Good for thee, but not for me — Congress-style

You might remember a blog entry several months ago praising Newsweek for its decision to devote substantial column space to Hoover Institution Fellow Peter Schweizer’s book Throw Them All Out.

Having now read Schweizer’s work, this commentator is not necessarily convinced that the book title offers the proper prescription for dealing with the cronyism plaguing Washington. After all, if we throw all the politicians out, we would open the door for a new batch to sprout up in their place. Like weeds, you might say. The cronies and prospective cronies would start the train rolling again as soon as possible.

But this is not a criticism of Schweizer’s work. In a fast-moving 176-page narrative, he documents the many ways in which members of Congress and — to a different degree, the federal government’s executive branch — use their positions to enrich themselves personally.

This state of affairs might not shock you. What should shock — or anger, or outrage — you is the degree to which congressmen and their cronies benefit from the government in perfectly legal ways. Schweizer documents those legal ways and names names of politicians and donors from both major parties who line their pockets as they perform their “public” service.

Schweizer also offers ideas for fixing the problem. Why does it need fixing? For one thing, all that crony capitalism makes the real system of capitalism less efficient for the rest of us.

It’s no coincidence that the realm of crony capitalism is populated by billionaire financiers and large corporations. As the economist Will Wilkinson puts it, “The more power the government has to pick winners and losers, the more power rich people will have relative to poor people.” And crony capitalism is the ultimate system of wealth redistribution: poor and middle-class taxpayers subsidize the supperrich. Call it trickle-up economics.

It is the nature of crony capitalism to expand. Politicians want more campaign money and personal wealth, so they leverage their position and hand out favors. Corporations and financiers need those favors to get ahead, so they flock to Washington. If you can get early access to market-moving information, if you can secure government grants or subsidies or loans, if you can create regulation roadblocks for your competitors, why not? It is probably more cost-effective than developing a new product or service.

Crony capitalism also breeds inefficiency and confusion, blurring lines between the public and private sectors. The more complex the laws, the better it is for the Permanent Political Class and crony capitalists. A bloated bill of two thousand pages makes it easier to insert and hide things.

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