Palin: End crony capitalism

posted at 10:55 am on April 23, 2010 by Ed Morrissey

In times gone by, the Democratic Party used to complain that the GOP was the party of “crony capitalism.”  These days, with the political connections of Goldman Sachs and other Wall Street firms to the Obama administration and to Democrats, the least that can be said is that the playing field has been leveled.  Both Republicans and Democrats spent hundreds of billions on bailouts of supposedly private corporations in 2008 and 2009, saddling American taxpayers with enormous debt while protecting big contributors from utter financial collapse.

Sarah Palin issued a rebuke to the entire practice of crony capitalism from her Facebook platform this morning, and demanded an end to the “too big to fail” mentality that results from it:

The current debate over financial reform demonstrates what happens when political leaders react to a crisis with a raft of new regulations. First off, the people involved in writing government regulations are often lobbyists from the very industry that the new laws are supposed to regulate, and that’s been the case here. It should surprise no one that financial lobbyists are flocking to DC this week. Of course, the big players who can afford lobbyists work the regulations in their favor, while their smaller competitors are left out in the cold. The result here are regulations that institutionalize the “too big to fail” mentality.

Moreover, the financial reform bill gives regulators the power to pick winners and losers, institutionalizing their ability to decide “which firms to rescue or close, and which creditors to reward and how.” Does anyone doubt that firms with the most lobbyists and the biggest campaign donations will be the ones who get seats in the lifeboat? The president is trying to convince us that he’s taking on the Wall Street “fat cats,” but firms like Goldman Sachs are happy with federal regulation because, as one of their lobbyists recently stated, “We partner with regulators.”

They seem to have a nice relationship with the White House too. Goldman showered nearly a million dollars in campaign contributions on candidate Obama. In fact, J.P. Freire notes that President Obama received about seven times more money from Goldman than President Bush received from Enron. Of course, it’s not just the donations; it’s the revolving door. You’ll find the name Goldman Sachs on many an Obama administration résumé, including Rahm Emanuel’s and Tim Geithner’s chief of staff’s. …

Commonsense conservatives acknowledge the need for financial reform and believe that government can play an appropriate role in leveling the playing field and protecting “the dynamism of American capitalism without neglecting the government’s responsibility to protect the American public.” We’re listening closely to the reform discussion in Washington, and we know that government should not burden the market with unnecessary bureaucracy and distorted incentives, nor make a dangerous “too-big-to-fail” mentality the law of the land.

Large firms like Goldman Sachs usually back regulation for a couple of rational reasons.  Regulation tends to favor the status quo, and since they already occupy a large position in the industry, Goldman Sachs would prefer to see that position institutionalized.  Because of their size, the compliance costs don’t impact them as much as they do with smaller competitors, making the smaller companies less of a threat.  Mostly, though, the large players usually get deeply involved in supporting the politicians in both parties that write the regulations, and that usually means the regulations wind up working for them than against them.

That’s the kind of crony capitalism about which Palin warns in her essay, and she saw it first hand in Alaska.  It creates firms that become “too big to fail,” not necessarily for economic reasons but for political reasons.  Excessively regulating industries to promote the interests of its largest players helps make those firms so large that their collapses would create outsized effects on the American economy.

In other words, if you want to end “too big to fail,” getting the endorsement of Goldman Sachs on regulatory changes is probably a counterindication rather than a good sign.

That isn’t to say that some regulatory changes shouldn’t be made.  The derivatives market went largely unsupervised in the years preceding the collapse, for instance, and better oversight is needed on that segment.  However, that was a secondary problem in the financial meltdown. The primary problem was the government intervention in the lending markets that created an irrational bubble in housing — driven by regulation that attempted to expand home ownership by indemnifying lenders against losses on marginal home loans.  That was also crony capitalism, making lenders big financial players and giving firms like Goldman Sachs opportunities to make billions on the junk bonds produced by the process.

We need rational and limited government oversight to ensure that investors don’t get defrauded out of their money.  What we don’t need is the continuation of government picking winners and losers in markets, if for no other reason than because the 2008 collapse showed just how bad it is at making those choices.


