Since I write about capitalism and crony capitalism and government and business every day I have the opportunity to read quite a lot about these subjects from various perspectives. I read libertarians, and conservatives, and liberals, and progressives, and just about anyone else who is interesting. I read the comments here at ACC, and at sites all over the web.
One of the things I am fascinated by is the degree to which some people are seriously afraid of free enterprise, the voluntary exchange of goods and services, of capitalism. It is bizarre to me as it seems pretty self evident that where free enterprise is allowed to flourish people also flourish. History has shown us this over and over and over. And yet people still fear.
Is it ignorance? Is it ingrained lessons from school? Is it an overall culture of statism? Is it the search for a religion in a world which often lacks religion? (I am convinced that “big government” is in fact a religion. I will admit this from the outset.)
There are probably dozens if not hundreds of reasons why some people fear free enterprise. Some reasons are more valid than others. I think however that there are some core reasons which can be readily identified and I’d like to take the space to explore some of them.
This essay will be an ongoing one which I will revisit periodically. Below are a few reasons why I believe people fear freedom and free enterprise. This is just the first batch.
We have a massive military. We have bases around the world. We have by far and away the largest military in the world. And the main reason this is is not because of threats to “American interests” but because defense spending is how Republicans (and Democrats too) distribute tax money to their constituents. It’s an ugly truth, but it is the truth.
Yes the “defense” of the country is expressly enumerated in the Constitution. DEFENSE. Not empire. Empires are costly for the citizenry of a country, at least the citizens not in on the deal. But who cares, spend away. Like Dick Cheney, and Paul Krugman say, “deficits don’t matter.”
You know and I know of course that deficits and debt do in fact matter otherwise we wouldn’t have to gather any tax revenue, but politicians want to spend. And “defense” is the preferred way to spend for many Republicans.
And by the way, if you want to see where the money really goes take a drive down Route 28 next to Dulles Airport sometime and you will see it. Shiny office building after shiny office building filled with defense contractors.
At the end of this spectacle of glass, steel, and tax dollars is a Ferrari and Lamborghini dealership. I wonder why?
This is potentially good business and potentially good for the environment.* We have long asserted that the sort of approach outlined in the attached article is one of the ways environmental issues could/should be addressed. See a problem with a mine? Want it closed? Buy it. Shut it down. That’s a perfectly valid way to address things.
Want to protect the rain forest? Buy vast tracts of it. There are plenty of wealthy greens out there who would love to have a few vanity acres of virgin jungle. Stick a camera on a mahogany tree and let them view the toucans and monkeys running around, and voila a protected reserve.
How the whole fantasy football thing gets around the ban on online gambling in the US I’d like to know. It sure looks like online gambling to me. Not that it shouldn’t be completely legal. Just that if we poker players don’t get to play online how come the fantasy football guys get to?*
Regardless, it looks like fantasy football is struggling with some of the same issues which plagued online poker. (Back when online poker was legal.) Specifically that one must take a leap of faith when gambling online. One must believe that the outfit one is gambling through is on the up and up. It appears, according to this article, that many fantasy sports sites are not and that gamblers are falling victim to fraud.
Every player knows that this could be the case. But people bet anyway. That is their choice. But betting with a rigged casino is a losing bet. Heck, betting with a non-rigged casino is mostly a losing bet.
Perhaps it’s best just not to lay down a wager at all.
That is where the choice is. If one wants to gamble, by all means. But accept the risk, the very real risk that one is being swindled.
The New York Times frets that the industry is “unregulated.” In other words that the government isn’t getting a large enough piece of the pie. Because online poker actually threatened casinos, online poker was killed instead of milked. (Casinos sort of hate poker in general anyway, even in their establishments. They don’t make much money on games relatively speaking. The money mostly moves between players and involves too much skill.) With fantasy football the NFL and even NFL team owners have a stake and as such fantasy football isn’t likely to be banned outright. Better to call for “regulation.” Time to get paid.
As we’ve said China is driving things economically right now. The Federal Reserve doesn’t want to say it. It wants everyone to think that though our boat is leaking it is unlikely to leak as much as the rest of the the world’s economic “boats.” And right now that may be true. But we are still taking on water. The Great Economic Experiment post 2008 is failing, as many of the more market oriented have long predicted, and now the American central bank has very few options.
Somehow, for many people, the TEA Party has become some sort of social conservative thing. This is the dominant narrative repeated in much of the press and indeed some social conservatives have tried to run with this recharacterization.
But the TEA Party wasn’t and isn’t about social issues. It is about reducing the size of government. It is about bringing the political class in line. It is about We the People saying ENOUGH! And most importantly it is about being TAXED ENOUGH ALREADY. T-E-A.
Of course The Post thinks the fact that the public no longer trusts it is a bad thing. That a small group of media outlets can no longer completely dominate the news “narrative” is terrible in the eyes of one of the #oldmedia outlets. We wouldn’t expect them to like it. But that people no longer trust the “media” particularly the “legacy,” “old,” or “crony media” is actually a very good thing for the country.
It used to be that most Americans got their news from the local paper and Walter Cronkite and never even considered that they were being lied to and manipulated for political reasons. (Not that this was always the case.) Consider that Cronkite used to sign off of his broadcast with this little tag.
“And that’s the way it is.”
For Mr. Cronkite and his production staff maybe. Perhaps for the folks just down the road at The New York Times. But “That’s the way it is” is unbelievably arrogant. Yet at the time I’ll bet not that many people saw it that way.
