The End of Sound Money and the Triumph of Crony Capitalism

If you really want to get to the heart of crony capitalism. Get deep into why it is so insidious. You need to read this essay (originally a speech at the Mises Institute) from David Stockman. It is superb.

 (From Mises.org)

The triumph of crony capitalism occurred on October 3rd, 2008. The event was the enactment of TARP — the single greatest economic-policy abomination since the 1930s, or perhaps ever.

Like most other quantum leaps in statist intervention, the Wall Street bailout was justified as a last-resort exercise in breaking the rules to save the system. In the immortal words of George W. Bush, our most economically befuddled President since FDR, “I’ve abandoned free market principles in order to save the free market system.”

Based on the panicked advice of Paulson and Bernanke, of course, the president had the misapprehension that without a bailout “this sucker is going down.” Yet 30 months after the fact, evidence that the American economy had been on the edge of a nuclear-style meltdown is nowhere to be found.

In fact, the only real difference with Iraq is that in the campaign against Saddam we found no weapons of mass destruction; by contrast, in the campaign to save the economy we actually used them — or at least their economic equivalent.

Click here for the rest of the speech.

For those who would rather see the speech as presented one can see it below.