Sunday, September 4, 2011

Sarah Palin condemns crony capitalism.

Yesterday Sarah Palin condemned crony capitalism and was, apparently, cheered for it by her audience of supporters. This could be a sign that the Tea Party is beginning to realize that its ranting about "socialism" has been misdirected. Yes, there is a bit of socialism here and there in the US economy and in government policies, but it is really rather minor, not significantly more than it has been for decades and not a root cause of the Great Recession. That's much more due to government doing favors for selected business sectors such as housing and finance and carelessness about such matters as moral hazard, market distortion and fiduciary irresponsibility. Government spending through excessive use of credit, and encouraging the same by households, was also an underlying cause. This has little to do with "socialism" in any proper meaning of the term.

I prefer the shorter, simpler term "corporatism", especially as cronyism is not always a part of it, but "crony capitalism" definitely comes much closer to identification of the disease than "socialism".

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