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That may be the single lamest thing I have ever read.

FlickeringFlame on April 23, 2010 at 6:11 PM

You need to read some of your own posts. They are much, much lamer.

portlandon on April 23, 2010 at 6:24 PM

This is one of those cases when somebody tries to be sarcastic and ends up simply telling the truth instead.

FlickeringFlame on April 23, 2010 at 3:50 PM

Of course! I’m not intelligent enough to have a sense of humor. I’m a Palin supporter after all and therefore don’t have the mental brainpower of a super genius such as yourself.

Thank goodness you’re around to remind us of how awesome your mind is and how dumb we are. The “I need an elitist know-it-all to put me in my place” void has finally been filled.

powerpro on April 23, 2010 at 6:26 PM

I cant tell if that was a lame attempt at sarcasm or just a really lame post.

duh

FlickeringFlame on April 23, 2010 at 6:11 PM

You can apply this to everything I’ve seen from you here.
You are, by your own logic let’s not forget, stupid/mentally defective because we have a difference of opinion.

Brian1972 on April 23, 2010 at 6:27 PM

PS: GO FLAMES!!

FlickeringFlame on April 23, 2010 at 6:21 PM

Those poor little boys.
Do they really have to wear jerseys when they play soccer with this lame name on it (complete with a cartoon of a fire) or is it just unwillingness to confess to your Pink Floyd obsession as manifested in your HA screen names?

Jenfidel on April 23, 2010 at 6:33 PM

Jenfidel on April 23, 2010 at 6:33 PM

Whereas you merely tout your being a member of MENSA (more likely MENCAP).

lexhamfox on April 23, 2010 at 6:35 PM

Ugh. Why is it everybody keeps up with this “Sarah Palin is a dumba$$!” crap and Mitt “Mittens” Romney is a sellout. Who cares. The truth is that probably neither one of them will get the nomination. It will probably go to Mitch Daniels or something. Obama will win reelection due to the minority and liberal vote. Bill Clinton’s poll numbers were low at this point in his presidency, and he beat Bob Dole handily.
What we really need to do is focus on Congress. By winning a vast amount in the House in 2010 and hopefully adding to that in 2012 (that’s going to be harder to do since it’s a presidential election year), conservatives can block Obama’s most liberal legislation. They will also, in my opinion, pick up at least two more seats in the Senate (Ben Nelson’s and Mary Landrieu’s).
I think everyone should stop worrying about Romney and Palin and just let them do their thing. Neither one of them may even run, but they’ll have the power to endorse.

NathanG on April 23, 2010 at 6:46 PM

Whereas you merely tout your being a member of MENSA (more likely MENCAP).

lexhamfox on April 23, 2010 at 6:35 PM

Huh?

Word of advice…when you’re trying to slam someone, at least try to be coherent.

powerpro on April 23, 2010 at 6:47 PM

lexhamfox on April 23, 2010 at 6:35 PM

I didn’t really “tout it,” he asserted that anyone who supported Governor Palin had a sub-par IQ.
I proved him wrong with the Mensa thing.
What’s “Mencap?”

Jenfidel on April 23, 2010 at 6:53 PM

I proved him wrong with the Mensa thing.
What’s “Mencap?”

Jenfidel on April 23, 2010 at 6:53 PM

It’s a group of adult men, who get together and exchange bottlecaps.

portlandon on April 23, 2010 at 7:14 PM

It’s a group of adult men, who get together and exchange bottlecaps.

portlandon on April 23, 2010 at 7:14 PM

No, hon!
It’s a club where they exchange Gimme caps! LOL
Flamer’s the President, theGooSite’s Parliamentarian and lexham’s the recording secretary.

Jenfidel on April 23, 2010 at 7:19 PM

GO FLICKS!!!

FlickeringFlame on April 23, 2010 at 8:01 PM

Regarding where Romney has been. He has been giving speeches, leading republican polls,

FlickeringFlame on April 23, 2010 at 4:55 PM

Like Giuliani was doing for a while.

ddrintn on April 23, 2010 at 8:33 PM

touring his book which is a well-thought out book on foreign and domestic policy

FlickeringFlame on April 23, 2010 at 4:55 PM

Give us some of your favorite quotes from it.

ddrintn on April 23, 2010 at 8:38 PM

Flamer -

Whatever Mitt wrote in his book he will flip flop on at least three times before the 2012 primaries (depending on how the wind is blowing..

