As Nick Gillespie at Reason recently said, (we seconded at AC2 News), crony capitalism is probably the toughest nut to crack in libertarian economics.
But the nut can be cracked. The key, as we said, and have long said, is to reduce the state. Having covered crony capitalism day in and day out for nearly 7 years we can attest that THIS is the way forward if one really wants to get to the heart of the matter. The bigger the state, the bigger the cronyism. That’s just the way it is.
Unfortunately crony capitalism to some extent is likely to always be with us. But it can be curtailed. It can be lessened, by a lot.
Reduce the sate. Then separate the state from business. That should be easy. No sweat.
(From The American Spectator)
A few months ago, Secretary of Energy Rick Perry attempted to institute subsidies for power plants that had a 90-day supply of fuel on hand. The justification was that these types of plants would be able to keep America’s energy grid up and running in the event of an emergency, given their on-site fuel supply.
There were a few problems with the plan, put out as a Notice of Proposed Rulemaking (NOPR). First, the only types of power plants that keep fuel on site are nuclear and coal power plants. At the very least, Perry’s proposal would have had the convenient side effect of propping up these two industries. Though some blame regulation for these industries’ lack of competition, the fact is that coal and nuclear power are sometimes unable to compete with other energy sources like natural gas…
…Not only was the NOPR unnecessary, it would have been extremely harmful to energy consumers and taxpayers. Subsidies from the plan would have paid out $10.6 billion, and 90 percent of these subsidies would have gone to just five companies. American energy consumers, including businesses, would have also been forced to pay billions of dollars in increased energy costs.
It is worth noting that further in the article the author cites a coalition of pro-market and environmental groups that came together to fight these subsidies. This is not unlike the coalition that came together in the 60s/70s to defeat the the deeply crony American Supersonic Transport project. There is something to be learned from such coalitions.