Tag: crony capitalism

Progress, DC-Style

gentrification, renewall, Washington D.C., corruption, crony capitalism, housing, dirigisme

Is the black, Democratic mayor of Washington, D.C., actually a “racist”? What about the city council, which is 46 percent African-American, 85 percent Democrat, and 100 percent liberal/progressive?

That’s what a lawsuit argues — the DC ‘powers that be’ are racist in their development and housing policies. Filed on behalf of several African-American DC residents, it alleges that Mayor Muriel Bowser and the council have been striving mightily, as the Washington Post reported, “to ‘lighten’ African American neighborhoods and break up long-established communities.”

“Every city planning agency,” states the complaint, “. . . conspired to make D.C. very welcoming for preferred residents and sought to displace residents inimical to the creative economy.”

Nothing that a billion dollars couldn’t make right, of course — for which the plaintiffs ask.

But is gentrification a crime?

As American University professor Derek Hyra told the Post, “Developers want to maximize their return. This is not a conspiracy. This is capitalism.”

But no, this certainly isn’t laissez faire “capitalism.” It could be described as dirigisme — or “state capitalism” or “crony capitalism” or just a bad old-fashioned mercantilism, revised to work at the city level, where governments partner up with particular groups to extract as much wealth for the insiders as they can. Professor Hyra acknowledges that Bowser and the council were “providing subsidies” to bring in richer citizens and push out poorer ones.

Most importantly, we discover yet again that the power politicians claim they need to help the poor, is used to help the rich.

Way to go, “progressives.”

This is Common Sense. I’m Paul Jacob.

Note: The mayor is a Democrat and the 13-member council is composed of eleven (11) Democrats and two (2) independents. There are no Republicans.

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Tags corruption, crony capitalism, dirigisme, gentrification, housing, renewall, Washington D.C.

Accountability free trade & free markets general freedom government transparency moral hazard national politics & policies porkbarrel politics too much government

Georgia on My Dime

pig, pigliets, crony capitalism, Delta, NRA

After the recent school shooting in Parkland, Florida, followed by pressure from gun control advocates, Delta Airlines announced it would end its corporate relationship with the National Rifle Association, whereby NRA members were given discounts on travel.*

Meanwhile, Georgia legislators were in the process of passing legislation to give Delta a state sales tax break on their fuel purchases. That special legislative deal was worth a whopping $40 million to the Atlanta-based company.

Yet, when Lt. Gov. Casey Cagle heard about Delta dissing the NRA, he tweeted, “I will kill any tax legislation that benefits @Delta unless the company changes its position and fully reinstates its relationship with @NRA.”

The Lt. Gov. added, “Corporations cannot attack conservatives and expect us not to fight back.”

Everyone is familiar with the story. Those who favor gun rights were angry with Delta Airlines and ecstatic with the pushback from Georgia legislators. Those favoring new legislation to restrict gun ownership were thrilled by Delta’s break with the NRA and livid with those legislators.

But while cheering and jeering one side or the other, too many folks missed the 800-lb problem in the room. A letter writer to the Washington Post illuminated it: “The government can’t punish people or businesses for their political views. They can be punished only by the free market, in the form of lost business.”

True enough in the free market.

But when crony capitalism replaces free markets, the government certainly will punish or reward people and businesses — with millions and billions of our tax dollars — on purely political grounds.

Georgia government just did it to Delta Airlines.

This is Common Sense. I’m Paul Jacob.

* To be precise, reports claim a grand total of 13 NRA members availed themselves to the special rates once offered by Delta.

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Tags crony capitalism, Delta, NRA, pig, pigliets

Accountability folly free trade & free markets local leaders moral hazard nannyism porkbarrel politics responsibility too much government

Small Target, Big Subsidy

Denver, incentive, California, development, rent, graft, corruption

Something has gone wrong when, to get a tenant to move into an empty space in your prime-location building, you need a $4 million subsidy.

And when I say “prime location,” I’m not engaging in Trumpian over-statement. The downtown Denver, Colorado, property location sees over 35,000 pedestrians per day . . . and that’s with the primo slot empty.

But to get that slot filled, the owners have negotiated with the city government to nab a $2 million “incentive” to fix the place up for Target, which is thinking of leasing the location to put up a smaller-than-usual “flexible-format” store. Oh, and another $2 million for “operational” costs, which seems to be some kind of a loan to be paid back from taxes to be collected — and shared by the city for 20 years with the owners.

