Jon Corzine: A Lesson in Crony Capitalism

A Photo of Jon Corzine with His Hands in the Air As If He Is Explaining Something

As Governor of New Jersey and a leading “progressive” politician, Corzine decried income inequality and Wall St pay (see the links in the New York Times article below). But when he lost his bid for re-election and returned to Wall St, his actions did not match his words.

He also decided that his new firm, M F Holdings, would become a major financial  speculator, like his old firm Goldman Sachs. Of course Goldman Sachs has an advantage. Since 2008, it has been allowed to borrow newly printed money at zero interest (adjusted for inflation) directly from the Federal Reserve. M F Holdings could get the same money but from a dealer rather than the Fed and at a slightly higher cost. Now the speculations have gone south, the firm is bankrupt, money is reported “missing”, and Corzine doesn’t look good.

But keep this in mind. If the Fed, an agency of the US government, did not print all this money and provide it to Wall St virtually for free, none of this would have happened.

Click here for the story.

Hunter Lewis 11-2-2011

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About Hunter Lewis

A Photo of Hunter Lewis

Hunter Lewis is co-founder of AgainstCronyCapitalism.org. He is co-founder and former CEO of global investment firm Cambridge Associates, LLC and author of 11 books on moral philosophy, psychology, and economics, including the widely acclaimed Are the Rich Necessary? (“Highly provocative and highly pleasurable.”—New York Times). He has contributed to the New York Times, the Times of London, the Washing­ton Post, and the Atlantic Monthly, as well as numerous websites such as Forbes.com, Fox.com, RealClearMarkets.com, and Townhall.com. His most recent books are Economics in Three Lessons & One Hundred Economic LawsCrony Capitalism in America: 2008–2012, and Where Keynes Went Wrong. He has served on boards and committees of fifteen leading not-for-profit organizations, including environmental, teaching, research, and cultural and global development organizations, as well as the World Bank.