Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Video: What exactly is crony capitalism, anyway?
Hot Air.com ^ | February 22, 2016 | ED MORRISEY

Posted on 02/22/2016 5:48:05 PM PST by Kaslin

We hear the term “crony capitalism” get tossed around a lot but … what does it actually mean? We should find out soon, considering that the current Republican front-runner has been held up as an example of a practitioner of the art. It’s a little more complex than just twisting arms on zoning codes, though, and Prager University engaged Jay Cost to explain the corrosive corruption the term signifies:

What is Crony Capitalism?

Capitalism is moral because it is premised on a voluntary exchange between independent parties - who agree to the deal only because it creates value for everybody. Crony capitalism is immoral because one of the parties—the government—has been bought off.

This creates three problems. First, it is unfair. Politicians are spending the public's money, but not for the public interest. Instead, they reward friends, supporters, or themselves. Our Constitution grants Congress the power to provide for the general welfare. Crony capitalism violates this sacred principle.

Second, it is incredibly wasteful. In our cereal example, the government overpaid by going with Ted instead of Steve. That's obviously a waste of taxpayer money. In fact, it is really stealing from the taxpayer. Here’s more waste. Ted had to spend money to lobby the government to get the contract. So, he didn't get all of that dollar out of the transaction. That's money that could have been spent making a better product or used in some other constructive way. Economists call this deadweight loss. And it can be substantial.

Moreover, crony capitalism distorts the broader economy. In some industries—like healthcare, student loans, home mortgages, and aerospace-the government is one of the biggest purchasers of goods or services. So its politicized decisions can have wide-ranging and detrimental effects. An entire industry can become, in effect, a client of the government. When that happens its goal is not to build a better mousetrap, but to keep politicians happy. How much does crony capitalism cost society per year? It is hard to say precisely, but the number reaches into the tens of billions of dollars, maybe beyond.

Third, it tempts politicians to break the law. Once politicians feel free to spend the public's money for their own political purposes, they are just a hop-skip-and-a-jump away from doing so to line their own pockets or pump up their campaign funds or both.

 

The biggest manifestation of crony capitalism, or perhaps more plainly cronyism, in this campaign is not Donald Trump — it’s Hillary Clinton. While in the Senate and especially at the State Department, corporations poured hundreds of millions of dollars into both the Clinton Foundation and the Clintons’ pockets. She and Bill took in $57.5 million in speaking fees largely from private-sector businesses during her four years as Secretary of State, including from entities having business with the State Department and the US government. The Uranium One deal was just one such example that resulted in much of America’s uranium stores ending up under the control of a Russian consortium.

Comparatively speaking, Trump’s gladhanding and favor-currying looks relatively clean. He never asked for a public trust, he argues, but had to work deals in the environment created by others. And he has a point.


TOPICS: Culture/Society; Editorial
KEYWORDS: cronycapitalism; donaldtrump; hillaryclinton; prageruniversity
Navigation: use the links below to view more comments.
first 1-2021-26 next last

1 posted on 02/22/2016 5:48:05 PM PST by Kaslin
[ Post Reply | Private Reply | View Replies]

To: Kaslin

The left are crony capitalists. They pull it off by depicting their behavior as “naked unregulated capitalism”.


2 posted on 02/22/2016 5:51:15 PM PST by Shadow44
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

So...does it count as crony capitalism if you support getting the government to amnesty illegal aliens so that business owners can hire them on the cheap instead of hiring American workers?


3 posted on 02/22/2016 5:51:45 PM PST by Yashcheritsiy (You can't have a constitution without a country to go with it)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Yashcheritsiy

What a question Morrisey is an idiot!


4 posted on 02/22/2016 5:55:17 PM PST by stocksthatgoup (Trump for me. I want to see Hillary, Bernie or any demoncrap crushed)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Kaslin
An example of crony-capitalism is when government and corporations conspire to raise the minimum wage for the purpose of driving small businesses out of business.

The big-government/big-union/big-corporate crony-capitalist complex doesn't care if the pie gets smaller, they just want the whole pie.

5 posted on 02/22/2016 5:59:25 PM PST by E. Pluribus Unum ("The goal of socialism is communism... Hatred is the basis of communism" --Vladimir Lenin)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Trump is more of a corny capitalist than a crony capitalist.


6 posted on 02/22/2016 6:01:59 PM PST by who_would_fardels_bear
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

7 posted on 02/22/2016 6:02:54 PM PST by TexasCajun (#BlackViolenceMatters)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

The GOP-E!


8 posted on 02/22/2016 6:04:32 PM PST by cowboyusa
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

It’s a term that has been abused into oblivion and can mean anything. Every time your brother-in-law gets you a “deal” on something you are a crony capitalist.

It’s similar to what Republicans have done to the term “conservative”.

