crony capitalism

Don’t feel sorry for Eric Cantor: Ex-House leader stands to do well working as a lobbyist

Former House leader Eric Cantor couldn’t wait to quit Congress after the 11 years he spent in the leadership were unpredictably brought to a close after his loss to economics professor Dave Brat.

He couldn’t wait to get his hands on the money the private sector wanted to offer for his expertise, either. At least that’s now former colleagues and aides have been suggesting.

According to Politico, the move to simply quit Congress four months short of his official departure plays well into a possible shift into the private sector. By leaving now, Cantor doesn’t have to offer any details to the public on what companies he’s been considering to work for.

Close allies and friends claim he was ready to move on the day after his loss.

Sadly for us, people like Cantor often move out of Congress to continue to work on shaping policy, but from the outside. Whereas in 1974, about 3 percent of retiring Senators found a job with some lobbying firm, about 50 percent of Senators today are able to successfully quit Congress to become lobbyists.

The presence of a Senator in a firm’s lobbying team is valuable because, over time, former lawmakers are able to use their contacts, meaning more access to means of tilting policies toward what the firm’s clients have in mind.

It’s about time: There is an alliance emerging between the Right and the Left to defeat cronyism and end corporate welfare

 The Emerging Left-Right Alliance to Dismantle the Corporate State

There many, many things on which Occupiers and Tea Partiers or progressives and libertarians disagree, but Ralph Nader says that there is an alliance forming between the left and the right against corporate welfare and crony capitalism.

Nader, a four-time presidential candidate, recently spoke at the Cato Institute about his most recent book, Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State. He chatted with Caleb Brown about the premise of his book on the Cato Daily Podcast and, perhaps unintentionally, turned into a discussion about campaign finance law.

“Corporate power without government power would have to adhere to market disciplines,” said Nader. “With government power, they can overcome market disciplines. Wall Street damaging Main Street. Big Business damaging small business.”

“I’ve often said that half of what Washington does is an accounts receivable, shoveling out goodies on the backs of taxpayers to business interests,” he continued. “I think even good programs excrete waste. It’s the nature of bureaucracy. It’s, by the way, corporate bureaucracy as well as government bureaucracy.”

Stop Obama’s green energy cronyism: Kill the Export-Import Bank

Barack Obama and Solyndra

One of the Export-Import Bank’s main goal, as it appears stated on its “About Us” page, is to “provide[s] export financing products that fill gaps in trade financing,” and effectively support U.S. companies that export “primarily to developing markets worldwide.”

The noble mission of filling in the gaps in trade financing, working as if the institution exists to fill in for an all-seeing eye and making sure that the developing world is being coerced into purchasing American products, doesn’t seem all that noble once you explore what the agency has accomplished in the last 80 years.

While the export credit firm offers financial incentives that promote a few amongst the greats of American corporations so that poor countries can afford U.S. products, one of the agency’s least publicized but extremely essential functions is to pick winners and offer them a striving market that is ready for their subsidized – therefore artificially affordable at the final consumer level – goods.

According to a research published by the Mercatus Center, the Export-Import bank’s most pressing problem is its procedural favoring of politically-connected corporations, which ultimately undermines competition, offering a disloyal and unjust environment to other companies that are not even allowed to compete with the government’s protégé abroad.

One of the industries that have been recently picking up steam with the help of the Ex-Im Bank is the green energy and sustainability sector.

Ex-Im Is The “Face of Cronyism,” Says Jeb Hensarling

Crony capitalism is America’s disease and the real problem with the modern perception of capitalism that most of the left likes to use against capitalism itself, without discerning between what voluntary trade and free markets can accomplish and what crony capitalism actually is all about.

It’s very easy to find perfect examples of crony capitalism in the age of President Barack Obama.

One of these perfect examples has been relying on taxpayer money to subsidize financial incentives destined to foreign companies that purchase U.S. exports: the Export-Import Bank.

The agency’s charter expires in 2014, making now the perfect time for opponents of crony capitalism to raise their objections to the agency’s upcoming congressional renewal. Heritage’s The Foundry talked to Rep. Jeb Hensarling (R-TX) about the Export-Import Bank and why he thinks that the federal export-subsidy agency should not be allowed to stay in business.

Obama assures public he believes in the free market, outlines government-sponsored housing reform

It seems like the liberty movement has accomplished far more than what most of us ever expected: it got President Barack Obama to admit he believes in the free market.

The statement was made before a crowd in Phoenix, Arizona while President Obama outlined the first four principles of his new plan to govern the housing reform.

The new plan includes facilitating credit for what the president calls qualified buyers, who “want to get a mortgage but keep getting rejected by the banks,” and offering a solution to “address the uneven recovery” by restoring rundown homes and vacant property.

While summarizing his government-run plans to restore the economy by stimulating the housing market, which is nothing out of the ordinary when it comes to this administration’s policies, President Obama reassured Arizonans that steps must be taken to avoid yet another bubble.

The solution, President Obama says, is to do precisely what he wants to do with Obamacare, which is to set up ”clear rules for insurance companies to protect consumers,” thus making housing more affordable. He claims that his plan would offer a market-based solution still under the government’s watch that would ensure home value would go up for everybody.

