September 10, 2012

"It shouldn't surprise us that the role of American business is increasingly vilified or viewed with skepticism."

Writes the much-vilified businessman Charles Koch (in a WSJ op-ed):
Far too many businesses have been all too eager to lobby for maintaining and increasing subsidies and mandates paid by taxpayers and consumers. This growing partnership between business and government is a destructive force, undermining not just our economy and our political system, but the very foundations of our culture....

To end cronyism we must end government's ability to dole out favors and rig the market. Far too many well-connected businesses are feeding at the federal trough. By addressing corporate welfare as well as other forms of welfare, we would add a whole new level of understanding to the notion of entitlement reform.

74 comments:

damikesc said...

But without the goodies to dole out, how would Congresspeople become fabulously wealthy from "public service"?

He's 100% correct --- but the people don't want it.

wyo sis said...

Oddly enough, even though both parties do this, the left has somehow made people think this is an evil conservative thing.

Matthew Sablan said...

Any time people complain to me about rigging the market and playing by the rules, I ask them: "So, why are we proud about bailing out Detroit?"

Rigging the system seems perfectly acceptable to some people, so long as they are the ones rigging and benefiting from the rigging.

Tank said...

100% correct.

But evil.

Koch said it so, even thought correct, must be evil.

And Koch is right that the only way to stop it is to take away gov't ability to do this kind of thing. That will never happen.

Doomed.

Bob Ellison said...

For people actually in business, cronyism and government-granted advantages are just part of the competitive landscape. The Koch brothers can afford to fight these things, and I applaud them for doing so, but for most, it's just the way it is.

The Solyndra debacle has been undersold. My taxes and yours were taken to give to an Obama crony to fund something I would never have funded which was intended, stupidly, to compete with realistic energy producers by putting American manufacturers at an advantage against Chinese manufacturers, who didn't even bother to bring suit, which they probably could have, because they just laughed while they put Solyndra out of business, since Solyndra was an obviously mismanaged brothel.

OK, I feel better now.

Bruce Hayden said...

Oddly enough, even though both parties do this, the left has somehow made people think this is an evil conservative thing.

And, the funny thing there is that crony capitalism is well accepted on the left, as they routinely reelect the politicians who most egregiously participate in this.

MadisonMan said...

As they say, follow the money.

Saint Croix said...

He's 100% correct --- but the people don't want it.

Yeah we do!

Koch is right. And he's brilliant to align himself with the Tea Party.

Bruce Hayden said...

Any time people complain to me about rigging the market and playing by the rules, I ask them: "So, why are we proud about bailing out Detroit?"

Who is proud of bailing out the UAW there? Somewhere around $40 billion to prop up their pension plans and the like. The politicians who are proud of it give away their own inherent greed and corruption.

Shouting Thomas said...

The best way to sell the voters on these crony capitalist boondoggles, like Solyndra, is to convince them that they are "doing good."

The mortgage/derivative scam was sold as the do-gooder corrective to the imagined "red-lining" campaign of discrimination by lenders against banks.

You can see on this board, from reading the comments of Obama supporters, that this strategy is very effective.

How can you be a mean bastard and oppose cheap mortgages with no qualifications for black people? What could possibly go wrong if the Fed forces lenders to extend loans to everybody who walks in the door?

Bruce Hayden said...

The Democrats’ GM Fiction:

The Democrats have decided to run in 2012 as the bailout party. It is an odd choice — the 2008–09 bailouts were deeply unpopular among the general public, and even their backers were notably conflicted about the precedent being set and the ensuing moral hazard. But Democrats have nonetheless made one of the most abusive episodes in the entire bailout era their economic cornerstone: the government takeover of General Motors.

The GM bailout was always an odd duck: The Troubled Asset Relief Program (TARP) was created in order to preserve liquidity in the financial markets by heading off the collapse of key financial institutions that had made catastrophically bad bets on real-estate securities — nothing at all to do with cars, really. GM’s financial arm, today known as Ally Financial, was in trouble, but GM’s fundamental problem was that its products were not profitable enough to support its work-force expenses. A single dominant factor — the United Auto Workers union’s extortionate contracts with GM — prevented the carmaker from either reducing its work-force costs or making its products more efficiently. And its hidebound management didn’t help...

