Crony Capitalism

The Failure of State Sponsored Capitalism

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It is my assertion that over the last few decades since the fall of communism a lack of understanding of how markets actually work has become commonplace around the world. When it was capitalism vs. communism (or socialism, or even fascism), you generally knew where you stood. To wit:

  • Capitalism said that the free market would provide the best outcome for society, while communism / socialism felt that capitalism had to be tempered and / or that key assets should be owned by the state 
  • Capitalism said that government should be small, and stick to a few areas of logical focus such as security and foreign affairs, while socialism / communism celebrated government and government jobs as a way to employ the citizenry and achieve social goals

Subtly, the growing attraction of jobs that were primarily in the government sector (environmental jobs, education jobs, health care jobs, and outright government work) and the basic thought that you could build a nice, steady career there with assured benefits and pensions while “doing right for the world” became commonplace. These jobs were often seen as “nicer” and “better” than the ruthless corporate jobs that are continually vilified or parodied on television (such as “The Office” or virtually any thriller set in business).

On a parallel scale, the idea that “State Owned Enterprises” (SOE) could be a significant part of the world economy, and compete effectively with private sector companies, became widespread. Let’s leave aside the companies that fell into the US governments’ hands during 2008-9 like the banks and car companies; I am focusing on the world wide companies, often country “champions”, that are in our midst and whose performance has now been hit with the usual causes of failure of these sorts of entities, including:

  1. Politically motivated investment
  2. Forced government subsidies or protectionist behavior
  3. Corruption
The “poster child” for this negative outcome is Petrobras, the Brazilian oil company, which is 64% owned by the state.  Petrobras was briefly the 4th most valuable company in the world after their 2010 IPO; now it is barely in the top 100.  Petrobras hits all these typical failure points with a vengeance.  The government forced them to purchase goods and services from inefficient Brazilian suppliers, subsidized their citizens with Petrobras funds, pushed them to invest in deep offshore finds which were risky relative to the company’s capabilities, and finally just engaged in simple corruption to fund their political party candidates.  All of these actions weakened the company and now a downturn in oil prices and a heavy debt load put the company in a seriously bad state.

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Obama’s Amnesty

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I am not happy about Obama making his speech about amnesty and defying the GOP newly elected Congress to do anything about it. However, there is less here than it seems.

First: And to those members of Congress who question my authority to make our immigration system work better or question the wisdom of me acting where Congress has failed, I have one answer: Pass a bill. I want to work with both parties to pass a more permanent legislative solution. And the day I sign that bill into law, the actions I take will no longer be necessary.

king obama

I don’t believe him but the GOP could do worse than assume this is true. The next steps would be to take actions assuming he was not lying.

Obama clearly wanted to make himself look like the compassionate actor in this debate, and Republicans the heartless, cruel nativists. Instead of trying to fight that battle, make Obama own it and bypass it for the real battle the GOP wants to win on border security. Make Democrats vote against a border security bill, and make Obama veto one while his own amnesty remains in place.

Not everybody is willing to accept this as a phony gesture which I think it is.

When President Obama announces that he will be suspending laws to bless the illegal presence of millions of foreigners in the United States, he will have adopted the most basic philosophy of John C. Calhoun: some laws can be tossed aside because his ends justify the lawlessness.

I don’t trust Obama’s intent but I think he is a fool and did not plan this correctly, or else chickened out. There is more interesting comment at Powerline today.

Procedurally what happens is an undocumented person applies for ‘deferred action’ and then after receiving this ‘quasi-status’ he/she is eligible for work authorization.

See the last paragraph on page 4 of this key memo: “Applicants must file the requisite applications for deferred action pursuant to the new criteria described above. Applicants must also submit biometrics for USCIS to conduct background checks similar to the background check that is required for DACA applicants. Each person who applies for deferred action pursuant to the criteria above shall also be eligible to apply for work authorization for the period of deferred action, pursuant to my authority to grant such authorization reflected in section 274A(h)(3) of the Immigration and Nationality Act.”

I still think the Republicans can trump this with real reform. Then they can send a bipartisan bill to Obama and see if he vetoes it. That Powerline post also emphasizes that Silicone Valley is pushing this and that explains their support of Obama.

How many Senate Democrats would be willing to sustain that veto before the 2016 election? I’m betting not too many. But Republicans have a perfect opportunity to turn the debate in that direction now and force Obama and his shrinking number of allies on Capitol Hill to go on the record.

