Skip to comments.Crony Capitalism Running Rampant
Posted on 09/17/2012 3:42:42 AM PDT by Kaslin
Government help to business is just as disastrous as government persecution... the only way a government can be of service to national prosperity is by keeping its hands off. That is what Ayn Rand has to say about government involvement in the world of business, but the full extent of this practice is difficult to nail down. Tad DeHaven of the CATO Institute investigated the situation to determine exactly how deep the problem runs.
Periodically, CATO analyzes the federal budget to ascertain exactly how much money our government shovels out to favored parties. Unfortunately, over the years both parties have participated in this handoutathon, and, still worse, many businessmen suck up to elected officials to get their share of our money. Nobody disputes that private businesses should build our military armaments, our roads, and our bridges. In fact, more basic governmental services, such as janitorial work or auto maintenance, should be farmed out by competitive bid. Its the rest of the pigs at the government trough that are most troubling.
Corporate welfare is difficult to define, but DeHaven went line by line through the federal budget and found $98 billion of it every dollar of which is listed in his report. The pervasive nature of these crony giveaways can be measured by the fact that every federal department gets into the act. Handouts to solar companies and farm conglomerates get the most publicity, but those are just the tip of the iceberg.
DeHavens background has given him the skills to analyze this information. Most prominently, he worked for Governor Mitch Daniels of Indiana to sort out the mess they found when Daniels took office in January, 2005. DeHaven saw how bad crony capitalism was at the state level and brought that knowledge to his analysis of Washingtons spending.
DeHaven states that the most egregious waste at the federal level is farm handouts, claiming that most farm subsidies go to large corporate interests despite the fact that people think the money goes to family farms. DeHaven stated, It is about vote buying and nothing else.
The report not only enumerates where the money goes, but is sprinkled with great statements such as The federal governments proper role in the economy should be that of a neutral referee, with intervention limited to facilitating the free exchange of goods and services.
Interestingly, both political sides contain elements who rail against these handouts. The leftists known as the Occupy Movement protest loudly against corporate handouts while the Tea Party, which leans right but considers itself non-partisan, complains about handouts in the same manner.
Simply put, the entire problem stems from the size of government. Limitless governments at all levels cause elected officials to develop a philosophy that the money is theirs to parcel out. DeHaven focuses on the federal budget, but similar studies could be done for every one of the states, most counties, and a significant number of cities. We have allowed elected officials to take our money and hand it over to whomever they want; repeat this process frequently enough and they start believing that they have God-given rights.
This attitude has gotten so bad at the local level that mayors and councilmen now believe that there are no limits on what they can do regarding commerce in their jurisdictions. Nothing demonstrates this arrogance more convincingly than the Chick-fil-A controversy, in which the CEOs comment opposing same-sex marriage triggered statements by the Democratic mayors of San Francisco, Chicago, Washington, DC, and Boston that Chick-fil-A stores were not welcome in their cities. These statements, clearly in violation of multiple legal precedents and principles, would never have been made if these cities were not completely immersed in crony capitalism. In vowing to stop construction of a store, Chicago Mayor and Obama crony, Rahm Emanuel, stated Chick-fil-A values are not Chicago values. Without being emboldened by the reality of crony capitalism, he would never have uttered words so insulting and arrogant.
DeHaven has given us a report that defines how costly, on more than one level, crony capitalism has become. The Left despises handouts to corporations, and believes that conservative legislators are owned and operated by large, private companies. Conservatives believe it bloats government and destroys the concept of free enterprise by allowing government wonks to decide winners and losers. The question then remains: Who supports this practice other than the people who get to hand out other peoples money?
DeHaven does not feel hopeful that we can dismantle federal crony capitalism. Handouts are becoming more limited at state levels because of the economic reality of reduced revenues. Municipalities that face budget crunches are often forced to stop the practice. Maybe with a Vice-President like Paul Ryan, we have at least a ray of hope shining on us.
DeHaven does not feel hopeful that we can dismantle federal crony capitalism.
It starts with electing candidates that despise this process. That means voting against anyone supported by the elites of either party.
Crony Capitalism is woven into the fabric of our society dating back to the 1800’s. There was always some politician with his hand out and somebody willing to buy a favorable business environment via legislation. The modern day version is just nice and legal via campaign financing. It’s just who we are.
Simply put, the entire problem stems from the size of government:
I do not agree.
IMO Simply put it comes from the dishonesty and criminal conspiracy among politicians to enrich themselves and entrench themselves in office by giving out contracts to people who buy those contracts with Campaign contributions.
You scratch my back and I will scratch yours.
Posted from my home page:
The only amendment required to return control of our government back to the people.
Amendment XXVIII (28th.)
The government of the people, and by the people, shall not write or allow any law, directive, or regulation that shall cause, or require , any citizen or entity to purchase or utilize the products, methods, or services of any entity or individual.
Politicians will be politicians. Which is to say, the more opportunities to enrich themselves you make available to them, the more venal they will be.
Making government smaller necessarily reduces the power and influence of government -- which in turn reduces the opportunities for politicians to employ their power and influence in the interest of their own pocketbook.
I.e., Smaller Government equals More Honest Government. Plus, given fewer opportunities to cheat, it's easier to police the bastards.
Its just who we are.
It’s not sustainable. It corrupts the entire society.
No one really wants to get rid of the spoils system, both parties want to get into office to get their share.
It’s our own damned fault.
We are enablers.
If you ever vote for an incumbent, YOU are the problem.
Think about it. If no one ever got re-elected, this problem would disappear overnight.
The ULTIMATE in crony capitalism is when government uses its power to condemn huge amounts of land for a highway and then turns it over to a private company to operate and toll at whatever level they please. CATO is ALL FOR that (Robert Poole, in particular), so they have NO CREDIBILITY in this.
Here’s an example: Our laughing stock here in Texas, Governor Perry, did that for a toll road next to Austin. So this Spanish company, Cintra (using US front companies and spokesmen) gets to build and operate (for 75 years) a 50 mile section of highway that roughly parallels I-35 (a freeway, in decent shape, by the way) between Austin and San Antonio. The only problem is that they plan to charge a varying rate that may reach 75 cents per mile...so how do you get drivers there:
1) You have your governor-friend allow a speed limit of 85 MPH on the new tollway, which was in the news a couple of weeks ago.
2) You LOWER the speed limit on I-35 (again, a good quality road in that stretch) from 65 MPH to 55MPH. That wasn’t in the news...but it’s been announced here.
3) You re-designate highway numbers in some way, in San Antonio, to trick people driving to Austin to take I-10 to Seguin (where the toll road starts at its south end), and then they are trapped there and have to use it (or have to double-back 20 miles each way to avoid it). I don’t actually know how that works, but I read about it over the weekend. I’ll be keeping my Texas maps around for comparison.
So what’s in it for Governor Perry. First he gets to keep his posh retirement as a Cintra “adviser” (actually, I don’t know if he has a deal, but that is how Cintra operates). Second, he got $33M for the state from Cintra, for pulling off the above stunts.
This is what Texas has become, with this governor.
Wow, your post was like reading a script from “Dallas”.
Wouldn’t it be great if there were a national well funded group to run ads against subsidies and crap? Maybe we could get corporate support?
So, if the problem can’t be fixed within the system, where does that leave us? Sooner or later people will be hanging from bridges.
“Wow, your post was like reading a script from Dallas.”
I’m no fan of Dallas, but even those guys would NEVER come up with a plot like I mentioned. After all, they have to get viewers, and having a story so far-fetched will just kill their credibility...unless it was true, of course.