Sloanasaurus said...

This is all true of course. But, the overall problem we have under Obama, is that he doesn't understand business generally. Obama apparently seems to care. He provides record levels of food stamps, people on medicaid, welfare, and all kinds of government give-a-ways.

But, Obama does nothing for job creation. You cant just provide people safety nets, if there are no jobs. What we need is for job creaters and business people to feel confident about the future. Obama does nothing for confidence but erode it. If Obama gets re-elected, the dismal confidence will only continue and jobs will continue to be lost.

Shouting Thomas said...

Koch doesn't say how we "end government's ability to dole out favors and rig the market."

I certainly can't think of a way to do that.

The underlying driving force is the voters' desire to be insured against all risk.

This shit isn't happening out of the blue. Voters keep falling for politicians who tell them that they won't ever have to lose their job, that energy can be produced with no risk to the environment, etc.

The voters are themselves to blame. I predict that, as the day wears on, you'll see numerous comments about how everybody could get everything they want for free if only Republicans weren't treacherous, greedy bastards.

Jay said...

Of course it is villified & viewed with skepticism as that is what is taught in college and at places like Harvard Law.

See, Romney engaged in "vulture capitalism" and if you don't know that you're like a super-duper big dummy!

And the people who say such things work in the "good" jobs like state government and in the diversity office.

Lyle said...

Yes, close tax loopholes. Easier said than done though.

prairie wind said...

The best way to sell the voters on these crony capitalist boondoggles, like Solyndra, is to convince them that they are "doing good."

The mortgage/derivative scam was sold as the do-gooder corrective to the imagined "red-lining" campaign of discrimination by lenders against banks.


Yes. Solyndra and other "green energy" companies were favored because that was supposed to be a stick in the eye of evil Big Oil.

The Tea Party is our only hope. Romney/Ryan will be better than Obama but they will almost certainly not be much better for the country as a whole.

Romney says he likes the part of Obamacare (though he calls it "healthcare reform") that ensures coverage for pre-existing conditions and coverage for children on their parents' policy up to whatever age.

The Tea Party rejects those "reforms" because they do nothing to reform healthcare...and because the Tea Party wants to reduce government to only the roles identified in the Constitution.

Original Mike said...

Sing it, Brother Koch!

Bruce Hayden said...

But, Obama does nothing for job creation. You cant just provide people safety nets, if there are no jobs. What we need is for job creaters and business people to feel confident about the future. Obama does nothing for confidence but erode it. If Obama gets re-elected, the dismal confidence will only continue and jobs will continue to be lost.

Sure he does. According to Dems, he has created over four million jobs - which is a hard sell, since there are some 200k fewer people working today than when he assumed office (not even taking into account population growth). Heck, the Dems claim that shoveling some $40-50 billion to the UAW saved some 1.5 million jobs.

Shouting Thomas said...

OK!

I'll repeat. Koch doesn't say how we stop crony capitalism.

And, I said, the problem arises from the voters' demand to be insured against all risks.

Any ideas of how to counter this? I admit, I ain't got any.

Shouting Thomas said...

And, there is an underlying complaint on the part of voters that has some substance.

Those "capitalists" at the top of the food chain are successfully rigging the game so that they are insured from all risk.

And, I don't just mean crony capitalism. I worked for a wealthy corporate law firm long enough to see how CEOs and executives get those huge compensation packages.

They all sit on one another's board of directors, and vote on one another's salaries.

Bob Ellison said...

Shouting Thomas, simplification is the answer. De-regulation, simplification of the tax code, elimination (dare I say it?) of C-corp taxes, and like measures will tend to make cronyism difficult. Eliminating cronyism is impossible; we must seek only to control it with natural forces, much as the founders of America sought to control factionalism.

Jim said...

If you look at the ending credits of the American Experience biography of Frank Llloyd Wright that aired in the early 2000's, you will see that it is sponsored by THE KOCH'S.

I believe that this is all part of a deviously clever, long term, master plan to force us into Usonian or Prairie Style homes.

Bruce Hayden said...

Yes, close tax loopholes. Easier said than done though.

What is a tax loophole? A lot of libs are claiming that Romney's 13% or so charity deduction (presumably including tithing to the LDS Church) shouldn't be deductible. He should be more like Slo Joe Biden, who typically gives a couple of hundred dollars to charity.

