Cronyism occurs when an individual or organization colludes with government officials to get forced benefits they could not have otherwise obtained voluntarily. Those benefits come at the expense of consumers, taxpayers, and everyone working hard to compete in the marketplace. Visit CronyChronicles.org for more information about cronyism.
In the News: Who Will Pay More for Health Care? Young Men
For men in their 20’s “making it” will now be a bit harder because of large increases in their health care payments.
In the News: Helping ‘Friends’ or Helping the Poor?
Unfortunately, acts of charity can serve as a front for selfish interests. U.S. foreign food aid is one example.
In the News: Taxi Company Wins Right to Operate in Denver
Catching a cab in Denver may soon be easier and less expensive thanks to a recent ruling from the Colorado Supreme Court.
In the News: Yankees Banish StubHub While Scalpers Operate Freely Near Gates
Recently, the Yankees used New York’s anti-scalping law to keep StubHub from operating near the stadium.
In the News: Fed Up With the Health Care Act, Doctors Increasingly Prefer Cash
Your next trip to the doctor may mean stopping at the ATM.
In the News: Alabama Brings Back Eminent Domain for Private Gain
Alabama home and land owners recently learned that their plans come second to those of the state.
In the News: Big Sugar Is Set for a Sweet Bailout
Have a “sweet tooth?” Your sugary treats may soon get a bit more expensive.
In the News: The Unhappy, Big-Government Feeding 100th Birthday of America’s Income Tax
Happy 100th birthday U.S. Federal Income Tax! Well … not happy for everyone.
“Pro-Business” or “Pro-Market”? And What’s the Difference?
Surprising as it may seem, “Pro-business” does not necessarily mean “pro-market.”
In the News: Why We Should Care About America’s Fading Economic Freedom
The word at the water cooler is that the U.S. has fallen to 18th in economic freedom. So what’s the big deal? Professor Antony Davies of Duquesne University explains in U.S. News & World Report that economic freedom benefits just about everyone. “The conclusion is simple: Economic freedom yields beneficial results. … data bears out [...]
The Chevy Volt: Good Intentions Aren’t Good Enough
Last weekend Detroit hosted the annual Woodward Dream Cruise, the world’s largest one-day automotive event. Focusing on America’s classic car heritage, the event also served as a reminder of how far the government-subsidized General Motors has fallen since its earlier classics. Take for example the Chevy Volt …
Occupy Memphis, Tea Party members meet
Member of Occupy Memphis and the local Tea Party met to discuss different issues, and one issue they agreed on was their opposition to cronyism:
By the end, the Occupy Memphis members and their audience reached common ground on some issues, such as their perception that the government and politicians no longer listen to and serve the people they represent.
They also found some agreement in their stances against taxpayer-sponsored government bailouts and “crony capitalism,” the idea that close ties between lobbyists, businesses, and other self-serving interests can influence government officials and the exercise of capitalism.
Crony capitalism targeted after book release, recent reports
Jackie Hicken of Deseret News writes about how the discussion of cronyism is on the rise because of a new book release and other factors:
With the release of a new book, ongoing protests and recent reports about Congressional insider trading and stimulus corruption, the phrase “crony capitalism” is getting noticed.
When Occupy Memphis members met with tea party members on Nov. 17, the Associated Press reported they found common ground in their opposition to crony capitalism, where ties between lobbyists, businesses and other interests influence government and hurt free-market capitalism.
How Paulson Gave Hedge Funds Advance Word
A Bloomberg article talks about how during the financial crisis in 2008 former Treasury Secretary Henry Paulson talked to a group of hedge fund managers about non-public information that they could have used to their advantage:
William Black, associate professor of economics and law at the University of Missouri-Kansas City, can’t understand why Paulson felt impelled to share the Treasury Department’s plan with the fund managers.
“You just never ever do that as a government regulator — transmit nonpublic market information to market participants,” says Black, who’s a former general counsel at the Federal Home Loan Bank of San Francisco. “There were no legitimate reasons for those disclosures.”
Fairness and the ‘Occupy’ Movement
Arthur Brooks writes an opinion piece in the WSJ about the occupiers, and cronyism:
This brings us to a second Occupy goal that free-enterprise advocates can embrace: denouncing crony capitalism. Like statism, crony capitalism is just a way to use government to weaken competition for the sake of those who are powerful yet unwilling or unable to compete.
‘Crony capitalism’ finding a foothold in Illinois?
An editorial in today’s Peoria PjStar laments that cronyism is increasing in Illinois:
Few would dispute, as these corporations contend, that the economic climate in Illinois falls well short of being conducive to job creation. That is borne out by statistics that show huge losses – in workers and the tax revenue they produce – over the last 15 years. It’s also true that with deals like these Illinois has pushed the door wide open to any company capable of saying the word “leave,” and there will be no end to these demands.
The Fed and Crony Capitalism
From the Coyote blog, it looks like the Federal Reserve gave interest free money to some interesting groups:
Here are some of the “banks” that got close near-interest-free money from the Fed
- Verizon
- Chrysler
- Caterpillar
- Harley-Davidson
- Baxter International
Secret Fed Loans Helped Banks Net $13B
This Bloomberg articles explains how the Federal Reserve committed trillions of dollars to bail out banks, who later earned $13 billion on the deal:
The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.
Crony Capitalism Exposed
Mark A. Thiessen writes a Washington Post op-ed which addresses cronyism in Congress relating to insider trading:
Insider trading is illegal — except for members of Congress. A Wall Street executive who buys or sells stock based on insider information would face a Securities and Exchange Commission investigation and quite possibly a federal prosecutor. But senators and congressmen are free to legally trade stock based on nonpublic information they have obtained through their official positions as elected officials — and they do so on a regular basis.
Crony Capitalism Comes Home
Nicholas Kristof writes a NYT op-ed which laments the growth of cronyism in America, and calls for an end to it:
I’m as passionate a believer in capitalism as anyone. My Krzysztofowicz cousins (who didn’t shorten the family name) lived in Poland, and their experience with Communism taught me that the way to raise living standards is capitalism.
But, in recent years, some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us. They’re not evil at all. But when the system allows you more than your fair share, it’s human to grab. That’s what explains featherbedding by both unions and tycoons, and both are impediments to a well-functioning market economy.
When I lived in Asia and covered the financial crisis there in the late 1990s, American government officials spoke scathingly about “crony capitalism” in the region.
Crony Capitalism: The Inevitable Outcome Of Overreaching Government
A Forbes op-ed by Bill Frezza says that cronyism is the inevitable outcome of overreaching government:
Would a farmer who put out a trough of slop be surprised if it attracted a bunch of pigs? Then why are activists who promote enlarging the size and scope of government shocked when one program after another is hijacked by corporations that find it easier to seek favors in Washington than customers in the marketplace? And, knowing that such corruption is inevitable, why do mainstream media dismiss those who advocate curtailing government powers as corporate stooges?
Cronyism: a Threat to Economic Freedom
The Crony Chronicles puts all material related to cronyism in one easily accessible place.
To learn more about what cronyism is, and why it is a problem, watch economist Russ Robert’s testimony to Congress on the issue:
In the News: Why We Should Care About America’s Fading Economic Freedom
The word at the water cooler is that the U.S. has fallen to 18th in economic freedom. So what’s the big deal? Professor Antony Davies of Duquesne University explains in U.S. News & World Report that economic freedom benefits just about everyone. “The conclusion is simple: Economic freedom yields beneficial results. … data bears out [...]
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