Crony Capitalists and Special Interests Dragging Down U.S. Economic Growth

Got to get the OK from lots of people to do anything these days.
Got to get the OK from lots of people to do anything these days.

This is a point we’ve long made. Crony capitalists will siphon as much of the general wealth of the nation as they possibly can and will do so as long as that wealth is made available to them. Government aggregates this wealth and serves it up on a tray to special interests.

People who believe that a larger (seriously larger?) government will somehow increase “justice” by virtue of increased programs etc. likely do not understand that that these programs will benefit cronies – of various kinds, government employees, government agencies, government contractors – first. Then, possibly, some scraps will be thrown to the people for whom these programs were supposedly created.  A classic example is the Food Stamp program. Yes, it does help put food in people’s stomachs but it also subsidizes food created by large corporations. How do you think Walmart would react if food stamps were just taken away? (Not that we are advocating just cutting people off of food aid.) They wouldn’t be very happy about it. Again, just an example. There are many others.

When government becomes redistributist, either in the classic ham handed socialist sense, or in the more subtle but probably equally as destructive over the long term crony capitalist sense, the economy is hurt. The economy isn’t creating. It is shuffling. That isn’t healthy and leads to economic stagnation.

(From Reason)

Unemployment is now at 5.1 percent, yet American wages and incomes are stagnant. Why is this happening? In an insightful column in today’s Washington Post, Robert Samuelson suggests an explanation based on the work of economist Mancur Olson, As I have explained earlier public choice theorist, Mancur Olson, argued in The Rise and Decline of Nations(1982) that economic stagnation and even decline set in when powerful special-interest lobbies—crony capitalists if you will—capture a country’s regulatory system and use it to block competitors, making the economy ever less efficient. The growing burden of regulation could some day even turn economic growth negative.

Click here for the article.

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