Sure, some of the "tax loopholes" are really loopholes, but for corporations, they are mostly ways to reflect the business reality that money must be spent to make money. Plants need to be built, and computers purchased. This is taught in Accounting 101, which most politicians seem to have skipped. Sure, there are places where politicians have made some preferred behavior profitable for businesses through the tax system (such as buying electric vehicles to reduce CO2 - despite such not really reducing it, and the science behind AGW being increasingly discredited), but these are a minority of the real "tax loopholes" that they want to close. Most, such as depreciation, depletion, etc. reflect that reality of spending money to make money, and if the money is not invested (as in really invested, and not squandered, as Dems seem to think that word means), there will be no additional income, no growth, no new jobs, and lower taxes.

Jay said...

Oh gee, why would people view the private sector with skepticism?


Later, when he wrote those few paragraphs about B.I. in his memoir, he repeated that idea: Like a spy behind enemy lines, I arrived every day at my mid-Manhattan office and sat at my computer terminal, checking the Reuters machine that blinked bright emerald messages from across the globe.’” (David Maraniss, Barack Obama: The Story, 2012, pp. 487-488)


And,


Obama wrote a letter to his former girlfriend, Alex McNear, during that period, the last he would write to her. As in his telephone conversation with his mother, he expressed a distaste for the corporate world. He wrote Alex on Business International stationery, but crossed out the logo on the envelope and scribbled in his own address on West 114th Street.” (David Maraniss, Barack Obama: The Story, 2012, p. 488)


Remember what Michelle Obama had to say about the private sector?

EMD said...

I believe that this is all part of a deviously clever, long term, master plan to force us into Usonian or Prairie Style homes.

I could vote for that!

EMD said...

Corporate welfare is the worst kind.

EMD said...

I'm not too fond of agricultural subsidies either.

Bob Ellison said...

Oh, EMD, now you're drawing blood.

Imagine that world: no ag subsidies and no corporate tax exceptions and carve-outs. What a strange world. Most politicians probably can't imagine it at all. Obama doesn't even want it.

Saint Croix said...

Here's one area where liberals are right. The government should aggresively enforce anti-trust.

Why?

Because when businesses get "too big to fail," then tax-payers get screwed.

Very large multi-nationals should be seen as similar to a very large government. It is unhealthy for growth and unhealthy for our society.

Where do new jobs come from? Small businesses!

What you should have in a society is small business becoming large businesses and large businesses dying. Yes, dying! Die you old turd!

What we need to look out for is large multinationals working hand-in-hand with big government. That is death. Not for the corrupt multinational, with its wheezing and gasping and bureaucratic inertia. Not for the big government, with its wheezing and gasping and bureaucratic inertia.

It's death for growth, it's death for jobs. It's death for a society.

Do Republicans like "federalism" and "separation of powers"? Yes! Why? Because power corrupts and we should separate the powers. Limit the government. Limit authority.

We can and should do that with private industry, too. We should encourage competition (which is good for our people) not collusion (which is bad). We should worry about monopolies the same way we worry about big government.

Do you trust a monopoly? Why?

Ma Bell is Big Brother. Same Orwellian rhetoric. Same fascist tendencies. And evil shit rains down on our people!

Break up that evil monopoly! Separate the powers.

At the same time, liberals need to make it 1000 times easier to be a small business. You need to make it easy for a small business to start. Easy to have an IPO. Deregulate, deregulate, deregulate.

This is where economic growth comes from. Why are you killing it?

Populists on the right and left need to make common cause across the aisle.

Liberals need to respect work, and small businesses, and start-ups. They need to understand where jobs come from (small businesses). Liberals need to reduce their bureaucratic bullshit with any small business. It's insanity!

Conservatives need to attack bureaucratic multi-nationals (like GE, for instance) who want to buy their way into the government and pass stupid light bulb regulations so GE can get rich on their stupid fucking light bulb that nobody wants.

Brennan said...

And, I said, the problem arises from the voters' demand to be insured against all risks.

Any ideas of how to counter this? I admit, I ain't got any.


Currency backed by precious metals?

