Crony Capitalism: The Inevitable Outcome Of Overreaching Government

Crony Capitalism: The Inevitable Outcome Of Overreaching Government

November 15, 2011
Originally published in Forbes

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?

What leads anyone to believe that unconstrained power can be channeled in ways that don’t favor the politically connected? And why are the politicians who repeatedly put out the slop troughs, then theatrically rail against the pigs, rarely penalized at the polls?

How long will people continue to believe the “too big to fail” fear-mongering propaganda which both parties use to justify squandering public funds to socialize losses and privatize gains? How many times does a court economist have to be wrong about the impact of expensive economic interventions before we add him to the unemployment rolls?

If protestors are angry that Wall Street interests control the government, why do they want to increase the government’s role in the economy rather than decrease it? What makes them think that banging on drums and spouting incoherent slogans is a more effective way to influence politicians than the proven practice of putting them on the payroll? What would happen to the flow of campaign contributions from crony capitalists if money could no longer buy legislative and regulatory favors? And why do anti-corporate activists keep fruitlessly trying to cut off the flow of money instead of working to ban the favors that attract it?

How does the failure to distinguish between honestly earning profits by meeting customers’ needs and getting rich by looting the public treasury make it possible to end the latter practice without destroying the former? And if we cannot define and promote a sustainable form of capitalism weaned from government corruption, where are all the jobs the nation needs supposed to come from?

How disorderly can class warfare-inspired protests grow, while police are instructed to look the other way, before violence becomes a widespread means of political expression? Will Oakland, Portland, and other cities burn when springtime rekindles the Obamaville encampments that serve as the most potent symbol of this failed presidency? How can politicians, union leaders, and other opportunists not realize that encouraging this mindless thuggery will eventually blow up in their faces? Will the American public recoil when innocent people are killed solely because they work for politically disfavored corporations, or will they shrug it off as collateral damage, as did the Greeks?

When the government hands out other people’s money to crony capitalists promising “green” jobs, does this magically turn them into effective innovators? How are experimental technologies based on ideological fantasies supposed to achieve commercial sustainability by being rushed to market for purely political considerations? How does crippling the evolution of proven energy businesses through capricious regulations and endless environmental reviews make our energy future more secure, our economy more robust, or high paying jobs more plentiful?

As voters weigh the competing narratives of where our country went wrong and how to get it back on track, will they gain sufficient clarity to deliver a watershed election or will we face four more years of political dysfunction? If the latter, how long can we stay on autopilot careening downhill before we face an ugly crackup? If the former, where will the leadership come from to deliver the hope we were promised four years ago—and the prosperity we created for ourselves 30 years ago, the last time the American people realized that hyperactive government is the problem and not the solution?