Posts Tagged ‘crony capitalism’


May 25, 2016

I came across an op-ed piece in our local newspaper recently by Eliot Cohen. His commentary boiled down to a call for a third-party candidate. He termed Hillary Clinton “easily the lesser evil” and posited that a third-party candidate would send her a message to “govern from the center.”

A bit later in the week I had a brief political sidebar with a patient (this seems to arise more often these days), and he expressed disgust with the current polarization and voiced a similar wish for more cooperation and a move to the center.

Now, I’ve been persistently perplexed by the rise to the top of two deeply flawed candidates who share at least one thing in common: They have the highest unfavorable ratings of the pack. So what would possess the American public to ostensibly rally around their least favored candidates? The call for a move to the center gelled a theory I’d been harboring.

But first, getting back to the patient, I inquired if he were $100,000 in debt, would he reduce his spending to neutral, “governing from the center,” as it were, or would he tighten his belt in an effort to climb the uphill road to fiscal recovery?

For decades now progressive Democrats and Republicans have doubled down on unprecedented “grow and spend” policies that have become so entrenched that much of the electorate cannot imagine a viable alternative. Many have adopted a similar personal fiscal policy, planning little for the future while enjoying the moment. The lines for $5 and $6 dollar Starbucks’ beverages grow even while we hear of increasing joblessness and a shrinking economy. The illusion of the status quo is buttressed by a growing welfare state supported by unprecedented borrowing, printing, and their associated campaign promises.

But the odd bird of an election we’re witnessing reflects an unease that’s starting to ripple across a growing segment of the country: a realization that things are not working. For many, the solution has taken the shape of a call for an outsider; someone who will do something—anything—differently. For some this “savior” takes the form of a blustering, fist-shaking, non-politician who talks a lot about “winning,” with populist catch-phrases in search of elusive policies and substance. For others, it’s the siren call of wealth redistribution, the indomitable phoenix of socialism and its comrade “social justice,” once again rising from the ashes even as the world watches its demise again…and again. And yet others crave a return to the only normal they can fathom after decades of intransigence, just a few more years of comforting printing and spending, and things will eventually work themselves out. This, even if the promises come from someone they don’t really trust…and who might be indicted. Finally, a growing but stunted group made an aborted attempt to place a voice that spoke to the only solution that makes sense: Shrinking government, reducing spending, stopping crony capitalism, and growing the private sector economy. But this messenger was tainted ideologically. Those on the left are conditioned to see this this viewpoint as espoused by narrow-minded bigots who love only corporate fat cats, and many in the center were put off by exhortations weighed down by right-to-life and other perceived religious undertones.

When faced with the knowledge that something must be done and the one obvious solution you’ve been told is evil, cognitive dissonance occurs, and the paradox creates…the Hillarump-Trillary Syndrome. Side effects include mini-riots at campaign stops and spending an inordinate amount of media time distracting oneself with the pros and cons of a minute fraction of the public’s right to choose which bathrooms they may enter.

A third party candidate? Americans have always been an exceptionally innovative people. Given time, I’m certain we can come up with a someone we like even less.



December 10, 2012

I’ve had conversations with parties of opposing views that seem to think a job is a job, whether it be in the public or the private sector. After all, what’s the difference between someone getting a paycheck for a service provided through government employment and that same service through a company in the private sector?


The government, by virtue of its ability to legislate, shields itself from market forces, rather than operating within them. It can, for a while, manipulate the marketplace by printing, borrowing, and stealing (legally, of course, through fees and taxes). Hence the inflated retirement benefits that are driving all our governments at all levels to the brink of bankruptcy. We’re like one big, bloated General Motors, with the exception that no one exists to bail us out if (and I fear it’s when) we fail. Many people have become so used to these ploys that have seemed so successful or decades that they think it can go on forever. They also point to the corruption in the private sector as justification for growing the government slice of the economy, failing to recognize that crony capitalism that aids and abets this bad behavior is government-mediated. How many people in the street really know that the Dodd-Frank legislation, 800 pages of directions for more regulations, defines the big banks as “systemic” and therefore “too big to fail,” providing them with government (read: taxpayer) guarantees? This enables them to borrow at lower rates than their small brethren, giving them the edge they need to perpetuate the precarious status quo. Almost all governmental good intentions have toxic unintended consequences.

The marketplace can be a cruel mistress, but left to its own devices it is self-correcting. Governments can’t beat it. Delaying a tremor only leads to an earthquake down the line. That’s not to say that bad behavior shouldn’t be monitored and punished. Government policy, however, goes well beyond this, trying to manipulate market forces and pick winners and losers. The only real losers, ultimately, are the American people.

Currently, the Democrats and Republicans are fighting over how to deal with the upcoming “fiscal cliff.” In a bygone era the ruling class placed politics above the public good, but were loathe to admit it. In this new, progressive society, they revel in it. To wit: Zerlina Maxwell, a Democratic strategist, has suggested that Republicans put forth their idea for the entitlement cuts, as Democrats have already put their piece, the tax rate increases, on the table. This seems to parallel the president’s approach to date in his dealings with the legislature. The administration taxes the top one percent, a populist move (that generates little revenue), and requires the Republicans to do the heavy lifting—define the unpopular entitlement cuts that must happen if any hope of reversing the economic decline and paying off the burgeoning debt is to occur. This is a politically unbeatable “good parent/bad parent” strategy for the Democrats. One tells the child he can watch TV and play on the X-box and the other makes him eat his broccoli and clean his room. Bad parenting, it seems, wins votes.

It just doesn’t pay the bills.


