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Chris
07-11-2012, 08:56 PM
There are many forms of cronyism, many ways politicians sell favors for power.


Go to Beyond Bailouts: What Is Cronyism? (http://mercatus.org/publication/beyond-bailouts-what-cronyism) to check out the interactive iceberg:

http://i.snag.gy/54b4R.jpg


Go to The Pathology of Priviledge (http://mercatus.org/publication/pathology-privilege-economic-consequences-government-favoritism) to read more:


Despite the ideological miles that separate them, activists in the Tea Party and Occupy Wall Street movements agree on one thing: both condemn the recent bailouts of wealthy and well-connected banks. To the Tea Partiers, these bailouts were an unwarranted federal intrusion into the free market; to the Occupiers, they were a taxpayer-financed gift to the wealthy executives whose malfeasance brought on the financial crisis.[1] To both, the bailouts smacked of cronyism.

The financial bailouts of 2008 were but one example in a long list of privileges that governments occasionally bestow upon particular firms or particular industries. At various times and places, these privileges have included (among other things) monopoly status, favorable regulations, subsidies, bailouts, loan guarantees, targeted tax breaks, protection from foreign competition, and noncompetitive contracts. Whatever its guise, government-granted privilege is an extraordinarily destructive force. It misdirects resources, impedes genuine economic progress, breeds corruption, and undermines the legitimacy of both the government and the private sector....

Peter1469
07-11-2012, 09:04 PM
Can't regulations be enacted without favor?

Chris
07-11-2012, 09:45 PM
Regulations that do what government was intended for, protecting rights to life, liberty and pursuit of happiness.

I think the point of the article, or maybe I saw it elsewhere, was that regulation helps big business and harms small business. Big business can afford the legal staff to work with and around regulations small business cannot. And it's just an investment if it puts small business out of business.

Here it is, point #2 in the following video, about at the 1:35 point, "How Cronyism is Hurting the Economy":


http://www.youtube.com/watch?v=gSgUENZ9O94

Peter1469
07-11-2012, 10:11 PM
Regulations that do what government was intended for, protecting rights to life, liberty and pursuit of happiness.

I think the point of the article, or maybe I saw it elsewhere, was that regulation helps big business and harms small business. Big business can afford the legal staff to work with and around regulations small business cannot. And it's just an investment if it puts small business out of business.

Here it is, point #2 in the following video, about at the 1:35 point, "How Cronyism is Hurting the Economy":


http://www.youtube.com/watch?v=gSgUENZ9O94

I have long advocated for separate regulations for "big" business and for "small" business. Small businesses are self-controlled via the Invisible Hand Theory. Big businesses are not.

Chris
07-11-2012, 10:44 PM
Big business is not in many cases because a corrupt government makes itself available for them to pursue political means instead economic means in the market place.

Let's regulate government.

Peter1469
07-12-2012, 05:03 AM
Transparency regulates government so long as the voters pay attention.

Chris
07-12-2012, 10:37 AM
Transparency regulates government so long as the voters pay attention.

Transparency? Isn't that what Obama promised.

Peter1469
07-12-2012, 11:26 AM
Transparency? Isn't that what Obama promised.

Obama lied.

Chris
07-13-2012, 05:00 PM
More...


Last week's announcement that European aircraft maker Airbus will receive subsides to build a new plant in Mobile, Alabama is yet another reminder that America's economy is being shackled by cronyism.

The problem of crony capitalism comes in a wide variety of policies that benefit specific individuals, firms and industries at the expense of everyone else. From occupational licensing laws to corporate tax breaks, and from federal flood insurance to ethanol mandates, capital is being misallocated due to state and federal policies. As a result, innovation, economic growth and employment are being undermined....

...If no subsidies were available, Boeing and Airbus would compete on a level playing field with smaller competitors, such as Bombardier, Embraer and Gulfstream. The various manufacturers would each seek to meet the perceived wants of customers and would be incentivized to innovate newer, better aircraft with lower total cost of ownership. Production location decisions would be based on cost effectiveness evaluations.

Knowledge about which product to buy, where and when is dispersed among the entire population. The late Nobel laureate economist Friedrich Hayek observed in a famous 1945 article, The Use of Knowledge in Society, that the prices resulting from such transactions provide important signals to market participants, enabling them to make decisions about what to produce, where and when. Subsidies effectively distort those market prices and bias investment decisions....

...Of course we can't know what innovations have not occurred. Subsidies are thus a classic example of what French philosopher Frédéric Bastiat referred to in his essay, "What Is Seen and What Is Not Seen." What we see is the company that continues to produce goods, often inefficiently, in the wrong place and at the wrong time (both Boeing's 787 and the Airbus A380 experienced lengthy delays). What we do not see are the foregone innovations; they are absent and hence invisible....

Read more at The Economics of America's Crony Society (http://www.realclearmarkets.com/articles/2012/07/12/the_economics_of_americas_crony_society_99760.html )

Peter1469
07-13-2012, 05:41 PM
The US could end its subsidies of Boeing. The US cannot end EU subsidies of Airbus.