An Economy of Liars–When Government and Business Collude, It’s Called Crony Capitalism.

Article posted on June 30th, 2010 by WhatAmIMissingHere

Plague of Lobbyists by RJ Matson, Roll Call

“Expect more of this from the financial reforms contemplated in Washington.”

Sometimes, while in the midst of analyzing current events, such as the proposed financial regulatory bills, its helpful to look back at some earlier relevant articles or commentary.  And, ask yourself  “Isn’t this what is still happening today in Congress and in Washington?”

One such article is  “An Economy of Liars” written by Gerald P. O’Driscoll, Jr. for the Wall St. Journal in mid-April.

His main conclusion:  “Free markets depend on truth telling.  Prices must reflect the valuations of consumers;  interest rates must be reliable guides to entrepreneurs allocating capital across time; and a firm’s accounts must reflect the true value of the business.  Rather than truth telling, we are becoming an economy of liars. The cause is straightforward: crony capitalism.”

Driscoll argues strongly that “While protecting citizens against force, both at home and abroad, is the government’s most basic function, protecting them against fraud is closely allied.  By the use of force, a thief takes by arms what is not rightfully his;  he who commits fraud takes secretly what is not rightfully his.  It is the difference between a robber stealing brazenly on the street and a burglar stealing by stealth at night.  The result is the same: the loss of property by its owner and the disordering of civil society.  And government has failed miserably to perform this basic function.”

“Financial services regulators failed to enforce laws and regulations against fraud.”

“Congressional committees overseeing industries succumb to the allure of campaign contributions, the solicitations of industry lobbyists, and the siren song of experts whose livelihood is beholden to the industry.  The interests of industry and government become intertwined and it is regulation that binds those interests together.  Business succeeds by getting along with politicians and regulators.  And vice-versa through the revolving door.”

Driscoll reiterates “We call that system not the free-market, but crony capitalism. It owes more to Benito Mussolini than to Adam Smith.”

Read this full still-timely commentary here.

Be Sociable, Share!
Print This Post Print This Post Send To A Friend Send To A Friend

Post a comment

Do you have an interesting news story that just doesn't "add up," or is not receiving the appropriate coverage in the news, just let us know. We'd love to hear it! And, we'll investigate. CLICK HERE.
Get What Am I Missing Here delivered to your inbox for FREE!