Thought for Today

"The word 'capitalism' is used in two contradictory ways. Sometimes it's used to mean the free market, or laissez faire. Other times it's used to mean today's government-guided economy. Logically, 'capitalism' can't be both things. Either markets are free or government controls them. We can't have it both ways. The truth is that we don't have a free market -- government regulation and management are pervasive -- so it's misleading to say that 'capitalism' caused today's problems. The free market is innocent. But it's fair to say that crony capitalism created the economic mess. ... What is crony capitalism? It's the economic system in which the marketplace is substantially shaped by a cozy relationship among government, big business and big labor. Under crony capitalism, government bestows a variety of privileges that are simply unattainable in the free market, including import restrictions, bailouts, subsidies and loan guarantees. ... Crony capitalism, better known as government bailouts, saved General Motors and Chrysler from extinction, with Barack Obama cronies the United Auto Workers getting preferential treatment over other creditors and generous stock holdings (especially outrageous considering that the union helped bankrupt the companies in the first place with fat pensions and wasteful work rules). Banks and insurance companies (like AIG) are bailed out because they are deemed too big to fail. Favored farmers get crop subsidies. If free-market capitalism is a private profit-and-loss system, crony capitalism is a private-profit and public-loss system. Companies keep their profits when they succeed but use government to stick the taxpayer with the losses when they fail. Nice work if you can get it. ... It's time we acknowledged the difference between the free market, which is based on freedom and competition, and crony capitalism, which is based on privilege."

~~~~~ John Stossel