This post was published at The Alex Jones Channel
This post was published at The Alex Jones Channel
Noah Smith, writing in Bloomberg, says that middle class America has indeed been fleeced by our national economic policies. We agree. But which policies have been responsible?
Smith mentions and immediately dismisses trade, immigration, economic regulation, and welfare policies. The real villain in his view is an alleged turn toward managing the economy on free market lines: ‘Your prosperity was taken by the very people who promised to ensure and enhance it. The decades from 1980 through 2008 were the age of neoliberalism — the ideology of the free market.’
This is a story that we hear more and more. Neoliberals, the favorite new epithet on the left for free market exponents, have ruled the roost for decades ( note how the Obama administration is simply ignored in the preceding quote), and have left the poor and middle class far worse off than they were.
The truth is that the Bush-Clinton-Bush-Obama era had much in common, and it was not free market principles. It was an era of unrestrained crony capitalism, in which special interests formed stronger and stronger alliances with government in order to secure economic monopolies and other privileges.
This post was published at Ludwig von Mises Institute on April 8, 2017.
Yesterday the NFL granted Mark Davis his request to move the Raiders from Oakland to Las Vegas. The move creates multiple losers: Las Vegas hotel customers who will see room taxes rise to pay for the $750 million in subsidies for the new stadium, the city of Oakland who still carries debt from the Raiders old venue, and the infamous fans that made up the Raiders’ iconic ‘Black Hole’ who are losing their football team just after witnessing their first playoff performance in almost 15 years.
Beyond the blatant crony capitalism of government-financed stadiums, there are many reasons to doubt the wisdom of the team’s decision. After all, unlike the Rams and Chargers move to Los Angeles, Las Vegas has no history of supporting professional football. The most significant attempt, the Las Vegas Outlaws of the XFL, only averaged 22,619 fans, ranking 5th out of the league’s 8 teams. Other attempts, including multiple Arena League teams and the short lived UFL, were financial flops. Of course, none of these products have the power of the National Football League, so perhaps this time will be different.
At league meetings, a key part to selling relocation was the idea that fans of other teams would travel to Las Vegas to enjoy the city’s attractions along with the game. Of course, if the market had faith in this business model, investment wouldn’t have needed politicians to find investment. It is worth noting that the new Las Vegas NHL team will be playing at a facility backed entirely by private investment. Maxing out at 20,000 seats, it has one-third of the capacity of the Raiders venue – but cost less than a quarter of the projected costs of the Raiders’ future facility.
This post was published at Ludwig von Mises Institute on March 29, 2017.
The Republicans have a problem. Healthcare prices are so swollen by government imposed monopolies that most people cannot possibly afford to pay the crazy bills without subsidies. What to do?
Example: my son recently went to an out-of-state emergency room for food poisoning. The bill came in at over $8,000. And how is this for fairness: our insurance company knocked it down to about $4,000. An uninsured person would have been liable for the full amount. Might even have faced bankruptcy for failure to pay it.
I personally lobbied for a provision in Obamacare preventing hospitals for charging the uninsured more than the insured. Obama said no. Why? Because the idea upset the hospitals. They wanted to be able to continue to exploit the uninsured. Whew. What does that tell us about Obama?
Under these circumstances, average people cannot possibly pay their medical bills unassisted. Yet if you repeal Obamacare by imposing new price controls and subsidies, in other words, pour old, spoiled wine into new bottles, you just perpetuate the problem. So what to do?
Prices can never be reduced by price controls, much less by price controls on government imposed monopoly prices. Most people do not realize that the government, through Medicare, has fixed medical prices for half a century and the results speak for themselves. At the same time, government has fed price increases by protecting monopolies set up by the drug companies and the American Medical Association. This is what government always does, and it wrecks any sector of the economy where this crony capitalist system is applied.
This post was published at Ludwig von Mises Institute on March 10, 2017.
Is it sweet revenge, or just desserts?
Gen. Michael Flynn resigned suddenly from Trump’s cabinet after it came to light that the National Security Advisor had not told the Vice President or President about his conversations with Russia regarding sanctions.
A scandal has since unfolded, and will continue in the media; Gen. Flynn has fallen on his sword. Via the Guardian:
General Michael Flynn has resigned as Donald Trump’s national security adviser after weeks of speculation over his links to Russia turned into days of reporting on the contents of his calls with the Russian ambassador and a day of intense pressure over whether the president could continue to back his pick.
But is there more to the inner-workings and behind stage schemes that led to his demise?
The reaction from one of Hillary Clinton’s closest advisors, and a retweet from the would-be queen herself, suggests that there may have been some Machiavellian intrigue at work.
This post was published at shtfplan on February 14th, 2017.
