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Archives for Crony Capitalism (page 1 / 1)

Group Backing Ted Cruz Accuses Marco Rubio of ‘Cronyism’

Group Backing Ted Cruz Accuses Marco Rubio of ‘Cronyism’ →

Seeking to drive Senator Marco Rubio from the presidential race, a “super PAC” supporting Senator Ted Cruz is spending heavily against Mr. Rubio in Florida, his home state. The five new ads that the group, Keep the Promise I, have released attack Mr. Rubio’s attendance record in the Senate, his stand on immigration, his tax plan and his relationship with Florida’s sugar producers.

Fact Check

Mr. Rubio supports the federal sugar program, defending it as necessary to protect domestic sugar producers from comparable government subsidies in competing countries. “Otherwise, Brazil will wipe out our agriculture, and it’s not just sugar,” he said recently. Mr. Rubio has also received campaign contributions from sugar producers, most notably Jose Fanjul, who along with his brother owns Domino and other sugar companies.

​This is one of my two biggest reasons for disliking Marco Rubio. It may be true that he can't get elected in Florida without the support of the sugar producers. But if he'll compromise his supposed conservative principles on corporate subsidies for political gain, what else might he compromise for political gain.

Government Money

Government Money →

From Daniel Greenfield, at Sultan Knish:

Do you know of any company in America where for a mere few billion, you could become the CEO of a company whose shareholders would be forced to sit back and watch for four years while you run up trillion dollar deficits and parcel out billions to your friends? Without going to jail or being marched out in handcuffs. A company that will allow you to indulge yourself, travel anywhere at company expense, live the good life, and only work when you feel like it. That will legally indemnify you against all shareholder lawsuits, while allowing you to dispose not only of their investments, but of their personal property in any way you see fit.

There is only one such company. It's called the United States Government.

This is gangster government at its best. Politicans can spend billions of dollars to gain control of trillions of dollars. Then they can enrich themselves, their friends, and their friends' friends. And we wonder why our representatives are corrupt? They wouldn't have so many opportunities for corruption if we drastically cut federal spending and took away their goody bags.

Is Income Inequality Unfair?

Is Income Inequality Unfair? →

From Scott Rasmussen, at Real Clear Politics:

For most Americans, the context is very important. If a CEO gets a huge paycheck after his company received a government bailout, that’s a problem. People who get rich through corporate welfare schemes are seen as suspect. On the other hand, 86 percent believe it’s fair for people who create very successful companies to get very rich.

In other words, it’s not just the income; it’s whether the reward matched the effort. People don’t think it’s a problem that Steve Jobs got rich. After all, he created Apple Computer and the iPad generation. But there was massive outrage about the bonuses paid to AIG executives after that company was propped up by the federal government.

Income inequality isn't unjust unless the income was ill gotten gains. Our goal as a society shouldn't be to stamp out income inequality. It should be to stamp out crony capitalism that allows people to get rich through connections instead of requiring them to get rich through innovation that makes the rest of us richer.

Obama’s Auto Bailout Was Really a Hefty Union Payoff

Obama’s Auto Bailout Was Really a Hefty Union Payoff →

GM did go bankrupt – filing for Chapter 11 protection against its creditors on June 1, 2009. It’s what happened next that the president can take credit for – a handout of $49.5 billion in taxpayer money to GM, some $27 billion of which remains outstanding, and another $17 billion to its financial arm Ally Financial, which still owes $14.7 billion.

Where did that money go? Mainly, it went to paying off debts owed by GM and Chrysler, and – in an historic distortion of our bankruptcy proceedings – to securing the pensions and livelihoods of UAW workers. It turns out the real debt was that of Mr. Obama to organized labor, which had ponied up some $400 million to help him defeat John McCain.

The Obama administration strong-armed the auto companies’ creditors into accepting undeniably unfair terms – terms that saw pensions obliterated for non-union workers but saved for those carrying a UAW card. Terms that saw non-UAW shops close but UAW factories stay open. Terms that doled out ownership in GM with political favoritism as a guiding principle.

These charges are not at issue. In the government-managed reorganization of GM, bond holders (secured bond holders, who normally are at the top of the pay-out chart) were given equity in the carmaker at a price of $2.7 billion per one percent ownership. The government ended up paying $834 million for every one percent it claimed; the UAW paid only $629 million.

It was not only the ownership share that was skewed towards the UAW. As jobs began to come back, it was the UAW plants that kicked into high gear. Workers at GM’s plant in Moraine, Ohio, who had been laid off in 2007, were not included in the re-hiring. Why? Because they did not belong to the UAW. The Moraine plant was reportedly one of GM’s most productive, but under the terms of GM’s reorganization, its workers were “banned from transferring to other plants,” according to Sharon Terlep at The Wall Street Journal.

Moraine was not the only non-UAW facility to fall under the knife; a truck plant in Ontario organized by the Canadian Auto Workers also went down.

How to Legally Hurt the Competition

Mattel, Hasbro, and Lego have figured out how to use the government to hurt their competitors. They'll ask for more government regulation.

Acknowledging a growing crisis of public confidence caused by a series of recent recalls, the nation's largest toy makers have taken the unusual step of asking the federal government to impose mandatory safety-testing standards for all toys sold in the United States.

The toy manufacturers, of course, claim that they're only doing this in the interests of public safety and in reassuring the public before the Christmas shopping season. Of course, they're might be another reason.

Instead, companies would be required to hire independent laboratories to check a certain portion of their toys, whether made in the United States or overseas. Leading toy companies already do such testing, but industry officials acknowledge that it has not been enough.

... Small companies that currently do little or no testing would be required to pay for testing as well.

So, the large companies already do testing. Recent events have proven that testing isn't always enough to catch dangerous toys. No matter. They'll use the cover of recent events to force their smaller competitors to pay for testing as well. This won't necessarily do anything to improve the safety of toys, but it will do a lot to raise the manufacturing costs (and retail prices) of toys from their competitors.

How clever.

You know, if Mattel, Hasbro, and Lego believe in stronger testing, they could start doing it all by themselves, without the force of the federal government behind them. They could then run an intensive ad campaign talking about their new testing system and what they're doing to make their toys safe for children. This would accomplish their stated goals, they wouldn't have to wait for the government to act, and they could probably increase sales as well.

But it wouldn't hurt their smaller competitors like government regulation would. So, they won't do it. Government regulation -- it's just another way to say "legal mugging".