Crony Capitalism


Reading through their agenda, I conclude its the same old crap. More government control, rules, and bureaucracy. And, the results will be the very results they say they are trying to fix. For example, their first issue complains about special interests and so-called the rich getting the benefits of government largess. But, any legislation or regulatory change involves the input of special interests. In fact, Democrats welcome special interests to provide expertise in writing legislation. They are the experts and that’s why they’re involved. The Democrats invite the special interests that fit their agenda to help who then tilt the legislation to their benefit. The result is more bureaucracy and more complexity in the lives of the middle class they say they are trying to help. How much record-keeping do we already have for taxes, medical care, and on and on? Well, that is the result of the very government Democrats are pushing.

How about this:

Our plan for A Better Deal starts by creating millions of good-paying, full-time jobs by directly investing in our crumbling infrastructure and prioritizing small business and entrepreneurs, instead of giving tax breaks to special interests.

How are they going to “creating millions of good-paying, full-time jobs” Well, that crumbling infrastructure is located in states that have been run by Democrats, with an occasional Republican elected such as NY, NJ, CA, IL. The fiscal problem at the state level is that government employee pensions, public education, and Medicaid have consumed their budgets, leaving little budget dollars left for infrastructure. Having the federal government spend on infrastructure relieves the state governors, legislators, and judges of being responsible for the infrastructure in their states. No real reform here.

Next, “prioritizing small business and entrepreneurs, instead of giving tax breaks to special interests.” is funny because “small business” and “entrepreneurs”, from a political perspective, are special interests. “prioritizing” means giving special treatment to special interests. Democrats just hide it from the public by burdening firms with the rules then we get ticked off at the firms for acting the way they do.

Here’s another: “We will crack down on monopolies and the concentration of economic power that has led to higher prices for consumers, workers, and small business”. The monopolies in the economy are the federal, state, and local governments. Further, firms cannot raise their prices. The prices of products and services that are rising faster then general inflation are those with heavy government involvement such as college tuition and public education.

Another problem with their approach is that all this activity interferes with the peaceful, voluntary actions of the American people interacting with each other and others across borders. That interference tilts the playing field because that is how the Democrats view everything. In Progressivism, someone must lose for someone else to win.

Next, their plan “provides new tax incentives to employers that invest in workforce training and education and make sure the rules of the economy support companies that focus on long-term growth, rather than short-term profits.” That means more paperwork, meetings, and time taken away from concentrating resources on doing the work for the customers of the firm. As well, firms have strategies for the short, medium, and long terms. They may not be completely filled out, but that is not possible because the future is unknown. The details get filled in as more information is available and more knowledge acquired. That’s why 10 or 20 years plans are nonsense.

The funny thing is, if a firm invests for the long-term, the results might pay off in government antitrust action against it, see Amazon.com. They invested for the long-term by keeping the retail prices low to build market share. But, Democrats want congressional hearings on its proposed acquisition of Whole Foods Market Inc. So the people at Amazon.com invested for the long-term and they get rewarded with congressional hearings. That makes no sense unless of course the hearings are for show and graft. Ahhh, graft. Squeeze a firm so its employees make financial contributions to the party.

And let’s not forget the mess the Democrats created in the health insurance market with Obamacare — monthly premiums higher, deductibles, higher, insurers leaving markets. So all in all, the Democrats are pulling the same stunts they always do.

CNN:

One of the opposition leaders says he likes the way the streets of the capital looked Thursday morning — empty.

Freddy Guevara, vice president of the opposition-led National Assembly, posted pictures of near-empty Caracas streets to his Twitter account, saying they showed that Venezuelans there were answering the call to stay home from their jobs.

“This is Bolivar Avenue this morning. A point of pride that we emptied it like all of Caracas. We continue!” Guevara tweeted.

