Don Boudreaux, Susan Dudley, and Bradley Schiller make some good points:
-Companies spending lots of time and money in Washington begging for handouts is not capitalism.
-Stricter regulation isn’t the solution. Companies routinely rig regulations in their favor to hobble competitors. That isn’t capitalism, either.
If the embedded video below doesn’t work, click here.
Here’s a letter to The Wall Street Journal:
Editor, The Wall Street Journal:
Andy Stern’s December 1 op-ed, “China’s Superior Economic Model,” blames America’s free-market fundamentalism for its economic troubles.
If America is indeed a free-market fundamentalist nation, it sure has a funny way of showing it. Federal, state, and local governments combine to spend roughly 40 percent of GDP. Washington indirectly spends another 12 percent of GDP by forcing businesses and consumers to comply with $1.75 trillion worth of federal regulations.
In his eagerness to attack free markets, Mr. Stern has confused the mixed economy’s crony capitalism for the real thing.
Competitive Enterprise Institute
This picture has been making the rounds on the Internet. Click to enlarge. Keep in mind that it does not describe capitalism; it describes cronyism.
Have a listen here.
CEI Founder and President Fred Smith compares the Occupy Wall Street movement with the Tea Party movement and finds similarities as well as differences. Both oppose bailouts and other forms of corporate welfare. But, as he points out in a recent USA Today op-ed, he fears the Occupiers are confusing such crony capitalism with the real thing. If corporations have undue influence over government, making that government bigger and more powerful will only worsen the problem. The solution is separation of corporation and state.
Wayne Crews and I have an article in today’s American Spectator about the antitrust crusade against Intel. Our key points:
-An FTC picking winners and losers is not capitalism. It is crony capitalism.
-Chips in “Wintel” desktop computers increasingly constitute just one subset of a vast semiconductor market. Only a small fraction of the chips in non-PC devices are Intel’s — and these devices are where the future lies.
-Regulators’ charges against Intel have changed over the years, but their verdict always remains the same: guilty. Suspicious.
-We’d be better off prosecuting the DOJ and the FTC for colluding against free enterprise.
Posted in Antitrust, Economics, Publications, regulation, Technology, The Market Process
Tagged amd, Antitrust, antitrust crusade, capitalism, competition, computer chips, computers, corporate welfare, crony capitalism, doj, ftc, intel, nvidia, Public Choice, rent seeking
Russ Roberts’ testimony in front of the House Committee on Oversight and Government Reform is superb. Read it (it’s short). Wall Street deserves plenty of blame for the financial crisis. But Washington deserves more:
When your teenager drives drunk and wrecks the car, and you keep giving him a do-over—
repairing the car and handing him back the keys—he’s going to keep driving
drunk. Washington keeps giving the bad banks and Wall Street firms a do-over. Here are
the keys. Keep driving. The story always ends with a crash.
I’m mad at Wall Street. But I’m a lot madder at the people who gave them the keys to
drive our economy off the cliff.
Over at NPR, George Mason professor Russ Roberts looks at why Goldman Sachs prospers as Bear Stearns and Lehman Brothers die, despite following more or less similar business practices. Key point:
[C]apitalism is a profit and loss system. The profits encourage risk-taking. The losses encourage prudence. If the taxpayer almost always eats the losses for the losers, you don’t have capitalism. You have crony capitalism.
The content deserves close study. So does the delivery; Russ is one of the clearest economics writers there is.
Posted in Argumentation, Bailouts, Economics, Philosophy
Tagged bailout, bear stearns, capitalism, crony capitalism, goldman sachs, lehman brothers, npr, russ roberts, wall street