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Tag Archives: crony capitalism

Is the TPP like Obamacare, “Executive Amnesty,” and “Net neutrality”? The public can’t see. Only large vested interests.

A broad, sweeping, global treaty which will/may fundamentally shift how trade is done in the world and in the USA is still secret and thanks to Senate Republicans is halfway to getting “fast track” status. That is the treaty will be voted on for final approval by Congress with a simple “yes” or “no” vote, without debate or amendments. That doesn’t seem right to me.

Now I am all for free trade. I think goods and services should flow without friction across borders. I say make it easier for this to happen. This creates opportunity and better goods at better prices for nearly everyone.

An example.

When I was a kid I used to get Sears brand sneakers with my mom. (Fashion was not a priority for my parents when it came to the kids.) Every 6 months or so I’d get a new pair. The cost was $35-$40.

Fast forward to now. At Target kid sneakers of much higher quality than my Sears kicks can be purchased at about the same price or even lower. And this isn’t even in inflation adjusted terms. Adjusting for inflation, these higher quality sneakers are probably HALF the price of my old sneakers, or even less.

This is an example of free trade raising the quality of life generally.

The same can be said for t-shirts, technology, any number of things. Our lives are for the most part much better because of relatively free trade.

Of course there are losers in this equation. The people who used to make my Sears brand sneakers no longer have a job making Sears brand sneakers. That’s true. But generally life is better in America for all those Chinese made goods which are made for us at lower cost and with higher quality (often) than products made in the States.

But it concerns me that the Trans Pacific Partnership, a supposedly “free trade” agreement, is being handled with such secrecy. This giant agreement has been negotiated and is being voted on (at least fast track authority) by the Congress, without any public review at all. Is this how we do business in the USA now? Are our leaders so afraid that the people will rise up in opposition that government must now be done in the shadows?

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The Myth of the Free Market Cartel | by Murray N. Rothbard (Video)

Cartels rarely survive very long without the backing of the government. The big trusts over the years have only continued on over the long term if they had the protection of the state. In a free market with free prices monopolists are constantly undermined by new firms, with newer equipment and better methods. There is no better trust buster than the market.

If however the companies in power at a particular time can buy into the government and create a regulatory moat around their firms the old, less innovative guard can remain in place. A key part of crony capitalism.

Below the master Murray Rothbard discusses this phenomenon in a short excerpt.

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Rove’s Crossroads PAC Is No Longer G.O.P.’s ‘Big Dog’

There are more groups like Crossroads out there these days. More dogs. But more important than that is that Rove and American Crossroads are associated with George Bush and an era of big government “conservatism”. George Bush and Karl Rove blew up the modern (Reaganish) conservative movement. Many have not forgotten this. That Rove has explicitly targeted the libertarian/conservative coalition hasn’t earned him any friends either in a rapidly changing party.

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Will China build California’s bullet train? (Hope you’re connected)

China is the ultimate crony state and it may just export some (more) Sino-cronyism to our shores—well, California—soon. Cali wants a bullet train and China has the know how and the financing to build one.

If it’s the best product at the best price, hey have at it. Thing is, bullet train+California+China just has gigantic boondoggle written all over it. It will be a crony feast.

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This Is What Crony Capitalism Looks Like: Boeing Is Threatening to Move Abroad if It Doesn’t Get to Keep Its Ex-Im Subsidies

Excuse me?

OK, Boeing has every right to go wherever it chooses as far as I’m concerned but this sort of posturing should be kept in mind when it comes time to award defense contracts. Basically the company is holding a gun on some members of congress and demanding money from the taxpayers—or else. This kind of behavior should not be rewarded.

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Cronies are like mushrooms, they grow best in the dark

Technology and open sourced methods of organization—of people, money, and information—represent a real threat to the crony capitalist system.

Cronies are like mushrooms, they grow best in the dark. For too long Washington has been a dank cave of insider dealing and general corruption*. Money is made (legally stolen?) in the shadows.

Time for some sunshine.

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California’s Government Unions Collect $1.0 Billion Per Year

By Ed Ring, executive director, California Policy Center

 

“If you say there is an elephant in the room, you mean that there is an obvious problem or difficult situation that people do not want to talk about.”
–  Cambridge Dictionaries Online

If you study California’s legislature, it doesn’t take long to learn there’s an elephant in both chambers, bigger and badder than every other beast. And considering the immense size of that elephant, and the power it wields, it doesn’t get talked about much.

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The Forgotten Depression (Forgotten because the market corrected so quickly, sans government intervention)

It’s a simple concept but one which is lost on many modern economists and lay people alike.

In the event of an economic downturn get government out of the way. Let markets clear. Then like a forest after a forest fire the economy will come back with real growth. 

Of course no one likes this idea—the one that actually works—because when things go bad everyone wants leaders “to do something, anything!” This action from planners and pols then in turn extends recessions/depressions as was the case during the Great Depression and the most recent depression.

But this was not the case during the acute, but short, 1920-1921 depression. Lack of government action allowed the system to correct and thereby lessened the long term pain.

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