Neocolonial “capitalist paradise” or crony “socialist paradise”: the net result is the same: expropriation and impoverishment. Yesterday I noted that not all assets will make it through the inevitable financial re-set. ( Which Assets Are Most Likely to Survive the Inevitable “System Re-Set”?) Those that are easy to expropriate will be expropriated, and those assets vulnerable to soaring taxes, inflation and currency devaluation will also be hollowed out. There are two real-time examples of these dynamics we can profitably study: “capitalist” Greece and “socialist” Venezuela. Both nations have impoverished their citizenry to preserve an oligarchy and its cronies. I hope it won’t be too great a shock that crony-capitalism and crony-socialism function in much the same fashion and generate the same result: the wealth of the nation is funneled (or expropriated) into the ruling Elites, impoverishing the non-elites.
This post was published at Charles Hugh Smith on MONDAY, FEBRUARY 06, 2017.
Back in August, we reported of a fascinating case of crony capitalism, whereby Aetna gave the DOJ a not too subtle ultimatum which boiled down to the following: “If the Humana deal is blocked, we exit Obamacare.”
Well, be careful what you wish for, because six months later, and with Obamacare well on its way out, moments ago a US federal judge blocked Aetna’s $37 billion deal to buy rival insurer Humana, thwarting one of two large mergers that would reshape the U. S. health-care landscape. The judge’s ruling, which was filed in Federal court in Washington, said the deal would be “anticompetitive”adding that the deal would have hurt competition among insurers.
This post was published at Zero Hedge on Jan 23, 2017.
While President Trump chose not to attend the elite extravaganza in Davos last week, choosing instead to lambast the great-est and good-est of the world’s executives in their crony capitalist safe space, the cognitively dissonant CEOs reassured each other by saying ‘ignore the tweets’, confident that “if [Trump] knows the facts, he’ll respond according to the facts.” It depends whose ‘facts’ those are, of course.
As Bloomberg so eloquently noted, executives gathered in the Swiss resort for the World Economic Forum this week keep repeating, like a soothing mantra, that Donald Trump is at heart a pragmatist who will avoid trade wars and regulations that make it harder to do business.
Everywhere you looked, and everything you were told confirmed that nothing has changed in the minds of the world’s elite community organizers… (as Bloomberg summarizes)
This post was published at Zero Hedge on Jan 22, 2017.
The Senate began working through President-elect Trump’s cabinet appointments this week, as Washington prepares for next week’s inauguration (which will cost taxpayers over $100 million.) One of the pressing concerns worrying libertarians is Senator Jeff Session’s view on the war on drugs, which has been one of the most successful areas for states’ rights in recent years. Obamacare has also been in the news, as the Republican Congress has begun taking steps to ‘repeal and replace.’ Unfortunately, as Per Bylund notes:
In the present debate on Obamacare, all possible alternatives are simply a move from one interventionist economy to another, and this only distracts us from the real alternative: a radical rolling back of the state.
Of course this approach of less politics, more markets is the approach needed in all facets of America today.
On Mises Weekends this week, Jeff talks about crony capitalism with Nick Sorrentino, proprietor of AgainstCronyCapitalism.org. Jeff and Nick discuss how huge public companies – think defense giants like Lockheed Martin and Boeing – engage in an obvious form of fiscal cronyism, while Wall Street funds and investment banks engage in what we might call monetary cronyism. And they also discuss how average people reap undue benefits in a million small ways, from selling their homes in artificially overheated markets to making money from small businesses made possible only by bubbles. Is that tech startup really “worth” a $50 million payout to the founders? Thanks to the endless distortions of crony capitalism, we may never know.
This post was published at Ludwig von Mises Institute on January 14, 2017.
In my last post, I made light of British columnist George Monbiot’s absurd charge that today’s free market economists and libertarians are part of an establishment crony capitalist system. A “progressive” friend of mine responded by asking: “Doesn’t big business wrap itself in the mantle of free markets? If so, aren’t exponents of free markets supporting crony capitalism? Aren’t they therefore responsible for the crony capitalist practices that beset us today?
The short answer to this question is that free market economists and libertarians are no more responsible for the willful distortion and misuse of their doctrines than Jesus is responsible for the bloody wars of religion of 16th and 17th century Europe. Adam Smith pointed out two-hundred-and-fifty years ago that business owners, especially big business owners, are not generally supporters of free markets, whatever they may claim. They find its disciplines too onerous; they try to escape them through one means or another, and subverting government through crony capitalist techniques is the tried and true way to do it.
Nor is it correct to think that crony capitalism is a particular phenomenon of our own day. Yes, it has grown by leaps and bounds in recent decades, thanks to ample financing provided by world central banks. But it has always been with us.
