by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Michael Tanner of the Cato Institute uses his latest National Review Online column to spotlight one presidential candidate’s focus on cronies.
As Carly Fiorina gets a second look following her strong performance in last week’s debate, observers are noticing the emergence of an interesting theme in her campaign: opposition to the crony capitalism that infests so much of our economy today. “What we have now is less and less free market,” Carly points out, “and more and more crony capitalism.” It is a distinction that her opponents would do well to note.
A lot of people use “crony capitalism” to mean any business practice of which they disapprove. But the term actually has a more precise definition. Crony capitalism is an insidious system in which businesses’ success is based on a close relationship with government, and specifically with the people in power who dispense favors, subsidies, bailouts, and other forms of special treatment.
From TARP to the Export-Import Bank, crony capitalism has increasingly squeezed out the genuine free market in our economy. It is the reason why so many businesses spend as much time courting politicians as they do innovating and creating. It is the reason why Washington is a buzzing hive of lobbyists, and why six of the ten wealthiest counties in the United States are D.C. suburbs. Crony capitalism costs taxpayers roughly $100 billion per year, according to Cato Institute estimates, and consumers hundreds of billions more in higher prices. It slows economic growth and leads to greater inequality.
Unfortunately, far too many of Fiorina’s fellow candidates are far too comfortable with this corrupt system.