David Stockton on Crony Capitalism

[Gary G]

http://lewrockwell.com/orig11/stockman8.1.1.html
(which should be the State of the Union address)


Actually, Stockton misses the fix. The only viable solution would be a government so small and so limited that it could not possibly give special privileges to any company or individual. This is what the Constitution was supposed to do, but failed.


The question is, when the system breaks and after the turmoil subsides, do we look for a strong man proclaiming great promises like the Germans did (Hitler) or do we demand a libertarian society as in 1776? History indicates the former is more likely.


I think this is a concern to Ron Paul and hence he continues his message of liberty. And more and more people are listening.

[Gary G]

They like a 'game' without rules and no referees; hence their incessant whining about too much government, regulations, and organized labor....Sad fact is we don't just need small governmnet and carte blanche laissez-faire, which would lead to more militarism and inequality. Inequality always leads to fscistic governmtens and tyranny

(I would consider Stockton a monetarist and not an austrian.)


Big corporations have, for the last hundred years, used government to control competition and gain monopolies. This is certainly not laissez faire.
As for inequality, the Federal Reserve has been the greatest cause of inequality. [size=78%]The printing of money causes the poor and middle class to lose in buying power and thus wealth, while it flows to the government and it's cronies.[/size]

[size=78%]When entrepreneurs risk their wealth and are successful, they reward the lives of many others both in products provided and well as increasing the living standards of their employees and connected industry. The is no such thing as a robber barron which is a marxist myth.[/size]

If a worker does not feel that he is better off by having the job, he will not take the job. After he is hired, if he does not feel that he is better off, he will quit and do something else. For this reason, the employer must pay him a market wage in order to keep valuable employees. Wages, like all other prices, are set by supply and demand. In the same way, the entrepreneur is rewarded for risking his capital and will invest his new wealth in expanding the company or in another business creating more jobs, helping more people. If he is successful, others will enter the field creating more jobs. This is lassez faire. Now the entrepreneur would like to prevent that competition and would, if possible, use the government in requiring licenses, permits, regulations or any other means to discourage the competition. This is crony capitalism. Under lassez faire, all people would be wealthier and everyone would have a job. There is always plenty of work that needs to be done. Some would be wealthier than others, but some have greater abilities than others. The promise of socialism was to make all the people equally wealthy. To a point it did; it made them all very very poor.
 As for militarism, that comes from a larger government. One that can tax to pay for it or one having a central bank that can print the money to pay for it.

[Gary G]

[In fact, I once took an economics course at Dartmouth and the professor informed me that supply-demand theory is basically BS, a myth, an attempt to explain raising prices for the masses...prices are determined by what you can get away with? ]


Obviously, he was a BS keynesian.
Prices are always what you can get away with. The consideration is, if your price is above the market clearing price demand will fall and supply will increase as you fail to sell your product. Likewise, if your price is below the market clearing price, demand will increase and the supply will decrease leaving you empty handed. or the shelves empty. Price is a discovery process and after it is settled on, it tends to stick for a time, until either supply or demand changes. That is why tomatoes cost more in the winter time.


The increase in the money supply is what makes prices go up. Our government thinks printing money helps the economy. If a good fairy came in the middle of the night and doubled everyones money, nothing would change. Very quickly everything would cost twice as much as before. The next day the demand for products would double therefore the prices would double to maintain the supply, else the shelves would go bare.


TM here is an excellent little book explaining many of the things that we have come to believe that are simply not true. I wish everyone would read it. It was helpful to me.
http://mises.org/store/Unmasking-the-Sacred-Lies-P569.aspx