In other words, it’s the darnedest business deal you’ll ever see (and never get): up-front money not from a bank or investors, but from Denver’s city government “BIF” — Business Investment Fund — which is obviously part of a convoluted scheme fed by taxes and devised by . . . people I wouldn’t trust with my money.

Structuring deals like this is how modern cronies — er, cities — operate, I know. Am I alone in judging it corrupt on the surface and corrupting in the details?

If prime commercial property has gone unused for about a decade — as this three-storied mall space has — I’d think that maybe the owners have set the rents too high or the city has been a bit too greedy with taxes.

Or both.

This is Common Sense. I’m Paul Jacob.

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Tags corruption, crony capitalism, cronyism, Denver, development, graft, incentive, rent

folly free trade & free markets general freedom moral hazard national politics & policies tax policy too much government

Whose Side Are They On?

Uber, Lyft, Taxi, protection, tax, crony, cronyism, illustration

Excuse me if I drive over familiar roadways. But we are witnessing one of the great revolutions in human cooperation.

And our governments and politicians are working mightily to block traffic.

I refer, of course, to Uber and Lyft and the like.

The innovation that these companies bring to market? Enabling everyday drivers to leverage their personal investment in a capital good — a car or SUV — to make extra bucks (or even a living) while efficiently serving people who want rides.

Ride-hailing apps on smart-phones provide more security and consumer guidance than the old taxi services ever bothered to even try. The elaborate online rating system, where drivers rate riders and vice versa, provides a new market in information that outstrips government “regulation” as a consumer defense system.

And consumers get better rides, cheaper.

The Uberization of ride sharing competes directly with taxis, of course, and that’s a problem . . . for taxi companies. And the politicians who have regulated them for years. This regulation never was about consumer protection, but politicians just feathered their own nests with campaign contributions through crony capitalism, helping some taxi services at the expense of others.

And customers.

The latest idiocy hails from Massachusetts, which has enacted a 20¢ per trip tax on all ride-sharing apps, with 5¢ of each charge slated for subsidizing the old, established taxi services.

Taxachusetts’s Republican governor, Charlie Baker, has been sucked in to the government racket, choosing to support old cronies rather than customers.

Still, it could have been worse. The advocates of the tax had initially demanded Uber be banned.

This is Common Sense. I’m Paul Jacob.

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Illustration based on original cc photo by GörlitzPhotography on Flickr

Tags crony capitalism, Lyft, tax, tax policy, taxi, taxicab, taxicabs, Uber

Accountability Common Sense folly free trade & free markets general freedom meme

Progressive Logic

Government is so corrupt that its power to intervene in the market can be bought and sold by the rich…

…Therefore government should be bigger and more powerful.

Click here for a large resolution version of this image:

Tags big government, corruption, crony capitalism, government failure, intervention, Progressive Logic

moral hazard subsidy

For Some Reason

Yesterday, the House voted to extend the legal ability for the Export-Import Bank to run . . . for another nine months. The people’s legislature passed the “stop-gap” measure, 319-108, with both bipartisan support and bipartisan opposition.

Just last month, President Obama expressed dismay that Republicans would be against it.

“For some reason,” he intoned, “right now the House Republicans have decided that we shouldn’t do this. . . .” He pretended to incredulity and puzzlement. He gave the usual reasoning for the subsidized financial guarantees, and insisted that “every country does this.”

“When,” he asked, “did that become something that Republicans opposed?”

Obama could’ve asked all those members of his own party who opposed it.

But then, he could have asked himself. Back in 2008, he very clearly put the Ex-Im Bank on the theoretical chopping block. Candidate Obama gave the big business bank up as a program that “didn’t work” and one that had become “little more than a fund for corporate welfare.”

So why the change of mind, Mr. Obama?

Has the Ex-Im ceased being a fund for corporate welfare?

No. It’s still there, propping up big businesses doing business abroad — indeed, multinationals abroad, the kind of companies that Obama’s Occupier friends despise so deeply.

What has changed? He’s in power, now. And that power derives from the mighty federal purse, filled by taxing hundreds of millions of Americans, and used to give hundreds of millions and billions in benefits to the few, the insiders.

President Obama and the congressional leadership of both parties are tighter than ever with special interests.

This is Common Sense. I’m Paul Jacob.