cronyism

Hillary Clinton, Big Government, and Washington Corruption

https://mjfellright.files.wordpress.com/2012/07/thomas-jefferson-big-government-quote1.jpg

 

Originally published at International Liberty ~ Ed.

 

I’ve explained, over and over and over again, that big government is the mother’s milk of corruption.

Simply stated, a convoluted tax code, bloated budget, and regulatory morass create endless opportunities for well-connected insiders to obtain unearned and undeserved wealth.

Is this evidence that Washington is broken?

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.”

7 Reasons Why Kevin McCarthy Shouldn’t Replace Eric Cantor

John Boehner, Kevin McCarthy, and Eric Cantor

Republicans were jockeying for position to move up on the ladder before Eric Cantor (R-VA), who lost his primary bid in a shocking upset on Tuesday night, announced that he would step down from his post as House Majority Leader at the end of July.

But with the leadership election scheduled for Thursday, June 19, several names are being kicked around to replace Cantor, among them is current Majority Whip Kevin McCarthy (R-CA).

Yeah, no. That’s a terrible idea.

McCarthy has been in lock-step with Cantor, who endorsed him yesterday, and Speaker John Boehner (R-OH). He’s essentially the status quo. Nothing will change in the House if McCarthy becomes the next Majority Leader. It would be a politically tone deaf move for House Republicans to choose a carbon copy of Cantor to lead their conference.

And here are some reasons why.

Incompetent and Corrupt: Scandals Pile Up for “No Drama” Obama

Six years into his presidency, Barack “No Drama” Obama has been anything but drama-free. His presidency has been one series of scandals after another, the magnitude of each increasing with each successive revelation. Initially, these scandals centered around partisan bullying, political cronyism, and general corruption, but as his second term unfold, more and more the scandals involve dead Americans.

One of the most fascinating aspects of the scandals surrounding the Obama presidency is that the sheer volume seems to inoculate him from being brought down by any one scandal. No sooner do we start making progress investigating one scandal than another one breaks. It’s like watching a dog chase a ball but suddenly stop and change directions moments before retrieving it when another ball is tossed in the opposite direction.

The current scandal involves Obama’s decision to negotiate with terrorists. In violation of the absolutely clear requirements of the law, the Obama administration revealed last week that it had negotiated the release of Army Sergeant Bowe Bergdahl, who had been held by Taliban forces for five years. In exchange for Bergdahl, Obama released five senior Taliban fighters who are responsible for the deaths of countless Americans.

The outrage surrounding this exchange is multi-faceted. First, there is the fact that Obama broke long-standing U.S. policy of never negotiating with terrorists. Even were that not the policy, Obama’s negotiating skills were exposed as horrendously deficient considering the Taliban gets five hardened fighters in exchange for one relatively low-level American soldier.

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.

GOP, crony allies plan efforts to undermine conservatives

The Wall Street Journal ran a story on Christmas which explained in detail how Republican leaders and the United States Chamber of Commerce are looking to diminish the influence of conservatives both in and outside of Congress. This gives us a glimpse at the latest battle, if you will, in the ongoing Republican civil war.

You may remember that Speaker John Boehner (R-OH) lashed out at conservative groups that opposed the budget deal brokered by Rep. Paul Ryan (R-WI). It turns out, though unsurprisingly, that this public admonition of conservatives was just scratched the surface. It turns out, as the Journal explained, that Republican leaders were threatening members with loss of committee assignments if they voted against the budget deal:

Mr. Boehner’s deputies took steps behind the scenes to end internal dissent, including among GOP committee chairmen who had voted against the House leadership in prior fiscal battles. In the run-up to the budget vote, Mr. Boehner’s deputies warned chairmen who were tempted to oppose the deal that doing so could jeopardize their committee posts, said people familiar with the discussions.

The goal was to reverse a trend in which chairmen, who typically earn their post by hewing to the party line, voted against priority legislation. Six chairmen had voted against an initial version of a farm bill earlier in the year, causing the legislation to collapse on the House floor, and 11 voted against the pact this fall to reopen the federal government and extend the country’s borrowing authority into 2014.

Lawmakers Who Received Defense Industry Cash Support NSA Spying

MapLight, a Berkeley-based non-profit, was recently involved in an investigation set out to identify the factors that influenced many House Republicans, which eventually translated into a failure to vote in support of the Amash-Conyers amendment. The investigation demonstrates that defense money, not party affiliation, might have had plenty to do with how members of the House voted on the Amash amendment; more than one would like to think.

Rep. Justin Amash (R-MI) was able to cross party lines and combine an impressive number of supporters to support his amendment, which was formulated to keep the NSA from collecting data from innocent Americans. In spite of the productive campaign, Rep. Amash’s amendment failed. Once MapLight researchers took a closer look at the financing data concerning the top defense contractors in the country, they found that House members who voted to continue the controversial NSA spy programs, reportedly received $41,635 each on average from defense and intelligence firms and the $12.97 million these firms gathered within a 2-year period ending December 31, 2012.

Do House Republicans really want Farm Bill reform?

As much as I never like to question anyone’s intentions, I finally find myself asking this week, do House Republicans really want to reform Washington?

Perhaps it was naïve, but after the defeat of the Farm Bill, I thought hope was in the air for agriculture policy reform. Numerous Republicans had offered strong amendments, many of which were rejected at the onset by the Rules Committee. And a fair number of the remaining amendments were defeated on the floor at the urging of leadership. This egregious flouting of their party’s desire to curb spending pushed members over the edge. Sixty-two fiscally conservative Republicans revolted against the bill, proving to leadership once and for all that, indeed, they are here to actually make changes.

This failure appeared to make leadership desperate, forcing them to take the drastic step they’d previously vowed to avoid – splitting the bill into two portions, one for food assistance and one for agriculture programs. Reform advocates long have tossed around splitting the bill. Their logic is simple: neither portion of the bill is strong enough to stand alone. Nutrition program supporters and farm program enthusiasts need each other to get the bill across the finish line. So for those who find the programs to be bloated, forcing each portion through on its own merit seemed more likely to yield change than the current back-scratching arrangement.

Expect the Farm Bill to cost a lot more than advertised

With pressure in the Senate to pass the Farm Bill this week (they approved cloture this morning) and showmanship killing any consideration of further amendments, things aren’t looking good for reformers. This leaves taxpayers on the hook for an expanded crop insurance program with incredibly few taxpayer protections built in.

The Senate lauds this as progress, claiming $24 billion in savings over ten years. But a simple breakdown makes it clear that these supposed savings will never be realized. Luckily, the American Enterprise Institute has a great infographic presenting the numbers as they are likely to look over the next ten years. Instead of finding $24.4 billion in savings, the AEI graphic shows $31.2 billion of increased spending, which they rightly term a “bait-and-switch” for the taxpayer.

So where do these costs come from? The answer is the Agriculture Risk Coverage provision, a proposed “shallow loss” program that would make up the difference for revenue not covered by crop insurance. The program works with crop insurance to guarantee revenues, basically ensuring farmers 89 percent of their average revenue over the last five years. So if prices fall or your yield decreases, ARC will smooth over the difference.

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.


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