New Paper: Cronyism & Lobbyists Are By-Products of Big Government

cronyism

I know we’re focused pretty intensely on the elections, which are only two weeks away, but we always need to focus as well on underlying principles and concepts that drive our economy and our government. Elections come and go; this stuff is forever. In that vein, you really need to take a look at a new paper from the Mercatus Center at George Mason University, by Randall Holcombe:

Crony capitalism describes an economic system in which the profitability of firms in a market economy is dependent on political connections. The term has been used in the popular press but rarely appears in academic literature. However, there has been a substantial amount of academic research on various components that, when aggregated, describe crony capitalism. This literature shows that crony capitalism exists only because those in government are in a position to target benefits to their cronies, and have an incentive to do so, because they get benefits in return. The ability to target those benefits is a result of the spending and regulatory power of government, so big government causes cronyism. One remedy often suggested for cronyism is more government regulation and oversight of the economy, but this remedy misunderstands the cause of cronyism. The substantial and well-established economic literature on the components of crony capitalism shows that big government is the cause of crony capitalism, not the solution.

By “crony capitalism,” of course, he refers to lobbyists, and big business using those lobbyists to get more power and take more wealth away from the public. It’s the reason we had Occupy Wall Street, and why many folks still cry out for “regulation” to “rein in” big business and the big banks.

Free Market Advocacy and the Myth of “Trickle-Down Economics”

 

G20 capitalism banner

There’s a pervasive myth floating around the progressive left that pro-market advocacy necessarily means pro-business advocacy (and, by extension, anti-poor people advocacy). That is, as I said, categorically a myth, but that doesn’t mean people don’t believe it — they do. Kudos are due many times over to the Washington Examiner’s Tim Carney for doing yeoman’s work to try to dispel these myths, like this thorough and merciless rebuttal to Anna Palmer’s joke of a POLITICO piece on a supposed resurgence of corporate lobbyist influence in the White House if Mitt Romney wins the election, as if there’s nothing to see in the Barack Obama White House:

You mean after he kicks out the lobbyists in Obama’s White House like Patton Boggs lobbyist Emmett Beliveau (7), O’Melveny & Myers lobbyist Derek Douglas (8), and Pfizer’s, AT&T’s lobbyist at Akin Gump Dana Singiser (9)?

By that point in the column, Carney had already identified six registered lobbyists working in the administration; by the end of the thrashing, he identifies a total fifty-five registered lobbyists working in the White House.

Crony Capitalism Is Phony Capitalism

That little gem is from a new page on Facebook, called “Crony Capitalism is Phony Capitalism.” Now, you may be wondering why I posted this. I mean yes, it’s kinda cute (c’mon, this is the postmodern 21st century, zombies and Cthulhu are automatically cute), short, pithy, and expresses a libertarian message, even if it generalizes it. A lot. But a 30-second video from a Facebook page? Really?

The reason I did so is because I feel this is the Number #1 message we need to be getting out there (well, that and how feeling up women at airports is just wrong.) Back in college, when I argued about government intervention in the marketplace, “corporatism” and “crony capitalism” were just not mentioned. It was an important discovery for me when I found these terms, because previously I had been just trying to defend capitalism, no adjectives. It was difficult, because everyone associated large businesses ripping them off with the capitalist system, and they just could not understand how government so heavily involved itself in the market, but that system was not what we libertarians were espousing. Oh, how useful these new terms were! How sharp were their blades in cutting away the web of lies! How deep were their inkwells in writing the new papers blogs on liberty and the free market!

A Defense of the Free Market

One of the most common refrains from the political left and the media is that, regarding the economy, conservatives advocate for unchecked freedom for big business to do whatever it wants to do, and for no government interference with business at all. These assertions stem from a fundamental misunderstanding of the nature of conservatism.

For the conservative, the issue comes down to the proper role of government. To have no government at all is anarchy, and certainly no conservative would argue that. So the question is not whether or not there should be government involvement (there should), but what level of government involvement is appropriate.

When we look at the biggest financial scandals of the last decade (Enron, WorldCom, Fannie Mae and Freddie Mac, etc.), they all have one thing in common. At some point, whether through active complicity or negligence, government played a huge role in allowing the scandals to occur. And with every scandal, it becomes an excuse, or rather an imperative, to increase the level of government involvement to keep it from occurring again.

Some of the major scandals have occurred because the regulatory oversight assigned to one government agency or another was either inadequately enforced, or government employees were co-opted into the fraudulent scheme. Others occur because our statutory and regulatory law has become so complex that it is inevitable that a crafty thief will be able to find technical loopholes that fulfill the letter of the law while being contradictory to the clear intent of the law. Either way, we continue to add layer after layer of government bureaucracy, regulation and complexity, and yet the scandals keep getting more and more expensive. That is because the more complex the law, the easier it is to find a technical Get-Out-of-Jail-Free Card.

Stop Obama’s Crony Bank: Ex-Im distorts the free market by doling out billions to politically-connected big businesses

Tell Congress to Stop Obama's Crony Bank

Congress will soon consider reauthorization of the Export-Import Bank, a New Deal-era agency that exists solely to funnel billions of taxpayer dollars to foreign corporations to buy goods from companies based in the United States.

Ensuring Ex-Im’s survival has become a pet cause for the cronies at the U.S. Chamber of Commerce and other special interest groups. While its supporters claim that the Ex-Im helps small business, that couldn’t be further from the truth. The Export-Import Bank has become an ATM for big business, doling out billions in corporate welfare to the politically-connected.

Boeing received nearly $8 billion in taxpayer-backed loan guarantees from the Export-Import Bank in FY 2013. That’s 66 percent of the loan guarantees it made in that fiscal year. Perhaps that’s why Ex-Im has earned the nickname “Boeing’s bank.” Caterpillar hauled in $1.34 billion and General Electric received $1.7 billion.

In 2008, Barack Obama, then a candidate for president, called out the Export-Import Bank for what it really is: “little more than a fund for corporate welfare.” That was true then, as it is today.

But, like he’s done on so many other issues, Obama changed his position once he took up residence in the White House. In 2012, Obama successfully lobbied Congress to save Ex-Im. And Obama wants Congress to rubber stamp reauthorization of the crony Bank again this year.


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