Honestly I do not know. The entitlement society is already here. Too many people fear failure when failure is as vital to understanding success as getting oxygen to the brain.

I think bailouts are considered the least worst decision that could be made. And the reason for that is that the world is much more fragile than people actually believe.

Brennan said...

Conservatives need to attack bureaucratic multi-nationals (like GE, for instance) who want to buy their way into the government and pass stupid light bulb regulations so GE can get rich on their stupid fucking light bulb that nobody wants.

Indeed. We should not pass policy based on the conclusions from citizens that inhabit the land of make believe. Viability in the marketplace is determined by actual, real world tested results, not conclusions from fairy tale story tellers like Al Gore.

AllieOop said...

Thank you for the honesty Mr. Koch, now be the first to refuse any tax payer money that benefits your own energy industries! You may even win respect from liberals.

Shouting Thomas said...

Thank you for the honesty Mr. Koch, now be the first to refuse any tax payer money that benefits your own energy industries! You may even win respect from liberals.

Do you know of any subsidies Koch is receiving?

AprilApple said...

Democrats are the party of corruption on Wall Street. Why won't the Obama Justice Dept go after Jon Corzine? Oh - that's right, Corzine is a bundler for democrats.

garage mahal said...

It's tough being a billionaire out there these days! Sheesh.

Brennan said...

Do you know of any subsidies Koch is receiving?

Shall we ask Austan Goolsbee. He seems to know.

Bob Ellison said...

AllieOop, as I noted above, this is the playing field in business. It's hypocritical to try criticizing a reformer because he/she works with the system he/she has.

AprilApple said...

Romney should promise to go after Corzine.
Promise justice for all the victims who were robbed by that crook.

Shouting Thomas said...

t's tough being a billionaire out there these days! Sheesh.

Point out to me, garage, where Koch complained about his own circumstances in that article.

machine said...

Such short memories...

I wonder why you all do not remember Abramaoff, Duke Cunnigham, Ney, and DeLay...the Kings of cronyism!

Must be nice to live in a world where only your enemies do wrong and yesterday is simply ignored/forgotten...easier to win arguments that way....

AllieOop said...

Also ALEC inspired laws that state legislators bring back home to their respective Legislatures, needs to end. Representative government is one in which we vote in our representatives, not one in which we have corporations writing laws in closed to public meetings with our representatives.

Bob Ellison said...

AllieOop, so ALEC is a bad thing? The First Amendment seems to protect it. You don't like it? How do we do away with ALEC?

Jay said...

AllieOop said...
Also ALEC inspired laws that state legislators bring back home to their respective Legislatures, needs to end


You have not one utter clue what ALEC is or does.

AllieOop said...

Shouting Thomas, read 12th paragraph down in Koch's own article.

hawkeyedjb said...

"You may even win respect from liberals."

Allie, with all respect, I don't think anyone involved in the production of actual energy (as opposed to fantasy Green Energy) will ever win respect from liberals. It's a losing game, and I think Mr. Koch knows that.

Jay said...

Representative government is one in which we vote in our representatives

Yes!

Because ALEC is like taking away elections!!

Or something.

Brennan said...

I wonder why you all do not remember Abramaoff, Duke Cunnigham, Ney, and DeLay...the Kings of cronyism!

Some of us do remember...how they went to jail to serve their time. Except for Delay since he never broke any laws.

Shouting Thomas said...

So, Allie, the Fed under Obama has deliberately tried to suppress the production of fossil fuels for some supposed good, and given tax breaks for the production of "green energy."

The Koch brothers are in the energy business. The Fed has tried to penalize Koch for operating a legitimate biz, and to force it into a goofball biz in order to advance some social good.

I really don't get your point. In fact, I don't think you have one.

It's sort of the same point that commenters often make, that if you don't approve of the welfare state, you should decline to receive Social Security.

In other words... null.

Brennan said...

Also ALEC inspired laws that state legislators bring back home to their respective Legislatures, needs to end. Representative government is one in which we vote in our representatives, not one in which we have corporations writing laws in closed to public meetings with our representatives.

This is pretty silly. ALEC is an organization in response to other groups coming before them doing the very same thing. Holding conventions on public policy sharing model legislation and holding discussions on the viability of legislation so that it is signed into law and upheld in court.

Shouting Thomas said...

