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.
The Few and the Proud
President Coolidge empowered the American people, strengthening individual rights rather than expanding the size and scope of government. Consequently, the private sector thrived and prosperity followed.
Cronyism Undermines the Beneficial Role of Business in Society
A society whose businesses engage in cronyism instead of serving people will not be prosperous, and in America it is clear that cronyism is becoming a more common choice.
Cronyism in the Tax Code
Who really benefits from tax breaks? The answer will show us why our tax code is notoriously complex and corrupt.
A Level Playing Field is the Best Defense Against Cronyism
No sports fan wants to watch a game when the playing field is manipulated through game rigging, bribes and other corruption. In the same way, cronyism undermines the natural capacity of a free economy to create value by destroying competition among the players — businesses, in this case.
Congressional Insider Trading Undermines Impartial Rule of Law
Everyone from congressmen to senators, from Speaker of the House to Minority Leader, is claimed to have engaged in using non-public information or the power of their office directly to make financial gains.
All We Want for Christmas
The Economic Freedom Team asks Santa for just one thing this Christmas. Will their wishes come true?
Cronyism Car Wreck
Cronyism is great for the companies getting bailed out, and the politicians who get their support. But having your money taken so that a politically well-connected industry can avoid bankruptcy is not nice, especially when it costs tens of billions of dollars.
Cronyism in America
Protesters are rightly angry that big corporations and big government are working together to benefit at the expense of everyone else. In this video, three professors discuss the causes and solutions to Cronyism in America.
Crony Christmas
The idea of taxing Christmas trees seems unbelievable, and yet this Christmas that was almost a reality. But what’s at the root of the problem?
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.
The Few and the Proud
President Coolidge empowered the American people, strengthening individual rights rather than expanding the size and scope of government. Consequently, the private sector thrived and prosperity followed.
Cronyism Undermines the Beneficial Role of Business in Society
A society whose businesses engage in cronyism instead of serving people will not be prosperous, and in America it is clear that cronyism is becoming a more common choice.
A Level Playing Field is the Best Defense Against Cronyism
No sports fan wants to watch a game when the playing field is manipulated through game rigging, bribes and other corruption. In the same way, cronyism undermines the natural capacity of a free economy to create value by destroying competition among the players — businesses, in this case.
Congressional Insider Trading Undermines Impartial Rule of Law
Everyone from congressmen to senators, from Speaker of the House to Minority Leader, is claimed to have engaged in using non-public information or the power of their office directly to make financial gains.
All We Want for Christmas
The Economic Freedom Team asks Santa for just one thing this Christmas. Will their wishes come true?
Cronyism Car Wreck
Cronyism is great for the companies getting bailed out, and the politicians who get their support. But having your money taken so that a politically well-connected industry can avoid bankruptcy is not nice, especially when it costs tens of billions of dollars.
Crony Christmas
The idea of taxing Christmas trees seems unbelievable, and yet this Christmas that was almost a reality. But what’s at the root of the problem?
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.
Occupy Wall Street & Capitalism: A Professor’s Response
Economics Professor Chris Coyne talks about OWS, capitalism, and cronyism.
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:
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Cronyism in the Tax Code
Who really benefits from tax breaks? The answer will show us why our tax code is notoriously complex and corrupt.
Cronyism in America
Protesters are rightly angry that big corporations and big government are working together to benefit at the expense of everyone else. In this video, three professors discuss the causes and solutions to Cronyism in America.
Occupy Wall Street & Capitalism: A Professor’s Response
Economics Professor Chris Coyne talks about OWS, capitalism, and cronyism.
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