Thursday, January 14, 2010

John Stossel on Crony Capitalism

Tonight’s John Stossel program was on “Crony Capitalism”, also known as “Fascism”. I didn’t sleep well last night, it was a long day at work, so I’m just going to type as it plays.

Stossel started off by highlighting a company called Serious Materials, and the cozy relationship they have with Obama and Biden. Biden wandered through the plant a few times, looking exactly like Ted Knight from the Mary Tyler Moore Show, and said some good things about the company's obvious politically correct virtue level.

Obama gave Serious Materials a shout-out during a speech on the economy. Then the dynamic duo announced some tax credits for “green companies”. Only one window company was given their tax money back – Serious Materials.
Then Stossel showed the Company VP of Policy, hanging out with energy leaders in the Obama administration….and then he showed Cathy Zoi, who is in charge of Obama’s weatherization policy, talking about how they were going to have SWAT teams move in and weatherize entire neighborhoods with new storm windows, paid for by stimulus dollars.

Stossel eventually revealed that Serious Materials’ VP of Policy is married to Cathy Zoi. Well, shit. That takes some of the down-home, wholesome, green environmental goodness out of the equation, doesn’t it? Weren’t you happier not knowing this?

He brought on some panelists, Annette Meeks and Jonathan Blake, from the Freedom Foundation Of Minnesota. These two are familiar with the window industry, and knew that it was going through hard times. They started wondering why so much attention was being paid in the Mainstream Media, the Teleprompter Jesus Press Conferences, and press releases to one little ol’ window manufacturer. Then they found out that Cathy Zoe controls 16.8 billion stimulus dollars. That’s $16,800,000,000.00, if you like to see zeroes.

How in the heck did one window manufacturer happen to win this sweepstakes? Did it have anything to do with contributing thousands and thousands of dollars to the Obama campaign? And some other connections having nothing to do with their entitlement to your money?

(My biggest problem with Serious Materials is the little environmental savings counter on their website. You can see how many thousand pounds of carbon they’ve saved, how much energy they've saved, etc. I’ve saved far more carbon than that. So have Somali shepherds. How do we do it? By not manufacturing windows. Who and what exactly are they measuring against?)

The next guest was Denis Calabrese, who explained that Congress spends its day listening to lobbyists and donors, not debating the merits of specific proposals. They pick winners and losers, and the losers (at all the other window companies) don’t get the subsidies, the tax breaks, and the breaks on quotas. Tim Carney, author of “The Big Rip-off”, explained why Big Government just LOVES some Big Government. Why? Because the more a business is regulated, the harder it is for new competitors to enter a market. Carney gave example after example.

(This is why all sorts of lobbyists from Big Pharma and the insurance industry are showing up at Martha Coakley’s fund-raising banquets, BTW.) Both sides are cozying up to each other to stay in power.

THEN STOSSEL COVERED THE BUTTER VS. MARGARINE CONTROVERSY ! (It’s been one of my favorites for a long time.) The Butter industry was terrified of the margarine industry. They got Congress to pass legislation requiring margarine to be dyed PINK. Swear to God, it happened.

THEN HE HIT ANOTHER ONE OF MY FAVORITES. Go to Google, and put in the phrase “Guess who helped write the new tobacco bill”. I’ll be there. Typing fast as I can. No time for links. The alleged consumer protection in this bill was nothing but an industry protection bill. Philip Morris stock rose 35% immediately after Obama signed the bill.

THEN HE WENT OFF ABOUT BUILDING JETS AT BOEING AND LOCKHEED FACTORIES, jets we don’t need, jets that the military doesn’t want, simply to “protect jobs”.

Calabrese challenged Stossel to identify a single aspect of our so-called free enterprise system where our government wasn’t picking the winners and losers. Bill Gates and Company did very little lobbying until he got hauled into Congress for monopolistic practices. Then he hired a huge lobbying operation, and decided to spend a lot more time in Washington. His difficulties have ceased.

Then the focus switched to toys. Government, of course, had to get involved For The Children. They wrote a slew of regulations for testing that no small toymaker could ever afford. They regulated the sale of used toys, which meant that the toy resale industry was eliminated. (Don’t you know that Mattel and Hasbro partied hard when that regulation went into effect?) Goowill had to stop accepting used baby beds, strollers, play pens. They might not have been tested properly.

