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Category Archives: Crony Capitalism

The Crony Capitalist Crash Continues*, Dow down 468, S&P at 1913

Oil got hammered over 8% today. Stocks in the US 3% roughly.

This is largely driven by reality hitting China, the Ultimate Crony Capitalist State, and reality hitting investors around the world who have ridden the Fed driven asset inflation of the last few years. As we have said there are huge, massive, pockets of monetary cotton candy in markets which will collapse sooner or later.

But don’t worry, supposedly China has another dose of “stimulus” on the way. That ought to make things better.

Below are a few of the articles we have done on markets and China in the past 6 months or so for your information.

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Socialism sucks (the life out of an economy): A 90-Year-Old Goes Shopping in Venezuela

¡Viva Socialismo!

Socialism is death. It is sold as life of course. It is sold as a way to get even with those nasty capitalists with their “greed driven” profit motives. A way to bring heaven to earth. Better to let the cronies in government manage things than the people in a free economy. The cronies only have your best interests in mind.

Socialists prey on the ignorant and hopeless.

Socialism is a kind of religion. It has many offshoots and schisms, but fundamentally it is about all too fallible cronies telling other people what to do, and these same cronies thinking that they are smarter than the market. This is the faith.This is the religion. It is about power OVER people. But again, it is sold as liberation.

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World’s Poor: “We Want Capitalism”

The way out of poverty is through capitalism, free enterprise, free markets, and free prices. But so many people who I believe honestly want to do good do not understand this. They believe that central planning and aid from “rich countries” will solve the world’s problems even though they have only worsened things in aggregate around the world for decades.

Where poor people can build wealth and enjoy property rights and honest pricing the tendency is toward prosperity. Where there is government intervention, where the government or connected cronies can just seize the limited wealth of the poor (often in the name of “justice”), where prices are obfuscated, there is poverty and misery.

We do not believe in free prices and free markets because we want to keep “what’s ours.” We believe in them because we know, and have seen, how much better capitalism is for everyday people than state intervention and its associated cronyism.

In order for a society to truly proper people need both personal liberty and economic liberty, which are actually one and the same. Capitalism allows for both and offers a path out of poverty. (Not that it is always easy.) But many people just refuse to see this. It fundamentally conflicts with everything they’ve been told, to date.

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Bloomberg: Afternoons in the Chinese stock market have turned into a waiting game for the state-backed funds to arrive.

Why have we focused so much attention on China as of late? First because the Chinese economy is huge and hugely important to the overall world economy. Second because China is, as we say, The Ultimate Crony Capitalist State. It is an economy built on fiat. It is an economy built on commands from on high. It is an economy with massive potential, potential which to some degree has been actualized, but which is undermined by cronyism and central planning.

China in many respects is a cautionary tale.

China will continue to grow. It will continue its rise as a great power. But it is increasingly obvious that the Chinese model is not one to emulate.

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FCC versus Your Health

Will the FCC under “Net neutrality” kill an important and promising area of innovation in medicine, “mobile medicine”?

The FCC may not kill such innovation completely but it may slow it down, likely by a lot. This is a particular shame as the people who may benefit most from “mobile medicine” are the poor and otherwise isolated and marginalized.

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Lobbying firm has you covered no matter who’s in power

We say often that fundamentally there is little real difference between the establishments in the Democratic and Republican parties. The below graph sums it up pretty well.

So it makes sense to have a lobbying firm which is comfortable dealing with whomever. Because in the end, Republican or Democrat it really does come down to just getting paid.

(From The Intercept)

The founders of Rokk Solutions, a new political consulting firm that serves corporate trade associations and other lobbying ventures, offer their clients an unusual value proposition: whichever party triumphs, they’ll have had a hand in a big-money group that can claim victory.

While bipartisan political consulting firms are a dime a dozen in Washington, D.C., what makes Rokk noteworthy is that it is comprised of campaign operatives with major roles in two big-money groups — one Democratic, one Republican — expected to play major roles in the 2016 elections.

Click here for the article.

The counter summit to the Fed meeting in Jackson Hole

Calls to reform, audit, and even eliminate the Federal Reserve have been growing in recent years. We certainly call for an end to the Fed and I encourage anyone interested in monetary policy and the Federal Reserve to read Free Prices Now by ACC co-founder Hunter Lewis. Hunter is a scholar of the highest order and a remarkably successful financier. If you want to understand the sins of the Federal Reserve read his book.

But many people already understand the sins of the Fed and many of these people gathered in a counter summit to the party the Federal Reserve was having this week in Jackson Hole Wyoming. One of the people criticizing the Fed was Benn Steil who, believe it or not, is a director of international economics at The Council on Foreign Relations.

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