We define crony capitalism as special deals and arrangements between the government and special interests of all kinds, including businesses, but also labor unions and trial lawyers and many others.
We don’t regard the unemployed as a special interest group. They are just Americans, period. The problem with this latest proposal from President Obama is not that it is crony capitalist but that it lacks common sense. It will just make employers even more wary of the unemployed. It will lead to even higher unemployment.
It is, however, related to crony capitalism in one respect. Crony capitalism drives the government not only to intervene in the market economy, but to do it in ways that defy even the most basic economic common sense. The motive is to garner electoral support, whether in the form of money or votes, for the next election. This latest move by President Obama clearly is another attempt to buy votes without any concern for the economic damage it is doing, even in this case to the intended recipients of the favor.
In a world free of crony capitalism, the President would make decisions on behalf of all Americans, intended to help all Americans, not engage in economically counter-productive attempts to buy votes.
Hunter Lewis 9-28-2011