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An Update on healthcare reform.

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Cash medical practice or, in the phrase favored by leftists critics, “Concierge Medicine,” seems to be growing.

Becker is shifting to a new style of practice, sometimes called concierge or retainer medicine. With the help of a company that has been helping physicians make such shifts for over 13 years, he will cease caring for a total of 2,500 patients and instead cut back to about 600. These patients will pay an annual fee of $1,650. In exchange, they will receive a two-hour annual visit with a complete physical exam, same-day appointments, 24-hour physician phone access, and personalized, web-based resources to promote wellness.

The article suggest that all these doctors choosing to drop insurance and Medicare are primary care. Many are but I know orthopedists and even general surgeons who are dropping all insurance.

The concierge model of practice is growing, and it is estimated that more than 4,000 U.S. physicians have adopted some variation of it. Most are general internists, with family practitioners second. It is attractive to physicians because they are relieved of much of the pressure to move patients through quickly, and they can devote more time to prevention and wellness.

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Prediction: Romney 2016.

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I have been predicting this, especially since these polls.

Even the Washington Post has second thoughts.

Romney would hold a slight lead on President Obama if the 2012 election were replayed today, according to a new Washington Post-ABC News poll.

The poll of registered voters shows Romney at 49 percent and Obama at 45 percent in the rematch, a mirror image of Romney’s four-point (51-47) popular-vote loss in 2012.

Now, we have this.

What can I say except I told you so.

Will Romney be different from these other failed nominees? Could he defy the odds and make a comeback presidential bid capturing the GOP nomination after all the doubt, second-guessing and blame that accompany such a loss? According to the latest Quinnipiac poll, many Americans seem to think so—45 percent of voters said the United States would be better off today with Romney as president.

I donated more to the Romney campaign than I have in any other election and I was a volunteer for McCain in 2000.

I told you so. I think there is a case that the 2012 election was stolen.

The knowledge that the 1960 election was probably stolen helped Nixon in 1968. That and the failure of the Johnson Administration in Vietnam. Anyway, I have been predicting this for a while at Althouse and I can’t remember if I have posted this opinion here. Obama, with the time he has left, will make this more and more attractive. I thought we were doomed after 2012. I still think so but maybe I was wrong. The Megyn Kelly interviews with Bill Ayers might even help although she never got into the Ayers-Obama relationship.

I just hope we avoid the worst of the blowback from inept foreign policy before 2016.

More. This is amazing.

All this is weird, unprecedented. The president shows no sign—none—of being overwhelmingly concerned and anxious at his predicaments or challenges. Every president before him would have been. They’d be questioning what they’re doing wrong, changing tack. They’d be ordering frantic aides to meet and come up with what to change, how to change it, how to find find common ground not only with Congress but with the electorate.

Instead he seems disinterested, disengaged almost to the point of disembodied. He is fatalistic, passive, minimalist. He talks about hitting “singles” and “doubles” in foreign policy.

“The world seems to disappoint him,” says The New Yorker’s liberal and sympathetic editor, David Remnick.

Just weird.

Julie Burchill on Margaret Thatcher, Newly Timely After Nine Years

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[A]s some smart-aleck said, we must change or perish. And who should break our long postwar consensual slumber — not with a snog but with a short sharp smack around the head with a handbag and a cry of “Look smart!” — but the Iron Lady herself.
 
Mrs Thatcher meant, and still means, many things — some of which she is not yet aware of herself, as we are not. Only death brings proper perspective to the triumphs and failures of a political career; it is only with the blank look and full stop of death that that old truism “all political careers end in failure” stops being true. Only a terminally smug liberal would still write her off as an uptight bundle of Little Englandisms, seeking to preserve the old order, however hard she worked that look at first; voting for her was something akin to buying what one thought was a Vera Lynn record, getting it home and finding a Sex Pistols single inside.
 
She was just as much about revolution as reaction, and part of any revolution is destruction. Some of the things she destroyed seemed like a shame at the time, such as the old industries — though on balance, isn’t there anything good about the fact that thousands of young men who once simply because of who their fathers were would have been condemned to a life spent underground in the darkness, and an early death coughing up bits of lung, now won’t be?

Here is the original article. RTWT.

Let’s hear that one more time:

“She was just as much about revolution as reaction, and part of any revolution is destruction.”

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