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Blue For Who?
How Crony Capitalism Works
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  • Tom

    And this website has managed to touch on part of the appeal of “The Toupee”–the hope that, if he is elected, everyone will feel your pain.

  • Kevin


  • qet

    I haven’t read Roth’s piece but this summary suggests no new ideas but just a timely reiteration of an old one: the distortion in practice by politics of free market economic theory. The complaints are not wrong. There was a time–the early 20th century–when the Supreme Court attempted, as Cassius suggested, to kill the blue serpent in its shell, by inventing the “substantive due process” doctrine. Lochner v New York became the public face of that doctrine and was ridiculed to death by the incipient blue elite of the New Deal.

    While I tend to agree that the doctrine ceded too much political authority to the Court, its spirit was certainly correct. Really what needs to happen is one or more amendments to the Constitution that enact the kind of limitations substantive due process intended, because Congress surely never will abandon these levers of power voluntarily.

  • Jacksonian_Libertarian

    “The solution to this problem is not to try to reconstruct the blue model by strengthening monopolies and jacking up taxes and regulations. Rather, it’s to introduce competition into industries that have so far been shielded from it, by, for example, undoing repressive occupational licensing rules, modernizing higher educational accreditation, and repealing hedge-fund friendly financial regulations.”

    Excellent, I have been pointing out for some time that it is the “Feedback of Competition” that provides both the Information and Motivation which forces continuous improvements in Quality, Service, and Price in free markets. Monopolies on the other hand, including the Government Monopoly, Labor Gang Monopolies, and the Limited Monopolies of Big Business and the licensing regimes, all suffer from the same disease, the lack of the “Feedback of Competition”. All human organization can be placed on a line between Monopoly and Free Market.

    It was America’s cultural commitment to Free Markets that caused America to rise to dominate the world, and it is the decay of that commitment to Free Markets that is responsible for America’s declining strength over the last 100 years or so. If America can’t find a way to force the bloated Government Monopoly back inside Constitutional limits, its lack of growth and improvement will eventually end America’s dominance.

  • Markets and competition aren’t what’s working for the elites to which you refer. As you and Rothwell point out, what’s working for them is government intervention. Why should they even try to prove that markets provide an income proportionate to workers’ talents and abilities? They don’t believe it themselves.

    They who take the sword …

  • charlesaustin

    Actually, I think Jonathon Rothwell challenged standard assumptions about inequality on the left and progressive caricatures of standard assumptions about inequality on the right, but please, go on. The ruling class is acting as ruling classes always have, securing their sinecures and then building barriers to everyone else. The proper term for this is less crony capitalism than gangster government.

  • Jeremy Klein

    And the solution is, as always, follow the Constitution. The powers are enumerated, and the 10th Amendment puts the nail in it, for those who are not in denial: Congress’s authority is limited to what is listed. If it ain’t in there, it’s illegal for them to pass laws concerning it. Thus, EPA, SocSec, OSHA, and a vast swathe of Fed bureaucrazies and regs are obviously unConstitutional and ought to be unenforced by the Executive, repealed by the Legislative, and, if the former fail to act appropriately, ruled so by the Judical branches. In the final act of desperation the States should refuse to allow grossly unConstitutional laws/regs to be enforced within their borders.
    But We the People are a wicked, lazy, and traitorous Sovereign of this nation. We have deliberately hired executives and legislators to trample our Foundational Law in the dirt, or We are too willfully ignorant to pay attention as it is so trampled. We do not yet have the gov’t We deserve, but We’re getting there. This does not end well.

  • Jim__L

    “repealing hedge-fund friendly financial regulations”

    In honor of Willie Sutton, this is where we should start.

    • Forbes

      Would you care to specify the ‘hedge-fund friendly financial regulations’ in need of repeal?

      • richard40

        The original Rothwell essay listed some examples. One I remember is hedge funds can assume a lot more leverage, which gives you more risk but also more return, than middle class orientated mutual funds can, giving them a competitive advantage. Considering the damage done by over use of leverage in the financial crisis, I think limiting hedge funds to the same kind of leverage as mutual funds would be a good idea. If they want to expand big they can still use equity financing, which adds stability during any financial crisis. I would do a similar thing with big too big to fail firms, instead of all the absurd dodd frank regs, which are mainly harming small community banks, which were never a problem in the first place.

  • teapartydoc

    Abolish medical licensing.

  • richard40

    Great article, unfortunately the only guy out there I see who might have any real interest in fixing this is Cruz, since he actually has taken actions in the past to fight it, but who may not win. Trump may make a big game of talking abut it, but since he was a crony capitalist himself, will he actually fix it, i doubt it. Bernie may talk abut it as well, but replacing crony capitalism with socialism is just changing the cronies, and making things worse.

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