Crony Capitalism

The Newsroom Approaches the Occupy Movement. Maybe it Will Stumble Upon Libertarian Populism.

Everybody hates crony capitalism (except the cronies)

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Is this a U2 album cover?
Source: HBO

Paul Krugman didn't even bother to engage on what "libertarian populism" actually means in his effort at a takedown in a recent column, as Jesse Walker pointed out last week.

Timothy Carney over at the Washington Examiner has been very good at really hitting what the phrase stands for in his regular criticism of federal-level crony capitalism. Today he hits a few goals for libertarian populist economic reforms:

» Break up the big banks, and/or place stricter safety and soundness rules on them: Large banks profit from the presumption of a government bailout and the moat created by regulation. They are creatures of government, and they are insured by government, and so laissez-faire talk here is misplaced.

Free-market types making this argument include Sen. David Vitter in legislation, the Fed's Richard Fisher at CPAC,  and many others.

» Cut or eliminate the payroll tax: A tax on your first dollar means you are paying for Warren Buffett's retirement before you even buy groceries for your children. Richer people live longer, and so they're more likely to enjoy Social Security for longer. Also, the tax is capped at about $115,000 in income, meaning it's regressive. Since it's not really funding Social Security or Medicare — on the margin, they're both funded by general revenues now — let's quit pretending and scrap this tax or scale it back.

» End corporate welfare: Republicans are basically the only ones who voted against reauthorizing the Export-Import Bank. Conservative, free-market lawmakers Mike Lee and Justin Amash have introduced bills to abolish it. The agency puts taxpayer money at risk to subsidize Boeing sales.

Reading his list reminded me of the second season premiere of The Newsroom, which aired last night. I ripped the show last season and watched every episode with revulsion, like a masochist. Aaron Sorkin's worship of progressive technocrat policies, historical revisionism, and dismal attitude that people were just too dumb and uneducated to govern their own lives landed him on our list of 45 "enemies of freedom."

The premiere of the second season approaches the origins of the Occupy movement, so I'm bringing it up in the context of Carney's attitudes on banks and corporate welfare. One of the newsroom staffers finds his way into the early organizing of the Occupy movement (this show takes place two years ago, all the better for Sorkin to game the story to whatever point he wants to make). He hysterically describes the Occupy movement as potentially being America's "Arab Spring," a comparison so misguided and tone deaf that I actually laughed out loud. Even if we consider the Arab Spring an inspiration and account for the idea that the speaker didn't know at the time what would come out of the Occupy movement, the very idea of pushing for political or corporate reform in America can't reasonably be compared to the fight for some very basic freedoms in Middle Eastern countries.

Anyway, at one point the journalist sits down with an early Occupy organizer to talk about their goals and her cynicism of the media. She's already insistent the media is going to get the story wrong (as in, they're not going to say what she wants them to say, which is the same thing). Unfortunately, she speaks fluent Aaron Sorkinese, so at points she was speaking too quickly to grasp everything she was saying. She went on a rant about banks and Wall Street, quickly tossing out "limited government" in an angry tone before mentioning the cozy, crony relationship between banks and the United States, making many of the same points as Carney. It appeared as though she was saying that bank industry conservatives claim to be for "limited government" in order to demand cutbacks while at the same time using their power to push big government policies that benefit themselves. Unfortunately I was not able to determine exactly how nuanced the argument she was making. Given that this is Sorkin, it's possible she didn't understand the relationship and just confused "limited government" with crony capitalism as though the two were inevitably related. It's a very common attitude among progressives, and to be fair, there are certainly plenty of examples to point to.

I am holding out a slight bit of hope that Sorkin knows the difference and will ultimately recognize that the Tea Party and the Occupy movement are both very much interested in some of the exact same issues, but are coming to the same place from different directions. I won't hold my breath, though, given that he spent the first season trying to portray Tea Party members as mean-spirited, petty rubes being manipulated by sinister corporate masters while these new Occupy folks are well-meaning idealists.

NEXT: Law Enforcement Counters Zimmerman Protesters with Riot Gear, Batons and Non-Lethal Ammunition

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  1. They are creatures of government, and they are insured by government, and so laissez-faire talk here is misplaced.

