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Wednesday, June 20, 2012

Crony-capitalism

A couple years ago I could not have identified crony-capitalism if it hit me in the nose. No longer. This is a huge problem with Washington for the establishment of both parties, and it's only getting worse under Obama. Think about Solyndra and other green bankrupt companies, unionized companies, etc. Our federal deficits (meaning the taxpayer bills) are horrifically large and growing at an accelerated pace.
On Breitbart today, I found Cronyism Alive and Well in Washington.
According to Economic Policies for the 21st Century, the borrowers receive a subsidy of about 1% of the amount borrowed. In other words, Boeing benefitted by approximately $120 million. Was taxpayer largesse of that amount necessary for a company that last year reported $5.34 billion in net income, or were those loans examples of crony capitalism?
A cynic might argue that the outcome of the Senate vote was a foregone conclusion, implying Senator DeMint was able to make political hay by voting against it. But that doesn’t seem to have been the case; he led the opposition and -- keep in mind, Boeing has a major new plant in South Carolina (as does GE). In a speech to 400 Chamber of Commerce members, Mr. DeMint said he voted against the reauthorization because “we’ve created a culture in Washington that has almost every major business in the country with its nose in the trough.” It’s hard to disagree with that statement.
On the other hand, Senator Rubio caved to the sugar lobby, especially to Florida’s Fanjul family, the country’s largest sugar producers. Sugar has enjoyed price supports for years that effectively limit lower priced sugar from other countries. An amendment to the farm bill, sponsored by Senator Jeanne Shaheen (D-NH), and a reform bill proposed by Senator Pat Toomey (R-PA) would have eliminated or reduced price supports for U.S.-grown beet and cane sugar. Shaheen’s amendment failed, and the Senate voted 50 to 46 to table Senator Toomey’s bill. Senator Rubio joined 15 Republicans and 34 Democrats in killing reform.
Sugar is used by virtually everybody, though Mayor Bloomberg is doing what he can to curtail its usage in New York City. By artificially inflating its price, the bill provides support of about $2 billion a year to 5000 sugar farmers, according to a 2000 study by the General Accounting Office. It acts as a regressive tax on the rest of us 306,995,000 Americans.
I recommend the entire article. This bill they're talking about had bipartisan support, and who shut it down? Bipartisan crony capitalists. These sorts of people are the problems in Washington. These are the people responsible for growing government and saddling taxpayers with the expenses. I'm growing quite disenchanted with Senator Marco Rubio. I haven't heard his specific reasons but I can think of not one good reason to continue the subsidy for sugar that has lasted unnecessarily for decades. Same for corn. Same for any other government subsidy.
The free market gives people cheaper, better products because manufacturers compete to provide products that people want to buy. Crony-capitalism preserves industries (that may not need help or may go bankrupt anyway) by forcing taxpayers to pay above market prices. Wisconsin got a break from some of that by Walker's reforms: school districts can now use better, cheaper products and services by not being forced to use union-preferred products and services which were also well above market prices. Instant savings for their state government!
No good. Americans have had enough. Americans are getting more involved and tracking their representatives votes more now than ever before. Only voters can hold politicians accountable, and only voters can force reform in Washington.

*A site called Conservative Voting Records has established a Hall of Shame, telling you how GOP Congressman stack up in voting with conservatives or against them. It's telling, and useful. Check out how your representatives rank on the list, which does take into account the political lean of each district.

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