Monday, August 29, 2016
What is crony capitalism?
You see, let's look at the 1920s as good example. The 1920 was one of the greatest periods of economic expansion in the history of the United States. It was a time where the rich got richer, the middle class got richer, and the poor got richer. It was a period of time when the unemployment rate was 4%, and most economists consider that no unemployment, because there will always be people in between jobs. So 4% is no employment.
So you had the Roaring 20s. Then the stock market crashed and the Great Depression started. So here is when you had prograssives in America who have a big government agenda, and this was the perfect time for them to convince the world that capitalism was bad. So they came up with this scheme where they would do just that. They claimed that unfettered capitalism during the 1920s is what caused the Great Depression.
They said it was caused because there was no regulation on the free market, and so business owners, republicans, were free to rip anyone off. They claimed all the problems that resulted in the depression were caused by unfettered capitalism. That's how the left defines capitalism, as crony. They see unfettered capitalism as crony capitalism. And that's not true at all.
So they used this new found fear of capitalism to push forth their big government agenda. The first president to play into this fear was FDR.
Today, people think of large companies like Walmart as a perfect example of unfettered capitalism. They see it owned by republicans, supported by republicans, and a perfect example of what is wrong with capitalism. But Walmart is not a perfect example of what is wrong with capitalism, it is a perfect example of what is wrong with crony capitalism.
So, what is crony capitalism? It's when government gets in bed with big business, and for the benefit of both the company and big government. So, Obama, for instance, wants to get Obamacare passed. Okay, it's very unpopular with the people, so without help he never would get it passed.
Walmart is typically a conservative company, and they do not want to sign on to Obamacare. They do not want to support it. But then Obama convinces them to sign on to is. He adds provisions into Obamacare that work to the benefit of Walmart. So, basically, the government is up for sale. Companies like Walmart salivate at opportunities like this. So they buy the government.
So Walmart supports Obamacare. It even pays into it. It does so because it knows it can afford the added regulations. Its competitors cannot afford these regulations, especially small business competitors. So they go out of business and Walmart benefits because it can afford the regulations. It can take the hit. That, my friends, is what crony capitalism is. It's not unfettered capitalism.
Walmart is not unfettered capitalism; Walmart is crony capitalism. It's when government gets in bed with big business, or big business gets in bed with government. You see, Obama benefits because he gets his agenda passed, and Walmart benefits because they get rid of competition. The people who lose in this relationship are citizens, who now have to buy healthcare against their will, have to pay higher taxes to support it, must pay higher prices against their will.
That's crony capitalism. Walmart might be owned by republicans. It might also be owned by democrats. The politicians who get in bed with them could be republicans, but they could also be democrats. You see, there is corruption in both parties. That's exactly why the Trump movement got started.
Crony capitalism is what allows companies like Walmart to prosper. They do not prosper because they have a better product. They do not have more products. They do not offer better quality. They do not have all of the typical stuff that drives customers to them and away from competitors. They become the choice of consumers because their competitors couldn't afford the regulations, and so they closed their doors. So the Walmart's of the world become bigger by default; through capital cronyism.
Here's another way of putting it. In the old days, when company A was in the same business as company B, company A would try to beat company B with a better product and better customer service, lower prices, better retail op, etc. The two companies competed in the marketplace, and company with the best service, or the best prices, or whatever, would lead the marketplace.
Today, thanks to Obama, all company A has to do to beat company B is co-opt the private sector and join forces with Obama. This allows company A to control the market place simply supporting a large government program. This is appealing to a lot of company CEOs. And so now company A does not compete with company B directly. Company A competes with company B by aligning with government, rendering company B helpless.
That is corporate cronyism, or crony capitalism. It's corporate socialism. It's a stepping stone between capitalism and socialism.
General Electric is the same way. Costco is the same way also. Costco supports minimum wage increases. They can afford to pay more. But their competitors can't. There is no business that support a minimum wage increase, unless they are in bed with big government and they get something out of it in return, like fewer competitors. So, Walmart and Costco get in bed with Obama so they can get some breaks.
Crony capitalism is when big business get in bed with big government to get an agenda passed and to knock out competition. That is not what republicans want. It is not what conservatives want. It really is not what democrats want, but they know that in order to get their radical left wing agenda passed, it's what they have to do.
Of course the democrats get something else out of it that we often over look. Their goal is to create a socialistic government, a big government system where experts in Washington control the people and every decision they make, mainly because they know what's best for everyone. So, if they create these crony capitalist deals that drive away small companies. All that's left is large companies. So, when they want to take over industries, like healthcare, it's easier to take over a few large companies than many smaller ones.
I think this is one of the reasons Obamacare made it so easy for hospitals to merge. Sure you had some hospital mergers before Obamcacare. But Obama care made it so difficult for smaller hospitals to stay afloat, mainly due to too many regulations. The larger hospitals supported Obamacare because they knew it would drive away competition, or they could absorb competition. Not because they offered better services or a better product, but because their competitors couldn't afford the regulations.
So, now you have a few large hospital conglomerates. Think of it. The ultimate goal of democrats is to create a universal healthcare system. It's now set up nicely. It will be a lot easier to take over a few large hospitals than many smaller ones. You see, this isn't even corporate capitalism, it's crony socialism. It's socialism. It's a baby step on the way to socialism. It's establishing monopolies, something Teddy Roosevelt worked so hard to break up.
But democrats won't tell you that's the agenda. Democrats won't tell you what crony capitalism really is. They want you to think it's unfettered capitalism. That's how they operate. The greatest enemy of socialism is an educated republic. They don't want you to be educated. That's why they created the department of education and created a public school system where they decide what kids are taught.
That's why they created common core, thus plucking parental choice out of education. They don't want parents decide what kids learn, they want kids to learn only what they want. They want to raise good socialist kids, not founding father loving kids. .
Crony government companies win simply because of their crony relationship with Washington rather than standard business practices: Better product or better service.