The problem with the notion that pension reform is “good for Wall Street,” of course, is that pension reform is bad for Wall Street. The biggest shareholders in the world are public employee pension funds. This began back in 1984, when the California state legislature placed a citizen’s initiative onto the ballot, Prop. 21, that “deleted constitutional restrictions and limitations on the purchase of corporate stock by public retirement systems.” Scarcely understood and narrowly passed, Prop. 21 turned California’s government pension funds into the biggest gamblers on Wall Street.
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 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.
The income tax is absolutely crazy if one takes a moment to think about it. We’ve become so conditioned to accept it that we don’t even realize how ridiculous it is. The government taxes one for being productive, for creating income for one’s family, for doing one’s part to grow the economy. It doesn’t make any sense.
But there is a vast government infrastructure which depends on your money. There is also a political constituency which believes that it is the government’s duty to take income from some in the name of “social justice.” That this money happens to flow back to many of the people calling for “social justice” is a coincidence of course.
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.
I do a version of this.
(From War is Boring)
That’s $45 billion dollars the military can’t track and the reason is … ridiculous. According to SIGAR, the Pentagon didn’t check a box on an electronic form when it filed the information in government databases.
The truth is some (many) people just want someone to make decisions for them. I am unsure if it is a genetic disposition or whether it is socialization or whether it is both. All I know is some people do not want to control their own lives. They are more comfortable with someone at the helm. They are comforted by a horizon which is limited and defined by others.
Strangely these same people also want to limit the lives of those who prefer to be free.
This is a pretty interesting list. I particularly like the following;
7. Payments to dead federal workers cost more than NASA’s mission to Pluto
Let’s just say that there is a reason why some people think that they are “taxed enough already.”
Now who isn’t paying their “fair share” of taxes?
Well your conspiracy buddies on Facebook were right I guess. Arkansas may start coming after drivers for a tax on miles driven. Going to work? Pay a tax. Going to church? Pay a tax. Driving to school? Pay a tax. Want to exist as a human being in relatively rural Arkansas where one has to drive everywhere? Pay a tax.
It should be noted that both the upper and lower houses of the state legislature along with the governorship in Arkansas are all controlled by the Republican Party.
Don’t vote? You get a fine. How Mr. Obama plans on doing this without a voter ID law is beyond me however.
Fundamentally some people, and it appears that Mr. Obama is one of them, just don’t believe that anything is outside of the purview of the state. Your health, your family, your job, your income, your pastimes, even your thoughts (“hate speech”) should be under the control of the great collective, by which we mean the collectivists.
Isn’t it nice when giant corporations (such as Boeing) and government agencies (such as the Import-Export Bank of the United States) come together to figure out how best to jack the American taxpayer? It just makes one feel all warm and fuzzy inside. At least SOMETHING is working in Washington DC. Thank goodness.
Kill the Ex-Im Bank. We’re supposed to have free markets in this country. We definitely shouldn’t have government executives and corporate executives cuddling up with one another. We’re not France.
One doesn’t need a poll to see this. During the Obama presidency the rich have done quite well. The so called “underclass” has been largely placated. (Obama got rid of Clinton era “workfare” for instance making welfare a “life choice” again.) But the middle class, the core of America, has been hurt. There is simply no denying it. (I mean one can, but one would be wrong.)
It’s not entirely Obama’s fault. He is only a part of the puzzle, if a big part.The Federal Reserve has fundamentally undermined the economy. It has rewarded those who already had assets before the 2008 Crash with an inflated stock market. Those without assets, or those whose only “asset” is their home? Well, too bad so sad.