A reminder from Lew Rockwell of the true nature of the state. The government facilitates cronyism, it doesn’t listen to you, it takes your money for itself and its crony allies, it wages wars which need not be waged, it is not – you and me. It serves its own purposes first. We are at best second thoughts. (We are actually thought of quite a bit, but primarily as nuisances.)
We have no horse in the presidential race as we often say but we sure have an issue with Government Sachs, the bank which long ago should have died but was saved by virtue of its connections in government. (Not the only bank.) The bank then, post-2008 went on to expand further around the world all fresh and “recapitalized.” (Recapitalized with your money.)
For the record, we have been calling this for a good while now. We warned of slowing in the Ultimate Crony Capitalist State, China. We warned that the great neo-Keynesian experiment was destined for an ugly end (and we are by no means the only ones who said this).
Is this THE turn? It looks increasingly so but the next few months will show us for sure. Will it be worse than 2008?
The petrodollar system is an area of particular interest to me and it has been for a very long time. I am fascinated by the secrecy which surrounds the system, the massive political implications of the system, why it was created in the first place, and why it plays, I believe anyway, an important roll in monetary policy. (Though some disagree with me.)
I even wrote 3/4 of a reasonably good novel focused on the petrodollar.
Here’s another list to cross check with whether your senator voted “yea” on the Omnibus bill.
I look at it this way. We are starting to get a very clear picture of who is on what side of the great crony debate. Those who think that the status quo can continue, even at this late date, need a wake up call in November.
A very interesting examination of crony capitalism in Israel. Surprise surprise the political class there gets the pay and privilege too.
The author also points out a very key point. Industries which are protected by regulation tend to get fat and develop an insider, old boys club mentality. Where there is competition companies are lean and productivity and ingenuity are rewarded. This creates opportunities for newcomers who are skilled and work hard even if they aren’t in the “club.”
Where does the time go? (And the tax money?)
We think. All indications are that it will happen though. Doesn’t it make sense for the whole world to wait with bated breath for the decision of an economic politburo? So capitalistic.
Well, this is right on the money. Mr. Walton is the Chairman of Rappahannock Ventures LLC, and on the board of trustees at the Heritage Foundation. Excellent speech.
Illiquidity, ah yes, it makes yet another appearance. I remember as I watched markets implode in 2008 the inability to get off of assets was of serious concern to everyone. “How are we going get rid of this crap?” Many a morning I remember getting up and looking at the tape, which for a long stretch was unmercifully bad, and hearing about how such and such was “illiquid,” how the markets generally lacked liquidity etc.
This is not news to many of our readers. Of course some will blame Reagan. Some will blame NAFTA. Some will blame Obama. But fundamentally the 2 things which are driving the erosion of the middle class, as I see it, are the financialization of the economy and over regulation. (Taxation is an important factor too.)
Isn’t this a FANTASTIC “recovery”?
Yeah, I mean even a stopped clock is right 2 times a day, but the Fed doesn’t seem to be right – ever.
Image: The Economist
The free market is often blamed for pollution. The the unbridled greed of capitalists is the reason rivers flow red, forests are felled, and air is made hard to breathe. And historically speaking there is some truth to this. However what is often left out of this critique is the degree to which governments encourage environmentally damaging actions.