Venezuela, the model for central planning of the economy — which is a better description than simply calling it socialism — is producing so much pain for its citizens that they are rebelling. And in response to the failures and protests the Maduro government is trying to re-write the country’s constitution to give itself more power.

And that’s how it goes: too much government control of the economy produces too much misery — such as lines for bread, bread for god’s sake — which leads the political leaders of such stupid policy to go to extremes to continue to hold power.

President Trump:

Trump did not give details about what his administration would do to protect manufacturers, but he railed against tariffs charged by other countries and unfair trade practices.

“That includes cracking down on the predatory online sales of foreign goods, which is absolutely killing our shoppers and our shopping centers,” he said.

“Killing our shoppers”. Really? Shoppers enjoy shopping online, that’s why they do it. If they didn’t find it beneficial they’d shop in shopping centers. So its up to the shopper where to shop, not politicians. Shopping centers have to step up their game to compete with online. The heavy hand of government will stifle innovation, disadvantage their competitors, and freeze the current situation. Improvements will cease. That’s why the country of Cuba is stuck in the 1950’s.

That’s not sustainable. What is sustainable is free market competition that will continually produce what’s best for consumers and producers. That’s what he and Republicans claim to want in health care, so the same principle applies to retail.

Here.

Senator Rand Paul (R, KY):

Obamacare regulations? Still here. Taxes? Many still in place, totaling hundreds of billions of dollars.

Insurance company bailouts? Those, too. Remember when Republicans complained about Obamacare’s risk corridors? Remember when we called the corridors nothing more than insurance company bailouts? I remember when one prominent GOP candidate during a presidential debate explicitly called out the Obamacare risk corridors as a bailout to insurance companies. Does anyone else?

Here.

 

A perfect example of how government programs get re-directed to the well-connected. From Politico:

San Francisco will get $19-a-person in community development block grants this year, while Allentown, with twice the poverty and less than half of the median income, will draw a per-capita allotment of $17.53….Community development block grants rely on outdated, 1970s formulas that have increasingly shuttled dollars to wealthy places like Newton, Mass., while other locales in need, such as Compton, Calif., go wanting.

As Chris Edwards notes, it gets worse:

The federal aid system generates no net value—it is simply a roundabout way of funding local activities. Taxpayers in San Francisco mail checks to the IRS to fund the CDBG program. Their money flows through the HUD bureaucracy, and then is dished out to bureaucracies in Harrisburg and Allentown, with some trickling down to local residents and businesses. Meanwhile, taxpayers in Allentown are also mailing checks to the IRS to fund the CDBG program. Their money flows through the HUD bureaucracy, and then is dished out to bureaucracies in Sacramento and San Francisco, with some trickling down to local residents and businesses.

The Finale:

“The federal aid system thrives not because it benefits the American people, but because it benefits governments and lobbyists.”

Here.

This is typical of politicians. They think they are doing a favor to workers in a particular industry but by doing so hurts the consumers and customers of that industry. Or they are being cynical just to get their support.

A new agreement between the United States and Mexico will be a sweet one for a small handful of American sugar producers – but it will leave a sour taste in the mouth of U.S. packaged food makers, soda producers, restaurants, confectioners, and ultimately consumers.  . . .

The Trump Administration has opted for limiting imports and driving up prices, apparently casting its lot with a few agribusinesses. The heavily subsidized and protected sugar industry got another boost over the people who buy their product when the U.S.-Mexico deal set a floor price by limiting the amount of sugar that Americans can import from south of the Rio Grande.

Here.

The $85 billion acquisition of CNN parent Time Warner by AT&T could win antitrust approval by the Justice Department in the next 60 days, sources said.

During the presidential campaign, Candidate Trump said he would not allow this merger. I’m pleased to report that common sense prevailed as President Trump needs to focus on effective management of government operations instead of trying to managing economic activities for which the future remains unknown. Draining the swamp IS way more important. Disallowing this merger would fill the swamp more by adding more rules and regulations.

Next Page »