Now we know better.
The Export-Import Bank of the United States which provides below market financing underwritten by taxpayers for giant corporations needs to die. Its charter wasn’t renewed in June, which is excellent, but the “bank” could still be revived if John Boehner attaches a revival to a big bill, a must vote on bill, like the highway bill. According to the hyper liberal, extreme statist, uber crony capitalist Maxine Waters, a Democrat, that just may be in the cards. She wants her money for her corporate sponsors and she doesn’t give a damn about the taxpayers or crony capitalism. And according to this report from The Hill the Speaker may be right with her.
Is Boehner even a Republican? He’s certainly not a conservative or a friend to the taxpayers that is very clear. If he attaches a revival of Ex-Im to the highway bill, or any bill, know that Boehner is just giving the people who fund the US government, the taxpayers, a giant middle finger. Right with Maxine Waters.
We hope Boehner will do the right thing and let the Export-Import Bank die. To do otherwise is an insult, a big insult, to the American people.
GE is one of the great American crony companies. Jeff Immelt, once head of Obama’s “jobs council” and current CEO of General Electric, has played the crony game extremely well. First in securing emergency financing courtesy of the American taxpayers because it screwed up royally. And then he was able to exploit various Obama era boondoggles which funneled money GE’s way on an ongoing basis. (Think wind turbines etc.)
Now Mr. Immelt is stamping his feet because it looks like GE may permanently lose the the sweetheart deals it has at the taxpayer underwritten Export Bank. This is crony capitalism full on.
OK, Politico did not use the exact term, but Charles Davidson and Jeffrey Gedmin make a pretty bold statement in today’s edition. China is a kleptocracy and this encourages instability in the country and in the global economy.
We have argued this pretty much since the founding of this website. A broad system of crony capitalism like the one in China creates distortions in the economy, prices are obfuscated, the connected become wealthy, dishonesty is compounded, until the facade eventually crumbles when the lies become apparent. To some degree that is what we are seeing now with the Chinese downturn.
Such a system is destabilizing politically as well. As corruption is rewarded and cronies amass power and wealth, resentment increases among everyday people. Anger bubbles as the cancer spreads throughout the land.
Davidson and Gedmin are right to highlight the system of kleptocracy in China as President Xi is visiting the United States. But they argue that we should be actively undermining the regime on moral grounds, and from a position of ethical superiority.
But we have serious (and similar) problems in this country. Perhaps we should first extract the log from our own eye.
I think the answer is that for a majority of GOP voters this is probably true. There is no real call to reduce the size of our massive military from the average GOP voter. Indeed if anything there is a call to expand it. There is no real call for reforming Social Security. There is no real call to reform Medicare (which is a total actuarial disaster). There is no real call for drug law reform. There is no real call for curtailing the government violations of the the 4th Amendment under the Patriot Act. There is no widespread call for an end to the Federal Reserve.
Most Republicans, with the exception of a large and I think still growing minority, don’t actually want to make the government smaller. They just want to change the style of government.
Now I know I am getting older. There is quite a lot to be said for having an advisor who at least knows what rising interest rates feel like.
Pretty standard responses. Safe choices all. But there was one response of particular note and that was Ted Cruz’s. He said that he wouldn’t replace Hamilton on the $10 bill but would prefer to replace Andrew Jackson on the $20 bill. This is a horrible idea.
Jackson killed the Second Bank of the United States, America’s central bank at the time, which was a giant win for the American people. For all of Jackson’s faults (and he has some big ones) that alone is reason to keep Jackson on the $20 bill. His was a victory in the fight against the banks of the Northeast and against crony capitalism generally.
The rest of the responses are below.
Paul: Susan B. Anthony
Hucakbee: My wife
Rubio: Rosa Parks
Cruz: Take Jackson off the $20 bill and put Parks on
Carson: My mother
Trump: My daughter or Rosa Parks
Bush: Margaret Thatcher.
Walker: Clara Barton
Fiorina: I wouldn’t change it.
Kasich: Mother Teresa
Christie: Abigail Adams
Well we’ve long held that the neocons would jump ship to Hillary Clinton if Rand Paul got the nomination. But apparently the neocons don’t like Trump either. Son of the founder of the neoconservative (big government, interventionist, Republicans) movement Bill Kristol said he’d support a 3rd party candidate if Mr. Hair gets the GOP nomination. In fact Kristol said he’d support Dick Cheney in a 3rd party bid.
That’s right. Dick Cheney.
Who says the Washington class is out of touch?
Got some money to invest? Are you a foreign national? Are you interested in obtaining permanent resident status in the USA? If so, have we got a deal for you.
Just dump a pile of cash into an upscale real estate development which has been carefully tailored to include just a bit of “low income” housing. Then boom! Just sit back and wait for the paperwork to show up in the mail from the State Department. It is a DEAL! If of course you have a million bucks to put into condos.
On the whole there are worse examples of cronyism. The folks investing are investing their money here and not in say, Shanghai. (Probably not the best move these days anyway though.) However the federal parameters around the EB-5 program are very sketchy and it appears that it is being openly abused. The idea was that this money was to be invested in blighted neighborhoods. That was the deal. But that does not appear to be the case. Most of the money is going to shiny towers of glass and steel for wealthy urbanites.
Such is the way with these sorts of federal programs. It is par for the crony course. The bigger the program the bigger the jack. (In one way or another for those outside of the crony system.)