    Them and a million other things too.

  2. Break up the big banks, and/or place stricter safety and soundness rules on them: Large banks profit from the presumption of a government bailout and the moat created by regulation. They are creatures of government, and they are insured by government, and so laissez-faire talk here is misplaced.

    Isnt the easier idea to just let them fail?

    Why break them up when they will break themselves up without any interference?

    1. If they fail, the evil free market failed and brought down a firm leaving hundreds, pperhaps thousands jobless.

      (The following paragraph should be read in Tom Servo’s most pompous voice)
      When the state does it, society is improved! For the state acts with reason and purposes the common good.

      1. Mike: I just asked them to take care of a little problem!
        Crow: And they did! Here comes Mike, Destroyer of Worlds!
        Servo: Oh, god of fire and vengeance ? get away from me, you knob!

      2. Goddamn it! Now I’m reading everything in Tom Servo’s voice.

        1. I like it better read in Tony Soprano’s voice.

      3. And the state is unselfish and altruistic because it doesn’t have a profit motive! Plus it’s “all of us”.

    2. Why break them up when they will break themselves up without any interference?

      That is where this argument seems to veer to the Left. Instead of simply letting them fail when they are no longer propped up by government they want to actively put them out of business, with government.

      1. That way more people can be involved (aka jobs) putting them out of business.

      2. I’ve been saying it for years when lefties start complaining about Big Bank. “I guess we should have let them fail then, eh? How’s that working out for you?”

        1. Well, duh.

          When Washington Mutual failed, I thought the big ones (except maybe Chase and Wells) would fail, with the more risk-averse mid-sized banks taking over their assets and business. If that had happened, we’d be in a much better place–both our economy and we as consumers.

    3. Their size does suggest that any failure will create a lot more hardship when and if they do fail, terrorizing politicians into bailing them out.

      I think the fairest thing would be to scale the size of the reserves they have to hold based on the percentage of the market they represent. Basically, a bank that represented 100% of the market would be banned from fractional reserve banking, a tiny bank would have some 1 or 2% requirement just for the sake of sanity, and it would scale up from their.

      1. That’s a fairly good idea, though it would probably need some tweaking at the margins.

        IIRC, there is some country which has a similar system in place for its banking system.

        1. The market share of any particular bank would be malleable based on its Congressional representation, and I guarantee that factor would scale with size before liability does.

          Neither Congress nor it coterie of regulators has any business making such determinations. Leave it to investors and insurers, and as a last resort, the courts.

  3. Break up the big banks, and/or place stricter safety and soundness rules on them: Large banks profit from the presumption of a government bailout and the moat created by regulation. They are creatures of government, and they are insured by government, and so laissez-faire talk here is misplaced.

    Hmmm how is this sort of talk different from the anarchists who want to grow the state before smashing it? Or those libertarians who want the government to seize all land and corporations so the libertarian TOP. MEN. can redistribute land and wealth in some apparent libertarian fashion?

    1. wait which libertarians advocate that?!

      1. Well what do you think the left-libertarians mean when they speak of “land reform”?

        Also I recall Rothbard writing in the 1970s that in some ways the best way to destatize society was for the government to nationalize land and to seize control of corporations that are too tied to the government. And considering the libertarians that think corporations are tools of the State then it is easy to see what that can lead to.

        1. Left-libertarian is an oxymoron.

        2. And considering the libertarians that think corporations are tools of the State then it is easy to see what that can lead to.

          Large corporations are clearly tools of the state. Always have been.

    2. those libertarians who want the government to seize all land and corporations so the libertarian TOP. MEN. can redistribute land and wealth in some apparent libertarian fashion?

      There is a pretty wide range of opinion here but I wasn’t aware that even the stupidest trolls advocated land redistribution.

      1. How about the left-libertarians?

      2. Then you don’t remember the Libertarian Party Radical Caucus. Later Rothbard & Raimondo went on to other things.

      3. How about White Indian?

        1. All this stalwart libertarian wanted to do was be free to gambol about the land. And he had such reasoned arguments.

  4. he spent the first season trying to portray Tea Party members as mean-spirited, petty rubes being manipulated by sinister corporate masters while these new Occupy folks are well-meaning idealists.