Re ALEX...

Allie is really arguing that the Koch brothers should cease exercising their right to free speech.

edutcher said...

Give the man credit, he walks the walk.

And to paraphrase the creep Leftists from the Vietnam War, "If he didn't exist, they would have had to invent him".

EMD said...

I wonder why you all do not remember Abramaoff, Duke Cunnigham, Ney, and DeLay...the Kings of cronyism!

OLD SQUIRRELS!

God, An Original A-hole said...

Somebody should remind Mr. Cock of the rules of government-business favors:

1. You don't talk about Favor Club.

2. You don't talk about Favor Club.

3. PROFIT!!!

And:

This growing partnership between business and government is a destructive force, undermining not just our economy and our political system, but the very foundations of our culture.

...said the intelligent Romans at the dawn of the final century B.C.

And when their warnings went disregarded, their Republic evolved into an autocratic state. The people endowed a single leader with the power to put the Publicani and their patrons in their place.

It can happen again.

rehajm said...

Rent seeking: okay for me. Not for thee.

edutcher said...

God, An Original A-hole said...

...said the intelligent Romans at the dawn of the final century B.C.

And when their warnings went disregarded, their Republic evolved into an autocratic state. The people endowed a single leader with the power to put the Publicani and their patrons in their place.

It can happen again.


It did, 4 years ago.

Lem said...

General Motors Co sold a record number of Chevrolet Volt sedans in August — but that probably isn't a good thing for the automaker's bottom line.

Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.

Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.


If you forgot... GM is the company Biden was touting at the convention.. the taxpayers company.

cubanbob said...

machine said...
Such short memories...

I wonder why you all do not remember Abramaoff, Duke Cunnigham, Ney, and DeLay...the Kings of cronyism!

Must be nice to live in a world where only your enemies do wrong and yesterday is simply ignored/forgotten...easier to win arguments that way....

9/10/12 9:10 AM

Nickels and dimes compared to Corzine. And they went to jail (other than Delay who was found innocent). But a democrat bundler like Corzine who squandered and stole more than billion bucks, why he is OK in your books. You are not a machine, but a tool.

Marshal said...

Lyle said...
Yes, close tax loopholes. Easier said than done though.


The media definition of a tax loophole is "any tax law the left doesn't like". Once you define loophooles to include only issues recognizable to non-activists the effect is very small.

We should do this. But this issue primarily serves as a red herring promoted by those trying to protect their own spending sacred cows.

furious_a said...
This comment has been removed by the author.
Bruce Hayden said...

Soft on Wall Street: Dems weak on corporate crime:

Among the many falsehoods pushed at last week’s Democratic Convention is that this is the party of the people, unafraid to hold Corporate America responsible for its many ills.

Judging by the records of the last two Democratic administrations, just the opposite appears to be true. Certainly, President Obama and, to some extent, Bill Clinton like to talk a good game in terms of class warfare, but under both men, real corporate crime-fighting has been at best a side issue — despite the immense amounts of white-collar fraud their administrations faced.
Corzine: Well-connected Democrat is facing no charges despite losing $1.6 billion — whereas Bush team jailed Republican fat cats.
UPI
Corzine: Well-connected Democrat is facing no charges despite losing $1.6 billion — whereas Bush team jailed Republican fat cats.

In fact, neither Obama nor Clinton can hold a candle to the corporate crime-fighting record of George W. Bush, that supposed lapdog for large corporate interests...


Of course, it doesn't hurt that almost the entire top tier of DoJ attorneys, starting with Eric Holder, came out of white shoe law firms who represented the securities industries and the like.

furious_a said...

machine: I wonder why you all do not remember Abramaoff, Duke Cunnigham, Ney, and DeLay...the Kings of cronyism!

Brennan: Some of us do remember...how they went to jail to serve their time.

Remind me again why Jon Corzine is walking around without an electronic ankle bracelet?

Brennan said...

Nickels and dimes compared to Corzine. And they went to jail (other than Delay who was found innocent). But a democrat bundler like Corzine who squandered and stole more than billion bucks, why he is OK in your books. You are not a machine, but a tool.

Nope. Changing a law has the potential to make Corzine's gambling look like chump change. The Medicare reforms in 2005 were estimated to cost 450 billion. By 2006 the new estimate was 550 billion.

