This is crony capitalism on steroids.
Crony capitalism, simply defined, is when government officials favor friends (cronies) over others; or when the rich and powerful use their wealth and influence to gain access to governmental officials and opportunities that are not available to the average citizen. In 1832 President Andrew Jackson struck down a crony cabal that controlled the Second Bank of the United States. When he killed the American central bank, Jackson terminated a remarkably unethical arrangement, approved by Congress, that gave state-chartered banks rights superior to those of ordinary citizens and exempted the Bank’s foreign shareholders from taxes.
.. Past and current corporate and financial titans such as J.P. Morgan, Andrew Carnegie, John D. Rockefeller, Warren Buffett, and Jeff Bezos provide leading examples of crony capitalism—men who used personal relationships with politicians to enrich themselves and their businesses. The decidedly liberal Buffett, for example, reared as the son of a decidedly conservative congressman from Omaha, grew up in Washington’s Fairfax Hotel, where he learned firsthand how to work the political world to gain advantages in business.
.. Many states sharply limited banks and actually required “double liability” for bank shareholders, meaning if the bank faced financial trouble its shareholders would have to match the par value of their investment with new cash. Owning a bank was a privilege and a grave responsibility to the community.
.. When banks began to convert to stock corporations, notes researcher and former Federal Reserve counsel Walker Todd, risk-taking behavior among bank officials changed dramatically; they took on more and more risk—and the public eventually was forced to bail them out in times of financial panic.
.. Prior to 1970, the Wall Street partnership structure ensured that bankers had plenty of skin in the game—essentially their full net worth was on the line every day. Requiring that Wall Street’s top executives, bankers, and traders again have a significant portion of their wealth at risk would provide much-needed accountability and reinforce the soundness and safety of the financial system. It would also unleash the power of the U.S. economy.
.. Many of these large banks have low or negative risk-adjusted returns on capital, compared with small banks—what might be called Main Street banks, lacking access to Washington pooh-bahs—that tend to be more cautious, more profitable, and more stable in terms of equity returns.
.. The most stable and consistently profitable U.S. banks are the super community banks that are important lenders to Main Street. They range between $1 and $10 billion in assets, and are the least benefited by crony capitalism.
Opinion Journal: The Trumpian Pope
They’re both pretty good at the insult and name calling.
The pope talks about Catholic Moms breeding like rabbits. Anyone who disagrees with him can’t be honest, must be disturbed.
They share a debilitating view of trade. The Pope has a flat materialist view of capital and sees it as exploitive Yankee Imperialism. Doesn’t see Capitalism has helping unlock people’s potential.
Trump see trade as a zero sum game. The Mexicans have just as much right to find their place in a global economy.
Trump needs to see people as valuable assets.
Where is the Pope on the tragedy of Venezuela? He doesn’t distinguish between crony capitalism of Latin America and Singapore.
Why Corporations Are Helping Donald Trump Lie About Jobs
Masayoshi Son, wants the Department of Justice’s antitrust division and the Federal Communications Commission to allow a merger between Sprint and T-Mobile. In 2014 regulators appointed by President Obama made clear to Mr. Son that they would not approve such a transaction because it would cut the number of national wireless companies to three, from four, greatly reducing competition in a concentrated industry. Mr. Son sees a new opening for his deal in Mr. Trump, who has surrounded himself with people who have sided with large telecommunications companies in regulatory debates and have argued against tough antitrust enforcement.
.. This is crony capitalism, with potentially devastating consequences. If Mr. Trump appoints people to the antitrust division and the F.C.C. who are willing to wave through a Sprint/T-Mobile merger, he will do lasting damage to the economy that far outweighs any benefit from 5,000 jobs, jobs that might have been created even without the merger. Individuals and businesses will find wireless service costs a lot more when they have only Verizon, AT&T and T-Mobile/Sprint to choose from.
In addition, a combined Sprint and T-Mobile would inevitably cut thousands of jobs as executives merge the companies’ networks, stores, billing systems, customer service departments and so on.
.. It has become abundantly clear that Mr. Trump is easily distracted by shiny objects, especially if they reflect back on him. He’s more interested in boasting about how he personally saved a thousand jobs at Carrier, say, than in policy details that could make a difference in the lives of tens of millions of workers. Never mind that Carrier is only keeping about 800 jobs and that its chief executive said that the company would get rid of some of those anyway through automation.