    Truth to Power, he speaks.

  5. Or those libertarians who want the government to seize all land and corporations so the libertarian TOP. MEN. can redistribute land and wealth in some apparent libertarian fashion?

    Yeah, we advocate that around here all the time.

    1. I didn’t say that Reason supported that.

      1. Yeah, you haven’t actually cited ANYONE supporting it, other than the left-libertarian in your imagination.

    2. Darn, Brooks! We been busted!

  6. Sorry Scott, but the evil libertarian overlords who engineered the financial crisis and then demanded bailouts for well-connected megabanks is what the #Occupadoes were protesting against.

  7. How much of the Moneyball script was due to Aaron Sorkin? Not a flawless work (actually, I enjoyed the story and the characters a lot), but when I saw his name, I was kind of surprised it wasn’t worse.

  8. He hysterically describes the Occupy movement as potentially being America’s “Arab Spring,”

    A movement which ends with am Islamist Zealot being popularly elected?

    1. A movement that ends in the tragic realization that a revolution not grounded in the same traditions at those that guided Jefferson and Adams is always doomed to fail?

      1. Shyeah… that’s so far outside any Arab Spring thingy that it’s hard to even conceive of a popular political mass movement has having those traditions.

        Imagine, if you will, people in the middle east, demanding and creating a space where no power exists. Creating a set of founding principles that essentially says, “Here’s our government, and here’s what it can’t do to you… and it it’s not clearly enumerated in this set of documents, it can’t do it at all.”

        1. “Creating a set of founding principles that essentially says, “Here’s our government, and here’s what it can’t do to you… and it it’s not clearly enumerated in this set of documents, it can’t do it at all.””

          I like that idea! Can we get one of those?

        2. If just one Occutard would have set himself on fire it would have all been worth it.

  9. I’m impressed that you could watch this shit, Scott. I can barely stand Sorkin when he’s being mostly apolitical; his super-political shit is poison.

  10. Unfortunately, she speaks fluent Aaron Sorkinese, so at points she was speaking too quickly to grasp everything she was saying. She went on a rant about banks and Wall Street, quickly tossing out “limited government” in an angry tone

    Sounds like in defense of Sorkin, he nailed the Occupy movement: A shaggy pro-government pep rally.

    1. The worst of the sort are the dorks wearing Guy Fawkes masks.

      Thanks to the goddamn Wachowskis, now we get to see these stupid things every time some middle-class white kid thinks they’re speaking “truth to power” yet not really changing a damn thing.

      1. I didn’t know theocratic absolutist monarchy was popular.

      2. We can at least be thankful for them as useful (counter-)indicators of credibility.

  11. I am holding out a slight bit of hope that Sorkin knows the difference and will ultimately recognize that the Tea Party and the Occupy movement are both very much interested in some of the exact same issues,

    *shoots milk through my nose*

    There were some very, very brief intersections. Mostly in the realm of anti-iraq war stuff (to the best of my memory), but I know some Occupy people personally, and there’s somewhere near statistical zero that we agree on. And what we do agree on, we agree accidentally and for different reasons.

    1. Certain writers here don’t understand when the Left falls into agreement with them on a particular issue, it is usually from the philosophically opposite direction and there is no intellectual common ground. Thinking that someone like Sorkin is going to praise you for a minor and superficial agreement is pissing in the wind. It is an insanity that they never seem to learn from.

      1. Yeah. Libertarians and leftists oppose corporate welfare. In response the libertarians want to privatize the losses while the Left wants to socialize the profits.

        The libertarians think reducing state power will reduce corporate power while the left wants to increase the power of a government that they themselves think corporations run in order to control said corporations.

        1. It’s as simple as refusing to recognize that a government or politician that strives to control the business of buying and selling might be receptive to influence peddling by those whose buying and selling is getting controlled.

          Nope, it’s not a willing and receptive government, it’s the fact that someone is asking for influence.

          1. Actually it’s more the latter than the former, cronies have sought government advantage, and offered bribes to secure it, from the dawn of civilization.

