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?)
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.
Ms. Fiorina is right on the money here. We look forward to hearing more from her in the months ahead.
Many people wrongly believe that politics is to a large extent a battle between government and business. That the 2 represent opposite dispositions. This is a foolish notion. Business and government are more often partners than adversaries. Especially now.
But crony capitalism has a long history in this country.
“Amtrak is a massive failure because it’s wedded to a failed paradigm. It runs trains that serve political purposes as opposed to being responsive to the marketplace. America needs passenger trains in selected areas, but it doesn’t need Amtrak’s antiquated route system, poor service and unreasonable operating deficits.” – Joseph Vranich, former Amtrak spokesman
As I ride the train and look out at the Virginia countryside, Blue Ridge Mountains to my left, the Piedmont to my right, I am struck by the beauty of my home state. As the sun rises the sky quickly shifts from violet to pale blue. There is no mist this morning, just crisp clear early spring.
Overall I don’t have many complaints with Amtrak. For the most part it’s on time. The trains are usually pretty clean. The fares are reasonable. The stretch I ride is usually populated with regular Washington DC commuters and so I get the sense a bit of extra attention is paid. This morning however I got on a train which had started last night in New Orleans (from what I could gather) and which would arrive ultimately in New York in the afternoon.
The train was late by 15 minutes – not terrible – but just as I was about to hop on a stream of bleary eyed people poured out, most immediately lighting cigarettes as they exited. They got off. We got on. The people finished their smokes and the train started rolling again. By then we were ½ hour late.
I know I am being picky.* Frankly $33 to go from Charlottesville to Washington DC is a very good deal. I get to sit at a table in the cafe car while I write this. It certainly beats the heck out of driving 3 ½ hours into Washington. And that’s if I don’t hit traffic, which I always do.
So, as I fly along just south of Manassas I wonder why it is that no one can make any money doing this privately?
Interesting that the author of the attached article so closely associates the battle to end the Import-Export Bank (Boeing’s Bank) with the Kochs.
To be sure the free market folks in the Koch world have been adamant in their opposition to Ex-Im but this is a anti-crony thing not a Koch thing.
Google is a highly politicized company. An ardent supporter of the current president, members of Google’s senior staff even helped Obama get elected in 2012. This would be bad enough if Google was in the business of oil, or cars, or even jet fighters. But Google is in the business of INFORMATION.
I remember sitting in my car in college listening to Howard Stern on the radio before class sometime in 2000. Howard and his crew were talking about the stock market which was roaring. The Tech Bubble was in full effect. The sky was the limit. If you weren’t in the market you were losing out. It was a similar vibe to the Housing Bubble which would emerge only a few years later.
Stern took a call from a listener.
The caller, who sounded like he might have been on the tail end of a serious bender explained in candid terms that he was affiliated with some unsavory characters and that he and his unsavory friends were manipulating the market up. He said there was little under the prices of many of the stocks which were rising at breakneck speed.
In a few months we would see how right that caller was.
It’s not like suddenly Seattle won’t have any restaurants. It just won’t have any restaurants at which people of modest means can eat. It also won’t have as many mom and pop immigrant owned restaurants.
Too bad as Seattle is one of the great food cities of the world.
An important distinction and grist for the ongoing discussion of “fascism” on this site.
Logan Albright explains the difference in the context of the current Export-Import Bank debate.
Farming policy in this country is a travesty.
So the Kochs are going to spend a billion (on think tanks, etc.) in the next election. You know what? I don’t care.
Why Nick? You’re against crony capitalism. Super rich guys spending money on elections doesn’t concern you?
On one level it does. One should always keep a close eye on anyone throwing money around in the political sphere. If the Kochs ever try to buy a law for their benefit, if they ever posture for a crony handout paid for by the taxpayers we will be the first to highlight them.
But it’s not like the Kochs are trying to get the state to work on their behalf. They aren’t trying to leverage the power of the government for their ends.They aren’t like Tom Styer for instance, the biggest political giver of the last cycle who wants specific legislation enacted which will benefit his bottom line in addition to his political aims. The Kochs simply want a smaller state and that in my book is a very admirable thing.
This was shared by a reader and I thought it was too fantastic not to post.