Friday, March 25, 2011

Crony Capitalism Defined - Why You Should Care

What is Capitalism? Think about it for a minute...and then in your head, or aloud, say what you think it means in America, today. Perhaps surprising to you, what we have today in America is NOT capitalism. Thanks to Government's cushy relationship with big business, we have been blessed with something called "Crony Capitalism" over the past decades.

What is Crony Capitalism?

Wikipedia defines Crony Capitalism as, "an allegedly capitalist economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, and so forth.  Crony capitalism is believed to arise when political cronyism spills over into the business world; self-serving friendships and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals."

Why You Should Care

Crony Capitalism is not new. Politicians and big business have been benefitting equally from Crony Capitalism since the creation of the Federal Reserve System in 1913. The Federal Reserve System was created after major banks colluded to create a Central Bank in the United States of America. The Federal Reserve System is the third Central Bank in our history. The Federal Reserve System controls our monetary policy, creation of the dollar, interest rate price fixing, and is supposed to keep inflation in check. Since the Federal Reserve's creation, the dollar of 1913 is worth about 2 cents today. Granted, wages ARE higher but inflation has run rampant under our fiat currency, as it always has throughout the history of fiat currencies. This is just one such example of Crony Capitalism and is an entirely other issue in itself.

There is no major political party (republican/democrat) that will help fix any problem you have with big business, corporations, or Crony Capitalism. Both major parties have far too much to gain by continuing the status quo. It's not a coincidence that Congressional approval ratings are at an all-time low but the same worthless politicians keep getting elected year after year. Too much government creates the "problems" and then when a bubble is created and eventually bursts (as they always do), Government then claims they can solve the problems they created with MORE SPENDING and MORE GOVERNMENT. It's insanity.

Look at our current debt levels. In the past, how many times have you heard republicans and democrats bicker over - military/defense spending, social security, medicare, and medicaid? They usually pit one against the other...not anymore. They realize that continuing the status quo keeps them both in power, and prevents any other political party from rising up in opposition.  Sure, the majority may shift from time to time but nothing actually changes. Why do you think there are NO proposed cuts to any of those programs in the budget even though we are broke as a joke? Somehow NPR makes headlines though!

I don't believe the huge corporations we have today would even exist in a Libertarian society because there would be no lobbyists, fat cats, or PACs to bribe government officials for tax breaks, special permits, and subsidies allowing for the creation of them (big corporations) in the first place… Thus, Crony Capitalism wouldn't exist. You wouldn't have General Electric paying $0 in taxes on a $5 Billion profit and its CEO, Jeffrey Immelt, as the head President Obama's "Council on Jobs and Competitiveness."  STEP 1: DON'T PAY TAXES!

Those big corporations, like GE, only exist today due to their cushy relationship with Government (corporatism and corporatist politicians FTL). Government, even the business itself for that matter, doesn't care if the business makes their customers happy or even run a good business. They don't even care if they are so reckless in their actions that it might put them OUT of business (they will just be bailed out to allow the status quo to continue). Government DOES care that the big corporations have high dollar lobbyists and donate largely to their campaigns. Again, in a Libertarian society - not possible.

I will admit, some businesses are just plain evil and don't care about you or I and only care about the bottom line. This is clear if you look at some of the major corporations on the New York Stock Exchange. But, not all corporations are big and not all corporations are bad. There are some good ones out there, people with morals like you and I, but they don't benefit from a cushy government relationship and are often run out of business…they have to actually pay taxes!

Capitalism in a true sense, meaning NO government handouts, works. It rewards the little guy and those who aren't just in it for the money and greed. In a truly capitalist society, or FREE society if you will, you the consumer have the ultimate power. You don't have to do business with those you don't want to, those nasty - greedy - evil companies. With Crony Capitalism it seems that only those "bad" businesses are left to choose from, so you don't even have the option to vote with your dollars anymore.

You have to make customers happy, and run a decent business.  A business that actually succeeds on its own merits, not because of government intervention and handouts. If you do run a bad business, it should fail…like every Wall Street Bank that got a bailout, and the Auto Industry (Unions are just as guilty as corporations for Crony Capitalism, perhaps worse, as Unions are exempt from Federal Antitrust and Price Fixing Laws). Do you know why certain companies got bailouts and others didn't? Crony Capitalism.

CAPITALISM is fine, CRONY CAPITALISM is evil and what we have in the United States.

With a Republican OR Democrat in office we will always have reckless spending, corporations in bed with government, freedoms eroded, sovereign immunity for the government - allowing them to do whatever they want without fear of prosecution, and you and I left holding the bag.

Ron Paul 2012


No comments:

Post a Comment