As I pointed out to my friend, crony capitalism is as old as the human race. It is the economic system embedded in tribalism and as such has been the dominant system for all of human history. Through the ages, powerful cronies latch onto political and economic philosophies and distort them in the process, but this is just window dressing.
This post was published at Ludwig von Mises Institute on Jan 14, 2016.
Blind to Crony Socialism
Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous. The liberal press usually misrepresents this as a hypocritical ‘jobs for the boys’ program within the capitalist class. In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid. Believe me. I’ve been on both sides of this kind of dispute (except, of course, for the ‘failed’ bit).
People are usually struck by the seeming injustice of CEOs running companies into the ground and then getting paid obscene amounts in the form of ‘golden parachute’ type good-bye presents. Often there is no other way to get rid of a bad CEO though – if his or her employment contract guarantees a large termination benefit, the company may have little choice in the matter. As a rule, private shareholders are bearing the cost of such transactions, and they are in this position voluntarily (after all, they could sell their shares or vote against generous CEO payment packages at shareholder meetings). We realize of course that in the age of crony socialism, one usually has to judge such things carefully on a case by case basis. Still, it is a far cry from the misuse of taxpayer funds, which are appropriated by coercion and offer those bearing the costs no opportunity to ‘opt out’.
So where’s the liberal outrage with a story like the pension swindle in El Monte, California? This is about a dying town, with a per capita income of $10,316 and a quarter of its population below the poverty line, that is paying a pension to one of its retired (at the age of 58) city managers of more than $250,000 per year. Adjusted for inflation. With medical for him and his wife. And survivorship benefits. And to which he contributed nothing.
Or another retired city manager who collects $216,000 per year, allowing him to ‘take some things off his bucket list’ such as golfing at the Old Course at St Andrews. And it looks like the public is paying for more than just green fees. His retirement came shortly after he was swept up in an anti-prostitution sting operation.
This post was published at Acting-Man on January 12, 2017.
In a time of great change; upheaval of norms and establishment status quo dissolution, there is one steadfast member of the elite that the world can rely on to never change – no matter how the facts around him do. Nobel-prize-winner Paul Krugman has begun the year as he ended the last, with a New York Times’ op-ed exclaiming that “America has become a ‘Stan’.”
In 2015 the city of Ashgabat, the capital of Turkmenistan, was graced with a new public monument: a giant gold-plated sculpture portraying the country’s president on horseback. This may strike you as a bit excessive. But cults of personality are actually the norm in the ‘stans,’ the Central Asian countries that emerged after the fall of the Soviet Union, all of which are ruled by strongmen who surround themselves with tiny cliques of wealthy crony capitalists.
Americans used to find the antics of these regimes, with their tinpot dictators, funny. But who’s laughing now?
We are, after all, about to hand over power to a man who has spent his whole adult life trying to build a cult of personality around himself; remember, his ‘charitable’ foundation spent a lot of money buying a six-foot portrait of its founder. Meanwhile, one look at his Twitter account is enough to show that victory has done nothing to slake his thirst for ego gratification. So we can expect lots of self-aggrandizement once he’s in office. I don’t think it will go as far as gold-plated statues, but really, who knows?
This post was published at Zero Hedge on Jan 2, 2017.
Say what you want about the Obama economy, but one aspect of it must be stated up front: It was the ‘Happy Time’ of crony capitalism. I know this statement departs from the glowing narrative being promoted by mainstream sources, but facts are facts. Maybe Obama’s was left-cronyism, whereas Bush pushed a right one, but no matter. Crony capitalism has done well since 2009.
It’s not hard to understand why. When an era’s political milieu is defined by Dodd-Frank, the Affordable Care Act, feeding the national security monster, climate-change-inspired central planning, Elizabeth Warren, and Bernie Sanders, then you are going to increase costs of doing business. Large, well-connected firms will benefit, as a result if only because large, well-connected firms can afford to comply. Everyone else will go out of business, become an entrepreneur, do consulting, join the gig economy, or whatever else is necessary to just get by.
Such is the conclusion of regulatory capture, and it’s no surprise. The sainted Franklin Roosevelt embarked on a similar round of unprecedented regulation during the so-called First New Deal. The large corporations of his day did very well – from 1933 to 1937 – and worked hard for his reelection. If you worked for one of these lucky organizations, you wouldn’t even know there was a Depression going on. FDR’S economy was one in which real incomes rose – a glorious thing to anyone earning an income in those days.
This post was published at Ludwig von Mises Institute on December 26, 2016.
Following Newt Gingrich’s comments yesterday that Donald Trump no longer wants to drain the swamp, it appears the president-elect is not best pleased with this narrative…
Someone incorrectly stated that the phrase "DRAIN THE SWAMP" was no longer being used by me. Actually, we will always be trying to DTS.
— Donald J. Trump (@realDonaldTrump) December 22, 2016
Of course, the hiring of various Wall Street bankers and crony capitalists may have a few people still questioning Trump’s plans.