By the way, Mitten’s book, which has been out six weeks, is #812 at Amazon.com. Palin’s book, which has been out for six months and sold more than 2.5 million copies, is #358.

bw222 on April 23, 2010 at 9:04 PM

Ugh. Why is it everybody keeps up with this “Sarah Palin is a dumba$$!” crap and Mitt “Mittens” Romney is a sellout. Who cares. The truth is that probably neither one of them will get the nomination. It will probably go to Mitch Daniels or something. Obama will win reelection due to the minority and liberal vote. Bill Clinton’s poll numbers were low at this point in his presidency, and he beat Bob Dole handily.

NathanG on April 23, 2010 at 6:46 PM

You have got to be kidding me. This isn’t a computer game, where the rules are fixed. I already have money on Barry losing 2012 by more than 4%. The past is no predictor of the future, especially when comparing a personally popular scamp like Clinton to a corrupt puppet like Barry.

Vashta.Nerada on April 23, 2010 at 9:12 PM

You have got to be kidding me. This isn’t a computer game, where the rules are fixed. I already have money on Barry losing 2012 by more than 4%. The past is no predictor of the future, especially when comparing a personally popular scamp like Clinton to a corrupt puppet like Barry.

Vashta.Nerada on April 23, 2010 at 9:12 PM

Whatever you say Vashta. We’ll see who’s right in 2012. Another example of low poll numbers is Reagan. He went on to win every state/district with the exception of Minnesota and D.C. Yes, he is different. Yes, history isn’t necessarily a correlation, and yes, the electorate has changed. But, that change has meant more minority voters, as in Hispanics, who vote 60 something percent Democrat, not to mention the fact that blacks will enthusiastically vote for Obama. Then you add the Dems. I think the election will be close, but he will probably win by 3 or 4 points, much like Bush did basically. The margin will just be smaller than the seven points he won by in 2008.

NathanG on April 23, 2010 at 9:47 PM

NathanG on April 23, 2010 at 9:47 PM

Barack’s losing Indies by the boatload every day and then some and he can’t get re-elected without them.
Black people+Hispandex who are legal enough to vote+Hard-core Left Liberals≠4 more years

Jenfidel on April 23, 2010 at 10:06 PM

Another example of low poll numbers is Reagan. He went on to win every state/district with the exception of Minnesota and D.C.

NathanG on April 23, 2010 at 9:47 PM

Um, bad comparison. There was an economic boom before the ’84 election due to pro-growth policies. I don’t see a boom occuring before ’12. I’d like to be wrong about that, but I don’t see it. Obama’s much more of a rigid leftist ideologue than Clinton ever was, as well.

ddrintn on April 23, 2010 at 10:18 PM

This silly little girl from Alaska has just hit the nail on the proverbial head with a huge hammer. Now I just gotta tell you how many of us wish this silly little girl were Pres rather than that big eared dummy socialist we ended up having for Pres.

Herb on April 24, 2010 at 9:02 AM

Um, bad comparison. There was an economic boom before the ‘84 election due to pro-growth policies. I don’t see a boom occuring before ‘12. I’d like to be wrong about that, but I don’t see it. Obama’s much more of a rigid leftist ideologue than Clinton ever was, as well.

ddrintn on April 23, 2010 at 10:18 PM

You’ve got a point there. I’ve just got this feeling that Obama will win re-election. He does have the incumbency on his side. I completely agree that he much more of a leftist idealogue than Clinton, but I’m just going with a gut feeling. I don’t see a big economic boom either. I do see, however, a fifty-fifty chance of him winning. I’m still not convinced he won’t win reelection. You also have to take into account that if Congress is Republican, people will want that balance of power. I don’t know. I feel like independents think about things like that because they aren’t rigid idealogues themselves.

NathanG on April 24, 2010 at 10:31 PM

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