We’ve covered the TPP negotiations a few times. From Hollywood – which is seeking to expand draconian copyright around the world, to Pharma, to the big industrial companies, everyone is in on this thing, except apparently the public.
These sorts of loans are typically vehicles for crony capitalism. Think Solyndra. But in this case the market has already resolved the issue. The plant the taxpayer backed loan is allocated for has already been built. The project was originally financed within the private sector. Why is megacorporation Alcoa now getting a plum loan?
The answer it appears is political. (Isn’t it always?)
Last week we posted a story about the cozy relationship Hillary and Bill Clinton have with the CEO of Columbia’s largest private oil company and we asked this question;
…are the UAW, the AFL-CIO, and the USW going to support a candidate for president who has taken millions and millions of dollars from a company (and its CEO) which has a history of busting unions at the point of a rifle?
The article did well in terms of traffic but of particular interest to me was the tone of some of the comments from readers at the end of the article. Among some of our more liberal commentors I sensed just a bit of real unease with Ms. Clinton.
Let’s get one thing out of the way. Both Paul and and Cruz are libertarianish. Paul more libertarianish than Cruz. Neither however is really pushing a hard core liberty oriented agenda.
In the attached article Paul and Cruz aren’t the real focus anyway. Crony capitalism is.
The author tries to make the argument that crony capitalism is what capitalism actually is. There is no distinction between capitalism partnered with the state and capitalism in general. It’s the same phenomenon.
This is the argument that many big government people try to make all the time on this site, because it is what fits the statist worldview. It is what people have been taught all their lives. I was certainly taught this.
On one side are the “progressives,” owners of progress, good government, making the world better and more fair. On the other side there are the “capitalists” monsters of greed and exploitation. Angels and demons.
This worldview is as simple as it is simple minded.
No big deal. So what if you have to take off your shoes, your belt, stick your hands up over your head and get blasted with radiation every time you want to get on a plane. I mean if you don’t like it you can just charter a private plane or buy one of your own. (Private plane passengers don’t go through the TSA gauntlet. I wonder why? It’s not like terrorists could hijack a corporate jet or anything.)
And so what if the odd TSA agent with the force of law behind him wants to grope your genitals? Hey, that’s just part of the price of flying these days.
If one wants to be an internist one must be certified through the ABIM. However according to the attached report the ABIM is basically a Ponzi scheme in a lab coat, that Enron-like irregularities run through the organization’s books.
Sounds like a bureaucracy which is still circling the wagons. So what if people aren’t getting the treatment they need? There are careers at stake and pensions to be protected.
But Nick, these are good billionaires. They are fighting “climate change.” They are “green.” They are progressives.
Yeah, well they are also pushing regulations which will benefit them financially you can rest assured of that. You can also rest assured that they consider anyone who believes that government should be as small as humanly possible is – I hate to use this term – the enemy. To them those who won’t get on the green bandwagon are actually wronging the world. Those who do not buy into their worldview, some would call it a religion, are actually committing a crime (a sin?). I am not kidding.
Regular readers of ACC are aware of the current battle surrounding the reauthorization of the Export-Import Bank of the United States. We believe, along with many others, that Ex-Im is great example of crony capitalism which should be euthanized by a Congress which professes to be for free markets and small government. Whether this will actually happen is an open question however as the bank serves some of the heaviest hitters in corporate America, Boeing chief among them.
But for some, including the author of the attached article, the question is why even have this battle at all? Is cronyism really so bad? So what’s a little a public/partnership action? Who are these nuts anyway who want a separation of government and business. Free markets and economic freedom stink anyway.
We’ve documented why Ex-Im is bad from more than just a moral perspective. Taxpayer backed loans to one corporation often disadvantage other businesses. Free markets allow for opportunity and growth. Crony capitalism strangles growth and enriches established firms which get fat, inefficient, and tend to be slower to respond to the customer.
Still some still don’t get it. Jeff Spross at The Week clearly doesn’t.
The implications are not good that is for sure. As Bruce Fein says, we live in a Bailout State.
Iceland stands like a sentinel at the gates of the Arctic and astride the Mid-Atlantic rift. Part of Scandinavia but also the last stone hop to North America it is a place which breeds peculiarity. With a population of under 330,000, less than the population of Wichita, Kansas, this peculiarity is compounded. Throw in month long winter nights and communal hot spring spas and one can understand why the tiny country produces such weird (and often interesting) furniture, music, and economic ideas.
Attached Ash Navabi at the Mises Institute examines one of Iceland’s most recent idea exports, sovereign money.
The taxi industry is in decline thanks to the likes of Uber, Lyft, and other similar companies. The long time crony arrangements cab companies have enjoyed for decades around the world are falling apart. The market has gotten a taste of the higher quality and in many cases lower prices of ridesharing companies and it likes it.
But one shouldn’t expect an industry built on cronyism to go down without a fight and in the attached article we witness another scrap in the shadow of impending market doom. This time in New York City, home of American cabbie culture and land of the million dollar medallion.
Or at least it was home to the million dollar medallion. Now banks are less inclined to finance taxi medallions as cabs are no longer seen as a good investment. Medallion prices have come down stranding some owners.
However at least one cab fleet captain in the city argues that taxpayers should save him from progress. He wants a bailout just like the banks Downtown got.
(From The New York Times)
Prices peaked in 2013, not just in New York but also in other large markets like Boston and Chicago. Prices have declined as taxis have faced competition from car service apps like Uber. At the top, the price for New York mini-fleet medallions, which may be owned by nondrivers, was over $1.2 million.
Medallions have typically been financed with debt, but creditors have become skittish because of falling prices. The lack of access to credit has caused medallion sales to slow to a trickle as buyers have faced great difficulty finding financing; this has also made it difficult for medallion owners facing loan maturities to sell.
Sorry but a market has winners and losers. That’s what makes a market. Medallion owners won for a long time but now the market has turned. Sorry if you over leveraged yourself but it’s not the taxpayer’s problem.