured image Matt Mitchell, a senior research fellow at George Mason University’s Mercatus Center, has written an important paper called “The Pathology of Privilege: The Economic Consequences of Government Favoritism.” We have discussed such favoritism, which also goes by the names “crony capitalism” and “corporatism,” from time to time. But Mitchell’s paper provides an economic analysis and unified theory of the phenomenon. What are the privileges that governments bestow on particular firms »

Looking for the Real Bank Robbers

Featured image The financial world has its knickers in a twist right now over the fact that Barclays Bank in Britain (and perhaps/probably up to 20 others others, including former golden bank J.P. Morgan) attempted to manipulate the LIBOR (London Inter-Bank Offered Rate) market, which is the hinge rate affecting something like $800 trillion-worth of financial instruments.  (Can that number–$800 trillion—possibly be right?  It is the figure The Economist cites.)  Gee—bankers trying »

Crony caplitalism, American capitalism, and the Fourth of July

Featured image From Elizabeth Spahn at the FCPA blog: Highly intelligent, sophisticated, successful. I think he was of Indian ancestry, or maybe Pakistani? A modern Canadian citizen; executive of a Fortune 10 corporation responsible for North American operations for the British based corporation, first in its market position. He is a major player. “Crony Capitalism.” Isn’t that what American capitalism is? We were into our third glass of very fine red wine »

Crony Capitalism and Defense Spending

Featured image Today, I visited one of my favorite post-retirement haunts, the American Enterprise Institute, to hear a speech by Ashton Carter, the Deputy Secretary of Defense. Carter spoke on a wide range of defense issues, but the very first substantive point he made was that, in the current budgetary environment (and quite apart from the prospect of sequestration), Congress should not be forcing pet projects and systems on the Department of »