{"id":17332,"date":"2012-10-15T11:10:06","date_gmt":"2012-10-15T16:10:06","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=17332"},"modified":"2015-01-01T11:50:09","modified_gmt":"2015-01-01T16:50:09","slug":"crony-capitalism-a-bipartisan-plague","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2012\/10\/15\/crony-capitalism-a-bipartisan-plague\/","title":{"rendered":"Crony capitalism: a bipartisan plague"},"content":{"rendered":"

Veronique de Rugy<\/a> writes about the problem both major US political parties have (and neither really wants to get rid of):<\/p>\n

In his 1986 memoir The Triumph of Politics, former Reagan administration budget director David Stockman wrote: \u201cI had long insisted, to any liberals who would listen, that the supply-side revolution would be different from the corrupted opportunism of the organized business groups; that it would go after weak [corporate welfare] claims like Boeing\u2019s, not just weak clients such as food stamp recipients. Giving the heave-ho to the well-heeled lobbyists of the big corporations who keep the whole scam alive would be dramatic proof that we meant business, not business-as-usual.\u201d <\/p>\n

After four years as the Reagan administration\u2019s fiscal whiz kid, Stockman left, objecting to the president\u2019s inability or unwillingness to make good on his promises to cut government spending. Crony capitalism, having avoided a showdown with a principled adversary, has thrived ever since. <\/p>\n

Cronyism is the practice by which government officials \u2014 Democrats and Republicans, liberals and conservatives \u2014 give preferential treatment to particular firms or industries in exchange for votes, campaign contributions, or the pleasure of promoting pet projects. Favored companies reap financial rewards, reduce their exposure to risk, and gain an advantage over rivals who don\u2019t get the same government help.<\/p>\n

[. . .]<\/p>\n

Corporate double dipping isn\u2019t new. Bipartisan federal, state, and local support for the \u201cweak claims\u201d of corporations has been going on for far more than 30 years, and not just in new and exotic industries such as alternative energy. The target of David Stockman\u2019s ire, aerospace giant Boeing, continues to receive almost unfathomably huge direct and indirect subsidies from the federal government. Ninety percent of the value of the loan guarantees issued by the Export\u2013Import Bank in 2011 went to subsidize Boeing. As a result, Carney reports, Boeing \u201caccounted for 45.6 percent, or $40.7 billion, of Ex-Im\u2019s total exposure in fiscal 2011.\u201d With the help of federal guarantees, the company gained contracts from the likes of Air China and Air India.<\/p>\n

Boeing shows its gratitude to taxpayers by overcharging them at every turn. The nonprofit Project on Government Oversight recently reported that \u201cBoeing charged the U.S. Army $1,678.61 for a plastic roller assembly that could have been purchased for $7.71 internally from the Department of Defense\u2019s own supplies. In another transaction, a thin metal pin worth 4 cents that the Pentagon had on hand, unused by the tens of thousands, ended up costing the Army $71.01 \u2014 a markup of more than 177,000 percent.\u201d The watchdog group\u2019s investigation found that Boeing overcharged the Army nearly $13 million in dozens of transactions, jacking up the price on small, mundane parts and in some cases charging thousands of times more than they were worth. What Stockman called the \u201ccorrupted opportunism of the organized business groups\u201d has become business as usual. <\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Veronique de Rugy writes about the problem both major US political parties have (and neither really wants to get rid of): In his 1986 memoir The Triumph of Politics, former Reagan administration budget director David Stockman wrote: \u201cI had long insisted, to any liberals who would listen, that the supply-side revolution would be different from […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[84,53,13],"tags":[645,727,1010],"class_list":["post-17332","post","type-post","status-publish","format-standard","hentry","category-government","category-politics","category-usa","tag-corporatewelfare","tag-cronycapitalism","tag-ronaldreagan"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-4vy","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/17332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=17332"}],"version-history":[{"count":2,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/17332\/revisions"}],"predecessor-version":[{"id":29463,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/17332\/revisions\/29463"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=17332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=17332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=17332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}