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Donald Trump: The Honest Crony Capitalist
Let us give a moment of thanks to Donald Trump. Amid the swirl of political spin he has given the American people a frank and brilliant lecture on the nature of modern capitalism. The thesis of Mr Trump’s discussion, whether he understands it or not, is that capitalism is dead in America.
The spectacle of the primetime debate was impressive. Here is a billionaire, standing as a semi-serious candidate for the presidency, who openly brags about his use of political influence in acquiring his fortune. Witness this exchange early on between Rand Paul and Donald Trump:
PAUL: Hey, look, look! He’s already hedging his bet on the Clintons, OK? So if he doesn’t run as a Republican, maybe he supports Clinton, or maybe he runs as an independent…
BAIER: OK.
PAUL: …but I’d say that he’s already hedging his bets because he’s used to buying politicians.
TRUMP: Well, I’ve given him plenty of money.
The undertone is striking. Trump is accused of buying and selling politicians, then shrugs off the accusation by implying it’s no big deal. Just so there is no misunderstanding he clarified this point later on:
BAIER: Mr. Trump, it’s not just your past support for single- payer health care. You’ve also supported a host of other liberal policies. Use — you’ve also donated to several Democratic candidates, Hillary Clinton included, Nancy Pelosi.
You explained away those donations saying you did that to get business-related favors.
And you said recently, quote, “When you give, they do whatever the hell you want them to do.”
TRUMP: You’d better believe it.
BAIER: So what specifically did…
UNIDENTIFIED MALE: That’s true.
BAIER: — they do?
TRUMP: If I ask them, if I need them, you know, most of the people on this stage I’ve given to, just so you understand, a lot of money.
If you look up “brazen” in Websters there’s a picture of Donald Trump giving a toothy grin. Just by being his obnoxious unfiltered self, he has given us a glimpse into how modern America truly works. While something resembling traditional American capitalism can still be seen in Silicon Valley, huge swaths of the economy exist as a crony capitalist’s paradise.
The key element here is regulation. The more regulated the sector, the easier it becomes to run to Washington, or the state capitals, with requests for special waivers, preferences, and deferrals. For some this is defensive lobbying; running to government to defend your business from the predations of others. For others this is offensive lobbying, where the businessman is playing the role of the predator. At a certain point — when government grows sufficiently large — the two become almost indistinguishable from each other.
In Manhattan real estate, where the first zoning laws were passed way back in 1916, the game is now so thoroughly crooked that there are no white hats and black hats, just an undistinguished line of grey from Battery Park to the Bronx. You can damn Trump for his corruption, or even sneakily admire him for his skill at manipulating an inherently corrupt system, yet he is more than most a product of his time and place.
We have been provided with an object lesson about modern American business. Whoever wins the Republican nomination should swear that he will begin the process of dismantling the system of American crony capitalism. There are thousands of mini-Donald Trumps all across America. Each and every one needs to be taken down a peg.
Published in Elections, General, Politics
Yep.
But here’s what struck me. If Trump had “bought” all those candidates, they certainly don’t seem to be doing his bidding at the current moment. Turns out he hasn’t given to quite as many of them as charged, but those he has seemed quite willing to do their own thing.
I understand he said he gave $10,000 to Walker’s gubernatorial campaign. But presumably — apart from the fact that he’s still running against Trump in the primary — Walker hasn’t exactly been doing whatever Trump wants, or Trump wouldn’t have all those things to say about how bad things are in Wisconsin.
And obviously Rand Paul — past Trump money or no — feels quite free to stand up on stage and attack him.
Even on his own terms, his argument starts to look rather weak.
Obviously, if Trump really wants to help America, he’ll bribe legislators to do something about illegal immigration.
He’s pays his protection money. So what?
You buy favors; you buy influence; you buy I.O.U.’s; you don’t buy control.
If you want to get money out of national level politics you must reduce the size of the Federal government. Eliminate the need for crony capitalism by eliminating the regulation-producers in the federal bureaucracy that the crony capitalist must defend against or assuage with political donations to politicians who ostensibly control them.
It was a pretty genius “let he who is without sin cast the first stone” moment.
Sure, but he’s talking about how they have to do whatever he wants. He’s overselling it, and it starts to ring hollow.
Trump is basically the Jack Nicholson character in A Few Good Men, screaming “You can’t handle the truth!” “You need someone like me on that wall!” to the American people.
We’ve been watching for 6 years as Obama, has largely gone un-checked, lying and cheating to get his every wish. Many are rightfully pissed off.
Are we looking to restore this thing or do we want to get back at all these hucksters? That is the question. I don’t think we can have both. Trump is a proven liar, cheater and hustler. He’s not looking to get into the White House to cede power back to the people. If he cheats on us, we aren’t going to get half the Gov’t in the divorce settlement.
Trump is willing to stand in front of the American people and admit, even brag, that he buys politicians for personal gain, and some of you say, “So what?” It’s a corrupt system, he just takes full advantage of it. Why, he’s the George Washington of our current moment. He will make America great again!
Will he try, if elected, to reform the system, or will he see how much he can manipulate it while in office to make himself ten times richer than he already is?
Some people seem to think that this is a game, and it’s entertaining to see a character like Trump run for president. I’m sure that the Turks were entertained by Erdogan, the Venezuelans by Chavez, the Egyptians by Morsi….
We should be careful about the sort of person we put in power.
If Trump can buy them, then they are for sale, or at least for rent. And rent-seeking business people pay the rent in hopes of getting a return on their investment. If the Import/Export Bank vote in the Senate has any meaning, it is that the rent-seekers are expecting a payback from the House and the Senate involving taxpayer backing for their ventures.
Yet, as was noted above, there are limits to what can be bought. Those $10,000 checks aren’t big enough to get people to part from the race, at least yet.