        2. Most leftists only oppose corporate welfare when it goes to the wrong corporations.

          1. That too. Rich white able bodied straight men as are okay as long as they are leftist.

            1. In the last half decade or so the left has gotten all nostalgic for the corporatism of the 1950s – which I find funny as hell.

    2. They intersect more, and more strangely, than you may realize. Here in the Bronx, the Tea Party’s predecessor was The Committee to Save Medicare. And what’s really funny about it is that it’s indistinguishable from the John Birch Society, which was of course anti-Medicare.

      1. All those old white crackers look the same.

  12. Well at least the banks paid back their bailout loans. When may we expect to see Solyndra’s payback Mr. Sorkin?

  13. “Break up the big banks, and/or place stricter safety and soundness rules on them: Large banks profit from the presumption of a government bailout and the moat created by regulation. They are creatures of government, and they are insured by government, and so laissez-faire talk here is misplaced.”

    Aren’t the banks prevented from operating without government insurance? If I am understanding the libertarian populist philosophy, if an industry is heavily regulated and the government forces subsidies on it the libertarian populist rejects the free market? That seems like a good one-way ratchet towards authoritarianism.

    1. No they’re saying that there is nothing free market about the banking system at all, so opposing government driven restructuring of that system on free market grounds is idiotic.

      That does not mean that eliminating all government involvement in the banking sector is not the preferred solution. It means that they think it’s a politically impossibility and that it’s better to have a number of smaller cronies in competition than a government-syndicated system.

      IOW libertarian purists make the perfect the enemy of the better.

  14. “Geo-Libetarians” are idiots.

    Feel better?

    1. Are you responding to me? Haven’t you Pantsed the thread twice now?

  15. I look forward to not watching the new season of The Newsroom and its hard-hitting analysis of stories that happened two years ago so they can preach at us with hindsight.

    I may take a glance when they get to the Zimmerman case in 2015.

    1. I am sure that, as with Citizens United, Sorkin will still get the facts wrong with 2 years of hindsight.

  16. Re: Scott Shackford,

    I ripped the show last season and watched every episode with revulsion, like a masochist.

    Your bravery and valiant efforts shall be rewarded in the next life, in the form of 72 slutty college girls that give great head.

    1. I, uh…….I thought Shackford was gay?

      1. Well, to be fair, 72 virgins aren’t all they’re cracked up to be, either.

      2. He can wear a blindfold and pretend they’re men.

      3. Who said he was going to heaven?

        1. “rewarded”.

      4. He, uh, gets complimentary mandatory reparative therapy?

        1. All he needs is some non-sexual male bonding and 72 slutty college chicks won’t be enough!

  17. My favorite part was the Occupiers announcing “No police, no reporters”. So much for being open and inclusive. Like an undercover cop or reporter would just get up and say “Sorry, I’m leaving now”.

  18. Given that this is Sorkin, it’s possible she didn’t understand the relationship and just confused “limited government” with crony capitalism as though the two were inevitably related. It’s a very common attitude among progressives, and to be fair, there are certainly plenty of examples to point to.

    Don’t give ground to the Marxists who are unable to distinguish between successfully competing in a free market and special privileges conferred by the government. Which is ironic since Will McAvoy in the first episode when he bravely attacks a college student, lamenting that America is number four in exports. Subsidizing exports while raising tariffs on imports is a conferral of privilege on certain industries and a common policy of mercantilism.

  19. I won’t hold my breath

    This is what we call planning ahead.

    Scott, whatever you think you did to deserve this kind of punishment, it wasn’t anywhere near that bad. We’re your friends here, we care about you, COME OFF THE LEDGE.

  20. Gotta mention:
    I *really* don’t watch tv, to the extent I didn’t realize that The Newsroom was a tv fiction; thought it was a news program, and it took a lot of context from the comments before it hit home.
    So now I see Shackford’s commitment!

  21. Sounds like some serious smack dude.

    http://www.Privacy-Web.com

  22. Occupy=Useful Idiots,and Sorkin, for that matter, maybe a little more useful. Ya gotta have crisis in order not to waste it. So here we are debating what dog shit smells like. I’m pretty sure Marx told us what dog shit was going to smell like when it came to central banking. And that’s a crisis they definitely don’t want to waste.

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