October 15, 2012

With the ruling class calling so many of the shots, it’s easy to forget that the dynamic is more complex. The government is both slave and master. Because its lifeblood is votes, it needs voters. There are a lot more poor and middle class voters than rich ones, so the quickest way to maintain power is to open the wallet and “spread the wealth” (read: taxes). This constitutes the progressive or socialist face of the government, the redistribution President Obama refers to to give everyone “a fair shot.” But the money has to come from somewhere, so the politicos also cater to wealthy segments of the private sector through grants and tax breaks. This is the crony capitalism face of the government. The left is associated with the former, the right with the latter. Both faces are dysmorphic caricatures of the true face of the government our forefathers envisioned.

The original intent was for individual responsibility and charity at the level of the community and church. Government’s job was straightforward—to protect its citizens from enemies foreign and domestic. By abdicating the latter responsibility and picking winners and losers in the private sector on the one hand and encouraging dependency on welfare on the other, we are losing our identity.

No one, right or left, argues with a safety net for those who need a helping hand or are disabled. We disagree on how low that bar should be set and how long that helping hand should lift those of sound body and mind. No one, right or left, feels Wall Street or corporate America should be given an unfair transfusion of taxpayer money or be excused from paying their “fair share.” We disagree on what that fair share is and what constitutes a business incentive to make us competitive in the world economy.

Both sides pander and both overspend. The choice this election, as I see it, is between a candidate that openly condones it and one that purports to condemn it. Half the country disagrees with me. If the half that shares my view prevails, I think we can begin to climb that long, arduous hill to recovery.

Unless bad behavior, on either side of the political aisle, intervenes.


June 18, 2012

Liberals like to think of themselves as compassionate. It might surprise them to know that conservatives do too. The divide comes in the areas of how we think it should be defined and implemented. Having been on both sides of the divide, I understand it well.

Liberals want to help the underdog by smoothing out real and perceived inequalities in material possession. The more needy the downtrodden and the more insanely wealthy the privileged, the more it fuels their angst. The inescapable truth that a percentage of the most wealthy have acquired it through nefarious means only fuels the sense of being on a righteous crusade. They see government as the means of righting this intolerable inequity. The attendant corruption and crony capitalism are an unfortunate byproduct.

Conservatives want to help the underdog by improving processes. They believe in equality of opportunity, not outcomes. They have seen billions after billions poured into the war on poverty, education, and thousands of often untested government programs with often demonstrably worse outcomes. They subscribe to the maxim, “a rising tide raises all boats,” and believe that the marketplace is smarter than government and must be protected from (sometimes) well-intentioned meddling that not infrequently results in unintended consequences. Conservatives are perceived as favoring the wealthy at the expense of the downtrodden and ignoring corruption when its origin is Wall Street.

When liberal thinking is applied to something such as the illegal (aka “undocumented”) immigration issue, it plays out as concern for a poor, third world nation abutting an economic (hopefully, not soon-to-be erstwhile) giant. It’s easy to make a case for the poor. It’s much harder to make the case that compassion has a cost, and we no more have the ability to single-handedly lift Mexico with its ponderously corrupt government out of poverty than we have the ability to force other nations to adopt the ideology of liberty and democracy through coercion.

Compassion must look beyond individual suffering to the processes that abet it, if there is to be any hope of finding a lasting solution. The old saying, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime,” is as true today as the day it was penned.

It’s time we shuttered the fish store and gassed up the trawler.


June 11, 2012

We’re at a crossroads—or, rather a switch track. Capitalism, the powerful engine of our economy, is losing steam.

First, we’re choking the fuel line. The engine runs off a fuel known as competition. The marketplace is the oxygen that allows the fuel to burn. Anti-monopoly laws were put in place to protect this, but have progressively eroded due to corruption of the public sector by the private sector. The former, motivated by votes (the currency of power), has formed an unholy alliance with the latter, motivated by greed. So where the ruling class should be legislating more, it is doing less.

Second, we’re trying to get the engine to climb a four percent grade. Unlike a real train, capitalism, like a tornado, forges its own path, sparing some and taking down others. However, the critical difference is that the process isn’t random—it rewards success and smites failure. It can be a brutal taskmaster. So the government tries to apply the brakes, its munificent side trying to soften the highs in an effort to mitigate the devastating lows, while its corrupt side, to buy votes, chooses winners and losers. Unfortunately, crony capitalism is inherently more foolish than the real thing, and repeatedly falls victim to the unforgiving Law of Unintended Consequences.

On paper, socialism sounds better. Equality of outcomes, utopia, as extolled in John Lennon’s classic song, “Imagine.” The problem is it only works as advertised when we have a community with a pervasive, powerful work ethic and universal good will. Socialism pointedly ignores the reality of human nature, which is as noble as it is vile. Hence, it always fails.

Capitalism has had a longer, much more wildly successful run than socialism. It’s been so effective that it’s even found an awkward home in China, thriving well enough to turn this anti-American dictatorship into our creditor. The capitalist economy can be cruel and unforgiving, magnanimous and gentle, much like the human spirit. It is also failing, because of the slow erosion of the principles that have guided it to the pinnacle of its success. In the early days of the Industrial Revolution we legislated to inject a little justice into a system we could see favored some unfairly as the expense of others. It seemed to work, so we piled more and more of the same on top, until the engine was pulling much more than it could handle. So where the ruling class should now be legislating less, it is doing more. At the same time, social justice ideologues have tried to stand in the engine’s way in an attempt to derail it.

The next election, I think, will define our net values as a nation. Will we be switching the Tornado Express onto a track leading into miles of uncharted territory, or over a cliff?