It seems Mr. Gingrich got a ‘tap on the shoulder’, and has just explained how wrong he was…
“I want to report that I made a big boo-boo. I talked this morning with President-elect Donald Trump and he reminded me, he likes draining the swamp,” Gingrich said in a video he posted on Twitter, I mischaracterized it the other day. He intends to drain the swamp.”
This post was published at Zero Hedge on Dec 22, 2016.
BALTIMORE – Who’s the biggest winner so far? ‘Government Sachs!’ Fortune magazine reports that the winningest person since Trump’s election is Goldman Sachs CEO Lloyd Blankfein. Goldman’s stock price is back to where it was just before the last crash in 2008. And Blankfein is back in high cotton, too; his holdings in the firm have gained $140 million in the last four weeks.
Donald Trump pledged to take the elite down a notch. So far, they’re going in the opposite direction. Worldwide, they’re up about $4.4 trillion, as their stocks have soared in the ‘Trump Bump.’
Many of America’s best investors – including Carl Icahn and Ray Dalio – think this is just the beginning. And with some of the nation’s most successful moneymen at his side, including a former Goldman guy in the Treasury, many people are betting that Trump will bring a sustained boom.
We’ve been looking at crony capitalism. Our hypothesis is that it is funded by the feds’ fake money and enabled by their regulations. So far, we’ve looked at ex-Goldman banker Steven Mnuchin, Trump’s pick for secretary of the Treasury.
While he was making a fortune at Goldman, a major Main Street company, Sears was turned into a Wall Street victim. Its stock is down quite a bit. And it is expected to declare bankruptcy in a few months. Wilbur Ross, Trump’s new man for the Department of Commerce, used federal regulation of imports to make a billion dollars in the steel industry.
This post was published at Acting-Man on December 22, 2016.
225 years ago today, the first ten amendments were added to the new Constitution of 1787. Those amendments have come to be known as the Bill of Rights, and taken as a whole, these amendments represent what can only be described as one of the few parts of the Constitution worth applauding today.
While most of the Constitution is concerned with centralizing government power, raising tax revenue, protecting the institution of chattel slavery, and hammering the independent states into a consolidated political union, the Bill of Rights, on the other hand, was concerned with limiting government power:
Bizarrely revered by many as a “pro-freedom” document, the document now generally called “the Constitution” was originally devoted almost entirely toward creating a new, bigger, more coercive, more expensive version of the United States. The United States, of course, had already existed since 1777 under a functioning constitution that had allowed the United States to enter into numerous international alliances and win a war against the most powerful empire on earth.
That wasn’t good enough for the oligarchs of the day, the crony capitalists with names like Washington, Madison, and, Hamilton. Hamilton and friends had long plotted for a more powerful United States government to allow the mega-rich of the time, like George Washington and James Madison, to more easily develop their lands and investments with the help of government infrastructure. Hamilton wanted to create a clone of the British empire to allow him to indulge his grandiose dreams of financial imperialism.
This post was published at Ludwig von Mises Institute on December 16, 2016.
I’m afraid the Trump train is headed for a sharp economic curve that takes the US further away from free-market capitalism. The US already pulled out of the free-market station a long time ago, but Trumponomics moves deeply into a ‘mixed economy,’ an economy in which government funding and private funding are married. The bankster-baron confederation in the Trump cabinet is where business and government consumate their marriage.
My pervious article about Trump’s cabinet lineup demonstrated a major economic shift forming in the presidential cabinet. This article explains what that shift means.
How Trumponomics may radically change the US economy
In Trumponomics, this is worked out by placing corporate giants in direct control over all the reins of government in order to make sure that government is compliant to corporate interests as an effective way of boosting the economy. Trump has stated that most of his infrastructure spending will come from private enterprise, and this confederation assures government funding and business funding align.
While this union empowers rapid economic growth, the downside to Trumponomics is that a mixed economy easily sidetracks from its stimulus intentions to becoming the ultimate form of crony capitalism because government and industry become such intimate partners in development that you cannot tell where one begins and the other really ends. That entices a flow of money from public to private interests. The state risks becoming the weaker partner in this arrangement – a mere servant of corporate needs and wants – because those running the state have their former institutions, lifelong friends and their pocket books at heart.
This post was published at GoldSeek on Thursday, 15 December 2016.
BALTIMORE – When we left you last time, we were in the middle of describing the crooked hind leg of crony capitalism. We used billionaire businessman Wilbur Ross – Donald Trump’s pick for the Department of Commerce – for illustration purposes. Not that there is anything wrong with Mr. Ross. He plays the game, just as everyone else does. He’s particularly good at it.
This post was published at Acting-Man on December 15, 2016.