Tag Archives: cronyism

The Clerisy and the Kakistocracy and the Administrative State

If anything, both Left and Right have developed a newly intense resentment of the way in which purely private actors can exercise tremendous influence over their lives: corporate mergers and restructurings take away jobs and upend the economic situation of communities dependent on them; Facebook and Twitter endeavor to silence unpopular political views, or else are used as vehicles for ochlocratic attacks on hapless Starbucks staffers and Chipotle managers; in 2008–09, the world economy was convulsed by the fact that a great many Wall Street firms made bad investments that they did not quite even understand, necessitating trillions of dollars in bailouts and “quantitative easing” to stave off economic disaster. It is easier for a man to walk away from his wife and children than from his credit-card debt or student loans. Nobody seems to really know what his health insurance will cover — or what it will cover the day after tomorrow. A third of the teachers participating in a grant program found themselves saddled with loans — loans they had never signed up for, sometimes amounting to tens of thousands of dollars —because of paperwork issues. Innocent men and women are wrongly prosecuted and end up financially ruined even when they escape jail, and even as prosecutors boldly boast about abusing their powers.

The burden of these developments always seems to fall on those who do not have much money or power. You miss filing a 1040EZ one year and you’ll get your bank account hijacked by the IRS; Lois Lerner hijacks the entire IRS for a political project and she ends up with pension that’s twice what most American households earn in a year. Corporate executives flit from one gilt perch to the next, politicians flout both law and morality without real consequence, and their cronies and minions rarely miss a paycheck. Meanwhile, the New York Times is full of advertisements for Rolex and Cartier, Tiffany and Zegna — and stories about how nobody can really be expected to get by on $200,000 a year.

In Francis Fukuyama’s magisterial Origins of Political Order, he specifies three things that undergird the development of political development: the state, the rule of law, and accountability. The first we have plenty of — more of than we need, really. The other two . . . less so. Irrespective of how you feel about the current legal efforts being made against President Trump, it is impossible for any intelligent person to look at the situation and conclude that anybody — anybody — involved in this mess is simply working to apply the law rather than conducting a political jihad or counter-jihad through legal means — lawfare, as they call it. The rule of law took a beating during the Obama administration, and the chaos of the Trump administration does not seem likely to contribute much to its recuperation.

Who’s in Charge Here?

Crony capitalism and statolatry all the way down.

Superman Politics

The Carrier bailout is awful, of course. It is a case of two politicians’ using public funds to bribe a business into doing things that benefit them personally and politically while creating no real long-term economic value. Pence, who dropped his free-market principles like the world’s hottest potato once he got within sniffing distance of presidential power, can burnish his populist credentials at the taxpayers’ expense, and Trump can get ready to flit on to the next publicity stunt.

But the emerging “Superman” politics here are truly poisonous. One of the genre conventions of superhero stories is the compression of all the world’s drama into the immediate presence of the hero — only his actions and intentions are relevant. People may be dying all over the world, but Superman saves Lois Lane. (Comic-book movies have lately subverted that convention by focusing on the collateral damage done by superheroes to the cities in which they live.) What that means in the context of our contemporary presidential politics is that no one takes any note of the fact that Carrier is not the only HVAC company in the United States or the only industrial concern in Indiana. Carrier has competitors that employ Americans, pay taxes, and produce real economic value, and they have been put at a relative disadvantage by the political favoritism extended to Carrier. What about them? They’re not on the stage, so they do not matter.

What is important to understand here is that this is not part of an economic-development agenda: It is theater. It is an adolescent fantasy of political power, and wherever Superman happens to land is where the action is. Nothing else is relevant. It does not matter that there is no broader logic at work: Small displays of efficacy can work to create an illusion of general efficacy. It is busyness as business.

. . .

Trump’s big idea so far is spending $7 million of other people’s money to delay an embarrassing headline. Some deal. Some deal-maker.

Trump’s Superman Style of Politics

Cronyism has a new moral preener and Crony Capitalist in Chief.

Ozymandias

Crony Capitalism in DC. Again.

Five years ago, a new quirky-sounding consumer-rights group set up shop in a sleepy corner of Capitol Hill. “Consumers for Paper Options is a group of individuals and organizations who believe paper-based communications are critically important for millions of Americans,” the group explained in a press release, “especially those who are not yet part of the online community.”

