In an interesting theme in Carly Fiorina’s campaign—opining on the crony capitalism that is so much a part of our economy and politics—she notes, “What we have now is less and less free market and more and more crony capitalism.”
The Cato Institute’s Michael Tanner explains:
Crony capitalism is an insidious system in which businesses’ success is based on a close relationship with government, and specifically with the people in power who dispense favors, subsidies, bailouts, and other forms of special treatment.
Crony capitalism costs taxpayers roughly $100 billion per year, according to Cato Institute estimates, and consumers hundreds of billions more in higher prices. It slows economic growth and leads to greater inequality.
As Mr. Tanner sees it, with President Obama and Hillary Clinton, there is a “virtually seamless integration of business and government. TARP, green-energy subsidies, the auto-industry bailout, the Export-Import Bank — nearly all the monstrosities of recent cronyism bear a Democratic stamp.” Then, of course, we have Obamacare, jammed packed with special favors for the insurance and pharmaceutical industries, as well as for the administration’s favored unions.
But it’s not just Democrats. Trump basically backed TARP, and he would have extended the bank bailout to Lehman. He also would have the government pick winners and losers with his current call for protectionism and tariffs.
Jeb Bush and Scott Walker both supported taxpayer-financed sports stadiums. Like Trump, Jeb also supported TARP and the bank bailout. Marco Rubio is the sugar daddy to Florida’s sugar industry, voting against reforming the sugar program.
Ted Cruz and Rand Paul are the only Republican candidates who did not back money for agricultural welfare.
Unfortunately it is too easy for politicians to succumb to the temptation of special interests groups at the expense of taxpayers. Carly Fiorina is bringing up a telling point about the link between government and business cronyism that no candidate in either party wants to discuss. Read more from Mr. Tanner here.