Anne Northrup, one of 5 commissioners on the Consumer Products Safety Commission, was brought out to explain how the process works. She evaluated a simple wooden locomotive, and immediately identified 5 or 6 tests that would have to be performed before it could be sold. She was surprisingly sympathetic to the plight of the small toy and resale industries and made some appropriate sounds. (Note to Mom: The Consumer Products Safety Commission has come out with a book of advice for people wanting to hold garage sales. Since the law is retroactive, it condemned a lot of products that were declared “safe” when they were manufactured. The handbook recommends scanning all items with an X-Ray Fluorescence machine. Swear to God, it says it. The machines cost $30,000.00)

Northrup went on to say that the Consumer Products Safety Commission isn’t going to send an inspector out to check your garage sale. (But guess what? This creates a chilling effect that makes you hesitate to sell and old item, or to purchase one. It IS illegal to sell this stuff. Check out a book called “Three Felonies A Day” when you get a chance. Chances are, you’re committing a large number of crimes without even knowing it. They’re not going to prosecute you unless they need to.)

The next segment was about the bad rap that capitalism has gotten during the last two years. Michael Moore’s movie came in for appropriate levels of abuse.


I love that guy. Russ Roberts is on Stossel. This is freakin’ great. Roberts explains that Capitalism requires prudence. And if you take out the potential for any kind of loss, you’re left with “socialism for the rich”. The taxpayers have to cover the losses. It’s almost always an after-the-fact bailout. Roberts went on to say that there was absolutely no evidence for a potential disaster if we didn’t bail out, Wall-Street or GM, or any other entity.

Marta Mossburg (spelling corrected on 1-16-10, see comment from Mr. MossBURG, below) of the Franklin Center, explained that most D.C. lobbyists have worked on Capitol Hill. If the tax code was only 10 pages long, instead of tens of thousands of pages long, the lobbyists wouldn’t be necessary. But then, Congress wouldn’t be able to sell tax indulgences in exchange for donations.

Lehmann Brothers wasn’t politically connected. They didn’t spend much on lobbying. They were allowed to go under. The others? They were too big to fail.

Russ Roberts – “Let’s let people fend for themselves. It’s called Capitalism. Why don’t we try it.”
I kind of miss the audience involvement. Yes, it was all hostile questions. Yes, many of the people asking the hostile questions were doofuses. But then, how many of the people who hold those Statist opinions….. never mind.

Stossel closed the program with a monologue about the Constitution and the Declaration Of Independence. They’re paper-thin. Then he showed a 3-foot tall stack of regulations about toy safety and manufacturing.

Stossel explained why Big Steel lobbied Washington/G.W. Bush to keep cheap foreign steel out of the U.S., and how they succeeded. Then he explained how this played hell with manufacturers who used steel. Plus, YOU had to pay more for anything made with the more expensive U.S. steel. But then, you don’t have a lobbyist.

If you made it this far, I’m amazed. Going to bed now. Good night. Remember to set your Tivo to record Stossel every week. There’s nothing else like it on television.


David said...

Marta Mossburg is spelled with a "burg" not "berg"

Her husband,
David Mossburg

Great blog!

Fester said...

If you like Russ Roberts,recommend the econ talk podcast. It is a little statist for me most weeks, and sometimes his guests are a tad boring, but damn if you listen to this for a couple of years you will feel like you have a much deeper understanding of the complexities involved in the economy and he covers a lot of topics.

Browncoat Libertarian said...

I was jazzed about this episode, just watched it Saturday night. Just earlier in the day, I was discussing corporatism/crony capitalism/fascism with a friend on the train back from the Stars game (3-2 Stars over the Red Wings in a shootout), so watching this episode provided me with validation, a good healthy grin, then a not-so-healthy depression based on the fact that Stossel is probably just preaching to the choir now that he's on FOX Bidness channel.

Anonymous said...

Not true after all?
Company put out some data on this:

White Label SEO Reseller said...

It would have been nice if the person that dropped the link to the data, introduced himself, or even posted a link hinting to who he is.

rascal said...

all I have to say is Dick Cheney, Halliburton and Bechtel. At least Serios Materials didn't start a war so they could profiteer off of $35.00 hot dogs.