This week, Consumers for Paper Options scored a big win, according to the Wall Street Journal. Securities and Exchange Commission chairman Mary Jo White has abandoned her plan to loosen rules about the need to mail paper documents to investors in mutual funds.

Mutual funds were lobbying for more freedom when it came to mailing prospectuses — those exhaustive, bulky, trash-can-bound explanations of the contents of your fund. In short, the funds wanted to be free to make electronic delivery the default, while allowing investors to insist on paper delivery. This is an obvious common-sense reform which would save whole forests of trees.

Consumers for Paper Options fought back. The group warned that changing the default from paper to electronic delivery would “Confuse potentially millions of investors who suddenly stop seeing important printed fund performance material from investment firms.”

. . .

This is almost laughable: A D.C. lobbyist forming a sham “consumer” protection to fight for federal rules requiring more paper and envelopes be wasted, while getting paid by the envelope lobby.

But the envelope CEOs and the paper lobbyists aren’t the only ones who care about keeping this junkmail flowing. Those paper mills that exist in the U.S. are deeply threatened by digitization. Among the shrinking list of things that go on paper these days are things the government forces people to put on paper. Allow mutual funds to mail fewer prospectuses, and those paper mills will lose a significant amount of work.

The employees at these mills will see their hours reduced, if they’re not simply laid off. The added costs of mailing me unwanted paper nibbles away the value of my retirement account, but is a tiny uptick in my 401(k) really worth laying off paper mill worker in East Millinocket, Maine?

. . .

Here’s the thing about the federal rule requiring the mailing of the prospectus: It’s absurd and wasteful, and it differs only in degree from most subsidies whose defenders use the same “save the jobs” rhetoric.

In a federal mandate for waste, envelope lobby reveals Washington

“Lobbying”

What if you could bet on Wednesday’s NBA game between Golden State and Oklahoma City, and before the game or at least before the final buzzer, you could lobby the referees and the league to change the rules? Maybe you would bet on Oklahoma City and then lobby to abolish the three-point shot.

Hedge funds and other investment firms are playing that very game in Washington, D.C., these days. Recently, Capitol Hill has seen a blitz of lobbying on how Puerto Rico should handle its debt amid fiscal disaster, and how Treasury should deal with private investors in bailed out government-sponsored enterprises Fannie Mae and Freddie Mac.

Behind the barrage of lobbying, op-eds and public relations is a handful of hedge funds who have gambled one way or another on GSE stock or Puerto Rican debt, in the hope that they could pull enough strings in Washington to make big bucks.

. . .

Investors allocating capital according to which policy tweaks they think they can win doesn’t sound like the type of capitalism that maximizes economic efficiency. It’s just public-policy profiteering.

As government gets involved in more parts of the economy, hedge funds will increasingly engage in this public-policy profiteering. This will make lobbying on these arcane issues more common and more intense.

So maybe it’s a good time to be long on K Street.

Puerto Rico’s debt, Fannie Mae’s stock, and public-policy profiteering

Cronyism is a Mystery

[L]iberal correctness trumps all lesser progressive agendas. The master ring of leftwing politics rules the lesser rings of race, class, gender, immigration, and environment. Ideology alone makes Barack Obama, prep-schooled in Honolulu, a more authentic representative of the Jim Crow South than Clarence Thomas, or Bill Richardson more Latino than Marco Rubio.

One Left-Wing Ring to Rule Them All

Cronyism and Statolatry

Washington, DC – Cronyism – Ozymandias


Is Big Business a Danger to Economic Liberty?

This all reflects the aspect of lobbying most observers miss: the lobbyists are often more closely bound to the politicians they are supposedly swaying than they are to the clients they are supposedly representing. The result: the lobbyists serve largely to extract money from companies, and use that money to help their political friends, whose success will ensure the lobbyists more clients.


Big Business Loves Big Government: Cronyism in American Politics

This is how wealth begets wealth, power begets power, and how on K Street, they are all intermarried.

Timothy Carney

The DC Revolving Door swings wide and it swings both ways

See also, “Obama Administration Helps Wall Street Criminals Dodge Accountability Hope and Change! LOL!


Crony Capitalism as Progressive Reform

Books by Timothy Carney
The Big Ripoff
Obamanomics