Posts tagged with: Crony capitalism

Blog author: jcarter
posted by on Wednesday, March 26, 2014

Many who reject capitalism in favor of some “third way” do so because they often mistake it for government-corporate cronyism, says Jonathan Witt in this week’s Acton Commentary. But in countries that have begun extending true economic freedom to the masses, capitalist activity has already lifted hundreds of millions of people out of extreme poverty.

Happily, a new piece in The Economist magazine offers some helpful medicine for the confusion, insisting on the distinction between cronyism and capitalism while also pointing to some hopeful signs that a rising middle class around the globe is gaining the clout to fight the power structures that still wall millions out of the wealth creation game. My reservation about the article is that it misreads America’s Progressive era, and in the process, leaves cronyism’s favorite trick unexposed.

According to the piece, crony capitalism in America “reached its apogee in the late 19th century, and a long and partially successful struggle against robber barons ensued. Antitrust rules broke monopolies such as John D. Rockefeller’s Standard Oil. The flow of bribes to senators shrank.” Later, it tells readers that while developing countries are making progress against cronyism, “governments need to be more assiduous in regulating monopolies.”

The full text of his essay can be found here. Subscribe to the free, weekly Acton News & Commentary and other publications here.

Comedian Andrew Heaton uses the move “Dallas Buyer’s Club” to explain economic issues, brought to life on the silver screen. Enjoy!

facebook_ad_large_1On-demand ride-sharing services such as Uber and Lyft are on the rise, allowing smartphone users to request cab drivers with the touch of a button. But though the services are popular with consumers and drivers alike, they’re finding less favor among their taxi-company competitors and the unions and government bureaucrats who protect them.

Calling for increased regulation, entrance fees, and insurance requirements, competitors are grappling to retain their privileged, insulated status. In Miami-Dade County, an area with particularly onerous restrictions and regulations, Diego Feliciano, president of the South Florida Taxicab Association, argues that the change is bound to “ruin the very thing it’s trying to improve,” all because it threatens the fat cats who pay his salary, and who can afford to jump through the regulatory hoops. “When looking at new technologies,” he writes, “we must also be sure people’s basic civil rights and the safety of the riding public are protected.”

Bringing these petty municipal battles into the limelight, actor Ashton Kutcher, an early investor in Uber, recently appeared on Jimmy Kimmel Live, decrying “antiquated legislation,” “old-school monopolies,” and “old-school governments” who continue to stand in the way of innovation and consumer demand. In areas like Miami, Kutcher says, there is a “Mafioso mentality” against letting the “new guys” in.

Indeed, as Miami’s Feliciano aptly demonstrates, the protectionist mindset only sees what is, viewing economic activity in static and self-centered terms, and failing to recognize or value the type of opportunity and possibility that comes with increased freedom and ownership. Feliciano claims that he’s interested in “safety” and “basic civil rights,” but the only folks being protected are those with power and pocketbooks. (more…)

A recent report from the CBO contains an appendix detailing updated estimates of the labor market effects of the Affordable Care Act (ACA). Pundits for and against the ACA have wasted no time in putting their own particular spin on the projections. Republicans and some other opponents have seemingly celebrated the idea that these estimates may show that the ACA is “a job-killing, economy-crushing villain,” while Democrats and some other supporters have claimed that in times of high unemployment, it’s “an economic benefit” that some will be voluntarily reducing hours or dropping out of the labor force because that means greater demand for labor — those currently unemployed would therefore have more options.

So who’s right? These are mutually contradictory claims, or so it appears. The report is ultimately limited and mixed, but nevertheless raises some serious concerns, caused, in part, by the polarization of Congress both when the law was passed and up to the present. (more…)

Fighting off entrepreneurs! Taking on any threat to their power! Collect ‘em all!

cronyismActon’s Director of Research, Sam Gregg, discusses crony capitalism in today’s issue of The American Spectator. Gregg says 2014 looks to be the year of “inequality” economically-speaking, and that we must not forget the threat of crony capitalism.

Crony capitalism is an expression that’s used a great deal these days, so let’s be clear what it means. Crony capitalism is not criminal activity or outright corruption — though it verges on, and often enters, these spheres. Crony capitalism is about hollowing-out market economies and replacing them with what may be described as political markets. (more…)

healthcare.gov-crash-1As everyone from political pundits to late-night talk show hosts have pointed out, HealthCare.gov, the flagship technology portion of the Affordable Care Act (aka Obamacare), went live a couple of weeks ago — and was a complete failure.

A very, very expensive failure.

Andrew Couts points out that taxpayers “seem to have forked up more than $500 million of the federal purse to build the digital equivalent of a rock.”

Clouts puts that figure in perspective by comparing it to other websites:

Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $500 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.

Why did the government spend a half-billion on the equivalent of a 404-page? Because of crony capitalism. Mike Masnick lists the political cronies who were hired to build the site despite having a “long history of screwed up giant IT projects”:
(more…)

At Forbes.com, Jerry Bowyer interviews George Gilder on his new book Knowledge and Power (HT: AOI Observer). The long Q&A, titled “George Gilder Has A Very Big, Economy Boosting Idea” is very much worth a read. Here’s a snip:

Jerry: “So the market system is the operating system at best, but it’s not the user. That the entrepreneur uses an operating system called the market economy: there’s hardware to it, there’re rails and canals and buildings and factories; there’s software to it, in the sense that there’s operating system software equivalent to DOS or Windows or Linux or whatever, but that thing just lies there dormant until a user sits down at the keyboard and starts changing things, and that user’s the entrepreneur.”

George: “That’s right. And those operating systems themselves in turn were generated by other inventors and entrepreneurs and programmers. Every logical scheme and every machine requires an oracle, as Turing put it. The only thing Turing could say about that oracle, and he italicized it, is that it cannot be a machine. A machine is an orderly system, and all information is disorder; it’s disruption; it’s surprise.” (more…)

Blog author: ehilton
posted by on Thursday, August 8, 2013

Is greed really good? Does self-interest equal sin? Samuel Gregg takes on these questions at Aleteia.org, in an excerpt from his new book, Tea Party Catholic: the Catholic Case for Limited Government, a Free Economy and Human Tea-Party-Catholic-196x300Flourishing.

In many ways, the free economy does rely upon people pursuing their self-interest rather than being immediately focused upon promoting the wellbeing of others.

One response to this challenge is to recognize that fallen humanity cannot realize perfect justice in this world. ‘We can try to limit suffering, to fight against it’, Pope Benedict wrote in Spe Salvi, ‘but we cannot eliminate it.’[v] This Christian truth helps us to understand, like Saint Augustine, that what fallen humanity can achieve ‘is always less than we might wish.’[vi]

(more…)

In his bestseller, Throw Them All Out, Peter Schweizer declares, “The Permanent Political Class has no sense of urgency to change because, for them, business is good.”

Schweizer, who is interviewed in the latest issue of Religion & Liberty, appeared today on the Mike Huckabee radio show to talk congressional insider trading. Schweizer told Huckabee that “Big government creates big profits for people that are in power.”

Schweizer added that this is not a partisan problem but a human problem that reflects the fallen nature of man. Listen to the full audio of the segment below.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.