Washington is pretty awful at math, but they are the experts in hiding the decline.

Brennan said...

Jon Corzine is walking around a free man because of the choices made by the Department of Justice.

I believe they have acted foolishly in this case amongst many others. I consider Holder's stewardship of the DoJ as one of the primary reasons to send the Obama Administration packing so they can return to representing the mob in private practice.

Bruce Hayden said...

And they went to jail (other than Delay who was found innocent).

But, I would suggest that he maybe one of the big reasons why the Republicans lost the House in 2006. They had run on the claim that they would clean up Congress, and, yet, DeLay, from his party leadership perch, made it clear that the lobbying money that had gone to the Dems needed to go to the Reps now. He made it clear that the Reps would be keeping track of donations, and not granting access to lobbying firms that preferred Dems.

And, so, by 2006, the Republicans didn't appear any better than the Democrats, whom everyone expects to be corrupt.

Bruce Hayden said...

Jon Corzine is walking around a free man because of the choices made by the Department of Justice.

And, as I pointed out, that at least partially was probably a result of the DoJ being headed by attorneys who were liberal to start with, but who had also been partners in firms that represented companies like his.

damikesc said...

Yeah we do!

Koch is right. And he's brilliant to align himself with the Tea Party.


I wish we did. But, sadly, people keep electing the same dimbulbs who engage in this deplorable practice. Obama is going to get, at least, 47% of the vote. Minimum.

Lots of people don't want to rock the boat.

Sure he does. According to Dems, he has created over four million jobs - which is a hard sell, since there are some 200k fewer people working today than when he assumed office (not even taking into account population growth). Heck, the Dems claim that shoveling some $40-50 billion to the UAW saved some 1.5 million jobs.

Democrats seem unwilling to differentiate "gross" and "net".

Here's one area where liberals are right. The government should aggresively enforce anti-trust.


And conservatives seem to be coming more and more around on that issue. I now fully support antitrust law in some cases. Google needs to have antitrust suits brought up on its search engine, IMO --- while Amazon does NOT need the same for its retail business model (since there is no evidence of abuse on their part in terms of goods sold or pricing).

Also ALEC inspired laws that state legislators bring back home to their respective Legislatures, needs to end. Representative government is one in which we vote in our representatives, not one in which we have corporations writing laws in closed to public meetings with our representatives.

What other groups should be barred from advocating laws, out of curiosity? Is ALEC the only one?

How about the media and their obsession with campaign finance reform (which gives them TONS of power but seems to be a non-issue to voters)?

furious_a said...

Allie: Thank you for the honesty Mr. Koch, now be the first to refuse any tax payer money...

...and leave the field entirely to connected corporate zombies like Solyndra. And stay out of public libraries and off of interstate highways while you're at it.

furious_a said...

dami: Democrats seem unwilling to differentiate "gross" and "net".

It's worse than that -- they don't know the difference.

shiloh said...

Irony aside, says the con corporate billionaire who's trying to buy the presidency for willard.

btw chucky, how's that working out for 'ya ...

Revenant said...

Well said, Mr. Koch.

Tank said...

Having now read the whole article, I see that he said the same thing I said way up thread, "To end cronyism we must end the government's ability to dole out favors and rig the market."

Yes.

And good luck with that.

Methadras said...

Why shouldn't business take advantage of our free fucking money that government is more than happy to hand out? They see it as nothing more than payback from what the government took from them to begin with. Taxpayers see it as the fecklessness of government that is poisoning the economic well with give-aways for the dumbest reasons and with very little to no oversight.

cokaygne said...

I agree with Koch. Government is besieged by lobbyists demanding subsidies or tax breaks. That is democracy. When government gives in to the lobbyists we get crony capitalism.

Why does government give in? Is it because politicians depend on campaign contributions? Is it because SCOTUS says that corporations have the same free speech rights as people? Is it because secret, unlimited campaign spending is now OK?

Insufficiently Sensitive said...

Hear hear, and bravo to Charles Koch. Somebody had to say that, and if Mr. Romney and Mr. Ryan fail to make clear to the public that they oppose such corruption, they're one step further from cleaning up the mess that Obama's Chicago-style vote-buying has added to the load on the taxpayers.