Crony capitalism is really anti-capitalism and “conservatives” are dumb to fall for using the term.


9 posted on 02/22/2016 6:08:03 PM PST by SaxxonWoods (Trump and/or Cruz, it's all good)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

In a sense, Crony Capitalism is a form of National Socialism. acronym....NAZI


10 posted on 02/22/2016 6:09:32 PM PST by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Crony capitalism is nepotism/favoritism. Thats in a nutshell what it is.


11 posted on 02/22/2016 6:10:51 PM PST by Secret Agent Man (Gone Galt; Not averse to Going Bronson.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin
A common misunderstanding of the Constitution is repeated in the above text:
From the Preamble:

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

Note that the writer here states:
" Our Constitution grants Congress the power to provide for the general welfare. Crony capitalism violates this sacred principle."

Let's hear what Thomas Jefferson said on the subject of "providing" for the general welfare:

NOTE: In this letter to Albert Gallatin dated June 16, 1817, Thomas Jefferson discussed the General Welfare Clause after President Monroe had vetoed a bill for the improvement of the Cumberland Road. Monroe did not believe the work fell within the scope of the Clause. 

You will have learned that an act for internal improvement, after passing both Houses, was negatived by the President. The act was founded, avowedly, on the principle that the phrase in the constitution which authorizes Congress “to lay taxes, to pay the debts and provide for the general welfare,” was an extension of the powers specifically enumerated to whatever would promote the general welfare; and this, you know, was the federal doctrine.

Whereas, our tenet ever was, and, indeed, it is almost the only landmark which now divides the federalists from the republicans, that Congress had not unlimited powers to provide for the general welfare, but were restrained to those specifically enumerated; and that, as it was never meant they should provide for that welfare but by the exercise of the enumerated powers, so it could not have been meant they should raise money for purposes which the enumeration did not place under their action; consequently, that the specification of powers is a limitation of the purposes for which they may raise money.

I think the passage and rejection of this bill a fortunate incident. Every State will certainly concede the power; and this will be a national confirmation of the grounds of appeal to them, and will settle forever the meaning of this phrase, which, by a mere grammatical quibble, has countenanced the General Government in a claim of universal power.

For in the phrase, “to lay taxes, to pay the debts and provide for the general welfare,” it is a mere question of syntax, whether the two last infinitives are governed by the first or are distinct and co-ordinate powers; a question unequivocally decided by the exact definition of powers immediately following. It is fortunate for another reason, as the States, in conceding the power, will modify it, either by requiring the federal ratio of expense in each State, or otherwise, so as to secure us against its partial exercise. Without this caution, intrigue, negotiation, and the barter of votes might become as habitual in Congress, as they are in those legislatures which have the appointment of officers, and which, with us, is called “logging,” the term of the farmers for their exchanges of aid in rolling together the logs of their newly-cleared grounds.


12 posted on 02/22/2016 6:13:22 PM PST by loveliberty2
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Crony capitalism is not capitalism.


13 posted on 02/22/2016 6:17:04 PM PST by Hoodat (Article 4, Section 4)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

What it comes down to is this: Crony capitalism is socialism.


14 posted on 02/22/2016 6:20:07 PM PST by Brilliant
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Making a million a month giving speeches to Banks, a la Hillary.


15 posted on 02/22/2016 6:27:52 PM PST by heights
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

What does crony-capitalism look like???

16 posted on 02/22/2016 6:31:03 PM PST by PGR88
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin
A large reduction in the size of government is the only way to deal with crony capitalism.

If politicians didn't have favors to dole out worth buying, then the practice would end.

As long as politicians do have favors to dole out, the large corporations and the politicians will find a way to get in bed with each other.

This, of course, is one of the fallacies behind Bernie Sanders' approach. He essentially says that he will fight against crony capitalism by increasing the size and power of the Federal government. But all that would do is make it even more worthwhile for companies to pay off politicians for relief.

17 posted on 02/22/2016 6:31:32 PM PST by Persephone Kore
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Cruz’s plan to eliminate government subsidies should pretty much end lobbyists if he could get it passed.


18 posted on 02/22/2016 6:35:13 PM PST by libbylu (Cruz: The truth with a smile.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Hillary “lost” SIX BILLION DOLLARS at State.

Ran weapons to Muslim terrorists and then got the Ambassador who did it for her raped and killed.

Lit the Middle East on fire and openly assassinated a head of State and laughed about it on television.

And opened up our entire classified security system to all of our enemies in the entire world.

Crony capitalism? No one has even remotely come close to what she’s done for money and power, and no one ever will.


19 posted on 02/22/2016 6:37:41 PM PST by Talisker (One who commands, must obey.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Jeffrey Immelt, GE CEO, king of crony capitalism.


20 posted on 02/22/2016 6:37:50 PM PST by XEHRpa
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-26 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson