Posts tagged with: Crony capitalism

Acton’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…)

As 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…)

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 Flourishing.

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.

Today’s new rich is the “government rich” according to Peter Schweizer. Massive centralization of money, resources, and regulation has allowed our public servants and many big businesses to thrive. The poor, new business start ups, the taxpayer, and the free market are punished. Washington and corporate elites profit from the rules and regulations they create for their own benefit and their cronies. As daily news reports currently reminds us, Washington is a cesspool of corruption and abuse of power.

It’s a moral crisis, and it’s the title for our interview with author and Hoover Institute Fellow Peter Schweizer. “I would say some of the biggest enemies of the free market today in America are big corporations,” declares Schweizer.

Jordan Ballor looks at two different versions of religious liberty that expresses freedom from religion that was modeled in the French Revolution and freedom for religion within America’s revolution in his feature, “Principle and Prudence.” The article was also published in Renewing Minds, a publication of Union University.

Stephen Schmalhofer offers a review of Sam Gregg’s Becoming Europe. There is also an excerpt of Faithful in All God’s House titled “Work and Play” by Gerard Berghoef and Lester DeKoster. Faithful in All God’s House is newly edited and reissued by Christian’s Library Press. The book was originally published as God’s Yardstick in 1982.

The “In The Liberal Tradition” figure is Clare Boothe Luce. Kris Mauren, Acton’s executive director, offers an important explanation on why R&L publishes the “In the Liberal Tradition.”

You can read more about the issue in my editor’s notes and be sure to check out all of the content here.

In The Examiner, Tim Carney asks, “When do 21 Republicans senators vote for higher taxes? Answer: When the biggest businesses and local politicians hire top K Street lobbyists to push for the tax-hike legislation.”

A few weeks ago I wrote about how government and big corporate collusion decreases market fairness. NPR had a great write up explaining why Amazon is one of the main culprits pushing for expansion of online sales taxes.

Carney explains how former Mississippi Senator and Republican Majority Leader Trent Lott has his hands all over the Market Fairness Act. “Governors all over the country, have been active in saying this is a states’ rights issue for them,” said Lott. The states’ rights argument is that the federal legislation would fully empower governors and state legislatures to collect sales taxes for online purchases.

Carney adds:

Republicans’ aversions to taxes and regulations are often rooted in a desire to be “pro-business.” Once Wal-Mart and Amazon join hands, pro-business Republicans were happy to support legislation leading to higher taxes…

So there’s the formula for winning Republicans over to a tax-hike bill: combine a states’ rights argument with a K Street all-star team representing the biggest businesses in the industry.

In the next issue of Religion & Liberty, author Peter Schweizer talks about cronyism and sheds additional light on Washington’s moral failing to tackle the problem. You can find a preview of that interview on the PowerBlog.

After being sentenced to federal prison in 2001 for racketeering, Louisiana’s former governor Edwin Edwards, long famous for his corruption and political antics, humorously quipped, “I will be a model prisoner as I have been a model citizen.” In his 1983 campaign for governor against incumbent David Treen, Edwards bellowed, “If we don’t get Dave Treen out of office, there won’t be anything left to steal.” The kind of illegal corruption once flaunted by Edwards is on the decline. There is less of a need. Legal corruption in government is more prevalent and easy enough to secure. (more…)

Rev. Robert Sirico was recently featured in El Salvador’s newspaper El Diaro de Hoy. Consuelo Interiano interviewed him about the free market, and social mortgage.

Sirico begins by saying that private property isn’t just important for businesses to thrive, it’s absolutely necessary for their existence. He goes on to say that businesses and private companies are the best way to help individuals escape poverty. Companies, large or small, create opportunities for work and offer individuals a means to elevate themselves out of poverty.

John Paul II said the Church “has consistently taught that there is a ‘social mortgage’ on all private property.” For those not familiar with the term ‘social mortgage,’ it refers to the conditions under which people may use God’s creation.  In other words, if you have private poverty you have a duty to be productive with it. Sirico responds to this by saying that the free market is a means to productivity and therefore social mortgage. He explains that one should not assume that the Catholic Church promotes socialism or communism.The duty of social mortgage falls on the shoulder of private property (which does not exist in these economic systems). He  goes on:

My defense of the free market is not a defense of crony capitalism, not a defense of mercantilism, not a defense of banks or entrepreneurs who buy the courts, who buy the states, because these people act exactly against the free market.

Rev. Sirico bases his explanations of the free market and the role of businesses on the book of Genesis. It says that human beings were created in order to exercise creativity and rule over all of creation.

To read the full article in Spanish, please visit ElSalvador.com.

Brian Burrough has a mostly enjoyable New York Times review of a book that’s mostly positive about my native state’s mostly small-government formula for economic growth. Some excerpts:

Ms. Grieder, a onetime correspondent for The Economist who now works at Texas Monthly, and a Texan herself, has written a smart little book that … explains why the Texas economy is thriving. It’s called “Big, Hot, Cheap and Right: What America Can Learn from the Strange Genius of Texas”….

What might be copied, Ms. Grieder indicates, is the so-called Texas model — that is, a weak state government with few taxes and fewer regulations and services. It would be far harder to replicate the state’s civic DNA, which features traits that can be traced to its decade, beginning in 1836, as a stand-alone nation (independent, suspicious of Washington), the late-1800s cowboy era (self-reliant, fraternal) and the 20th-century introduction of oil and entrepreneurialism (pro-business, skeptical of government)….

Outside writers have been regularly caricaturing the state since the novelist Edna Ferber introduced America to postwar Texas with “Giant” in 1952. The canon ranges from “The Super-Americans,” by John Bainbridge (1961), to “As Texas Goes … : How the Lone Star State Hijacked the American Agenda,” by Gail Collins, a New York Times columnist (2012). Ms. Grieder’s is the rare book that takes stock of the Texas model without ridiculing many of its traditions and politicians.

My one concern is that the book’s author seems enamored of Gov. Rick Perry’s crony capitalist strategy of using subsidies to attract companies to the Lone Star State, a habit that is anything but small government and likely to come back to bite. On the whole, though, the book and the book review appear to give far more props to low taxes and limited government than I thought possible for a work endorsed in the pages of The New York Times. Maybe there’s hope for those city slickers after all.