On another thread someone else [sorry, can’t recall who] pointed out that crony capitalism is a misnomer. It’s not capitalism at all; it’s economic fascism wherein the government exerts control over, and grants favors to, privately-held enterprises. More specifically,
This is not the description of a capitalist system, but it does describe certainly elements of the US economy today. To conflate this form of socialism with free-market ideas is a slander to capitalism.
Edit: Here are a few previous comments by others along these lines:
Great Ghost of Gödel
Little Ricky Cobden
A-Squared
Saying Trump oversells something is like saying Hillary has issues with keeping her dog on the porch. After awhile, its barely an eyeroll.
On Ex-Im, there is an alternative meaning. It has no chance of passing the House anyway, so the Republican leadership in the Senate could afford to allow some Senators to case a vote in favor, in order to appease important constituencies in their state with no practical downside.
I know, politics is sometimes like making sausage. But I still like sausage.
Sausage is awesome!
It’s easy to rail against government regulation, and absolutely correct to note that it creates a risk of corruption.
But not all regulation is bad. We live in a physically interconnected world, and this interconnectedness creates problems, generally with greater frequency in urban areas. If a developer builds a mall or shopping center, the traffic is going to have a major effect on the surrounding roads. The developer needs to include adequate parking, and if he doesn’t, some of the cost is passed off on others, as people will park on nearby streets. Many businesses — even those as innocuous as bakeries and Burger Kings — release pollutants into the surrounding air or water, which does effect others.
Economists call these issues “externalities.” They are real, and government regulation is often the best way to deal with them. I wish this weren’t so. But as conservatives, we need to acknowledge reality.
I sympathize with those who say, for example, “abolish the EPA.” I agree that the EPA has overreached, most notably regarding CO2. But I’m old enough to remember smokestacks pouring nasty stuff into the air and to remember a repulsive brown cloud (mostly from auto exhaust) blanketing my fair city before the days of emissions controls.
Sometimes, complex problems have simple, easy to understand, wrong answers.
It was interesting, though, that Trump backed away when he had the chance to drive the point home.
He got favors for his money. But the favors were NOT Hillary showing up at his wedding. The favors were phone calls and memos and friendly vibes whenever anything fell to the discretion of a government official or bureaucrat.
But if he had admitted that, it might have amounted to actual bribery. So he wimped out.
There are right wing and left wing versions of the crony capitalist argument. Left wingers tend to believe that big business buy politicians and run the show. Right wingers tend to believe that established business forces crush small competitors and then get co-opted by the government forces they originally sought to control.
Ex-Im reauthorization, as I understand the situation, would easily pass the House–thanks to all the Dems and a sizable rump of Repubs. That the rump is less than a majority of the caucus and doesn’t include most of leadership (the Speaker is the exception) keeps the thing in the grave. Here’s to the Horatios at the Bridge: Ryan, Hensarling, Scalise, McCarthy and everyone else in the Brave Few. Crony capitalism is far from dead or even feeling a little bad.
the place seeking is not something anyone starts out to do. it is the price of doing business. look to the episodes of The Sopranos when tony reflects on his father’s career and his childhood, and even Tony’s dealings with local businesses.
Open a bakery on a corner in an area ‘owned’. your FIRST customer will be a guy who admires your shop, loves your bread, then speculates on what damage an oven fire might do. And then, offers you protection from such fires and neighborhood hooligans and so on. rest assured, if you don’t buy the ‘insurance’ a tragedy will happen.
No difference in business. years ago, starting my own business, the first thing I had to do was pay the government for the privilege of selling my services. My husband spent his life in the trades. more specialized and unusual than most, he was an Elevator mechanic for 27 years. Today he’s an inspector. While I joke that he ticks people off for a living and kid about ‘graft’, in a very real way, it still exists.
and, the larger a company grows, the more they must ‘kick up’. at a certain point, the vig goes to politicians instead of mobsters (but, really who can tell the difference). this is the price of growth in America.
Before you lovingly embrace government (especially federal government) action to address externalities, please familiarize yourself with the work of economist Ronald Coase. and Coase’s Theorem. From the wiki page:
You might also want to read Coase’s paper. Once you’ve done that, feel free to wax poetic about the need for government regulation to avoid the evils of externalities, possibly along with an explanation of why Coase is wrong.
Coase (a genius of the first rank) would agree that when the parties whose joint conduct is having effects on one another are not in a position to bargain, perhaps because there are too many to avoid hold-out and free-rider problems, that property rights will not suffice to deal with externalities, and that regulation may be necessary.
But having said that, the regulation should take the form that allows the people who are affected, and who know much more about the efficient outcome than the regulators would ever know, to fashion an efficient remedy themselves. For example, setting pollution limits rather than mandating smokestacks.
Understood, but this does not necessarily require federal action. The EPA was established because pollution can cross state lines. Nevertheless, large states like California took matters into their own hands, for better or worse, thereby contradicting the thesis that regulations had to be at the federal level. Furthermore, states can settle these matters among themselves through negotiation (viz. water rights) or in court.
Before accepting federal involvement, all other alternatives should be exhausted, starting at the lowest level of individual actors and working up through municipal, state, and finally the federal level. It rankles me to see conservatives give up on subsidiarity so easily and immediately jump to the federal administrative state. In environmental issues, as with so many other topics, we must resist accepting the Leftist premise rather than just arguing about implementation details.
Aaack! The Trump ascendancy is causing me to suspect that the good old U.S. of A. has had it. I was accustomed to the insanity of the elites and the left, but I thought Joe and Jane Sixpack still retained a modicum of common sense. Apparently not. Out of a field of remarkably talented and able candidates, the regular folks have fallen in love with the one in clown shoes. I despair.
I couldn’t agree more.