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It's A Gray Area: Cronyism is not capitalism

February 03, 2012|By James P. Gray

We all should long for the days of Mark Twain, who was heard to say: "There is good news from Washington today. Congress is deadlocked and cannot act."

Unfortunately, our Congress today is acting a great deal in sponsoring cronyism. That means that there is a large amount of collusion among businesses and special interests, on the one hand, and government, on the other. The resultant government favors, payoffs and bailouts are enriching those who are well-connected, but are literally making the rest of us impoverished.

Make no mistake about it, cronyism is not capitalism!

As the Mercatus Center at George Mason University says, "A system that privatizes profits and socializes losses is ripe for abuse, and ultimately doomed to fail."

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And the contrary, as expressed by economist Milton Friedman, is also true, that no country has ever raised itself up from poverty except through the use of the system of free enterprise capitalism.

So with the coming elections, it is time to focus our attention upon candidates who would reduce the intervention by the government in the marketplace, and to require all companies either successfully compete on a level playing field or go out of business. Governments simply should not be subsidizing businesses or bailing them out.

That means among other things that the federal government should not arbitrarily choose to subsidize ethanol made from corn instead of using other plants like sugar cane, switchgrass or hemp. Most scientists feel that many other plants are much more effective to use than corn, so why not let the market decide this issue instead of the government?

It also means that if a high-speed train is to be built, it should be built with an eye toward making a profit, which will occur if the costs are reasonable, and if riders will use it. And who is in a better position to make those estimates, private investors or the government? The same thing is true with regard to health care, education and programs like Fanny Mae and Freddie Mac, which are directly responsible for our current housing crisis. Government has no business interceding in the marketplace. It only leads to cronyism and other troubles.

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