A key point must be made. The riches the crony class enjoy, to a very large degree are a result of crony capitalism, cronyism, state capitalism, public/private partnerships, and governments that are large and powerful. They don’t enjoy the riches they do, to a very large degree, because of competitive free market/price capitalism. It is because free market/price capitalism is so exceedingly rare that many of the people in the crony club have been able to consolidate their positions and to increase their power.
Kings don’t like free market capitalism. It creates competition. That’s why, in our opinion, if one is really for justice one must oppose the state in a broad sense and the embedded privileges that allow the cronies to remain in their positions.
Central bank actions to fight the financial crisis—record low interest rates and bond-buying programs—have underpinned this ballooning wealth by driving up the prices of stocks and other assets.
“Ten years ago, ironically at the lows of the market, what you wanted to own was capital and if you did own capital you did incredibly well,” said Michael Hartnett, Bank of America Corp.’s chief investment strategist.
We have made this point for almost a decade. If one had assets, and one wasn’t forced to liquidate one’s assets (and we are talking right on down to the everyday homeowner) one did quite well post 2008 Crash. Those who had assets were bailed out in various ways.
If, however, one had few assets, no assets, or one had to sell one’s assets in an economic fire sale, life post Crash is a different story.
Indeed the injustice of this situation is what inspired the founding of AgainstCronyCapitalism.org by your editor and Hunter Lewis in 2011. The injustices of our crony economic system continue and have been compounded by government and central bank policy.