Hey Elizabeth Warren, Crony Socialism, Not Crony Capitalism, Is The Problem

Sen. Elizabeth Warren

by Ralph Benko, Contributing Author: A Progressive axiom, made central by Sen. Warren, is that “Many feel that the game is rigged against them, and they are right. The game is rigged against them.” This theme is echoed by Sen. Sanders and, slightly paraphrased, by Secretary Clinton.

Their alleged perp? “Crony capitalism.” Warren:“Republicans claim loudly and repeatedly that they support competitive markets, but their approach to financial regulation is pure crony capitalism that helps the rich and the powerful protect and expand their power and leaves everyone else behind.”That’s a frame-up. Don’t fall for it.

Progressives, as I previously observed, have their own cunning and powerful way to “rig the game.” They engage in “a framing war.” Climate change activist George Marshall succinctly described this shrewd tactic:“If you can get out there and you can get your language inserted into the discourse, it’s your ideas that dominate.”“Crony” is being used as a way to “frame” capitalism. It’s an intended slur.
Many well-meaning, vulnerable, conservatives have been lured into this trap. Don’t fall for it.

Last month, when I was at a meeting on Capitol Hill, a fairly senior aide to a very conservative Member of Congress trotted the phrase “Crony Capitalism” out as something to be against. The aide used as an illustration the lavish contracts provided by various federal agencies to big government contractors.

I pointed out that this was not Crony Capitalism. Lavish government contracting, which tends to give lip service — but not substance — to competitive bids, is perfectly antithetical to capitalism.

It’s Crony Socialism.

The New Oxford American Dictionary defines capitalism (a term coined by its detractors but … so was Yankee Doodle), as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.”

It defines socialism as “a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.” In practice, “the community as a whole” means, and is represented by, a government agency.

To round out the discussion, it defines a crony as “a close friend or companion.” Synonyms:“friend, companion, bosom friend, intimate, confidant, confidante, familiar, associate, accomplice, comrade; informal pal, chum, sidekick, partner in crime, buddy, amigo, compadre, mate, dawg; archaic compeer; (cronies) informal peeps.”“Crony” has a derogatory overtone. “Friend” puts it into a different light.

As it happens it is human nature to hire a friend if qualified for the job and she desires the position. A stranger often looks great on paper yet even with good references easily can turn out to be a bad fit for the position or an under-performer. Or worse. (If you don’t think so you’ve forgotten the time you spent on OKCupid.com.)

Also, with friends you often have social as well as business leverage to enhance performance. When you have known someone over many years you typically are able to make a much better assessment of her competence and character than one can a stranger. Moreover, there are innumerable intangible factors that are material to people’s teamwork and productivity. These often are invisible on paper and only emerge in relationship.

A Fortune 500 company may have the budget to put job candidates through a battery of tests and a deep background check. Most of us do not. And it’s not even clear that a technocratic approach is better than the human touch.

The term “crony” has, according to Merriam-Webster, developed a pejorative connotation, “a friend of someone powerful (such as a politician) who is unfairly given special treatment or favors.” While preference for friends is human nature official cronyism indeed is sinister.

So “Crony Capitalism” is a perfect piece of “framing war” ordnance deployed by the left. Before considering how badly Progressives have paved paradise to put up a parking lot consider The Case for Corruption, as stated by Jonathan Rauch in The Atlantic Monthly:How often backroom deal making will work in today’s age of hyper-partisanship remains to be seen, but Congress’s recourse to it represents a welcome rediscovery of a home truth. Politics needs good leaders, but it needs good followers even more, and they don’t come cheap. Loyalty gets you only so far, and ideology is divisive. Political machines need to exist, and they need to work. No one understood this better than the street-smart political sage George Washington Plunkitt, who articulated the concept of honest graft.Rauch is right.[H]onest graft helps knit together a patronage network that ensures leaders can lead and followers will follow. Reformers who failed to understand this crucial distinction, Plunkitt said, courted anarchy. “First,” he reasoned, “this great and glorious country was built up by political parties; second, parties can’t hold together if their workers don’t get the offices when they win; third, if the parties go to pieces, the government they built up must go to pieces, too; fourth, then there’ll be h— to pay.”The institution of career civil service system for government agencies was founded as a progressive instrument to fight, well, political cronyism. It was presented as replacing political cronyism with a merit system. All it did, Surprise!, was to transfer the patronage to … Progressives.

Federal agencies now have devolved into a hotbed of … Progressive, i.e. Socialist, cronyism. Hiring and promotions within the civil service used to be based on what was termed the “Merit System:”The United States civil service began to run on the spoils system in 1829 when Andrew Jackson became president.The assassination of United States President James A. Garfield by a disappointed office seeker in 1881 proved its dangers. Two years later, the system of appointments to the United States federal bureaucracy was revamped by the Pendleton Civil Service Reform Act, which made the merit system common practice.The “merit system,” if it ever existed, no longer remotely reflects reality. There are few cronier rackets than that of getting a job with a federal agency, whether career civil service or a political appointment. The federal government is beset by patronage Progressives … Crony Socialism … at the bedrock, personnel, level. The problem compounds from there.

The “revolving door” between Congress and K Street is as nothing compared to post-government careers by executive department officials, including career officials, inside Corporate America. There, these former officials capably steer Big Business through a thicket of red tape so dense as to weed out any small or medium size business. Government veterans steer the Big Corporations into the land of $800 toilet seats, $345 hammers and $7,000 coffee pots and, more recently, $17,000 drip pans. We taxpayers get stuck with the tab.

As an aside, if Progressives really wished to invert the power curve between Congress and K Street — rather than advancing the veiled Progressive agenda of enhancing their own power and position at the expense of that of the voters — they would be demanding that we pay our Members of Congress and their staff well. Like $1 million a year well for Members, higher for committee chairs and leadership, and significant six figure salaries for senior staff. Plus benefits.

Lobbyists under such circumstances would strive for a job in the Congress. This would benefit the common good. Singapore routinely paid its senior government officials a million dollars (US) a year or more. The people of Singapore got and kept the best and the brightest in public service.

The next time you hear someone indicting “Crony Capitalism” know it for what it is. “Crony” is a calculated slur on capitalism, planted by Progressives such as Elizabeth Warren and Bernie Sanders as a camouflaged booby trap against conservatives and Republicans. It is part of a larger power grab by the left.

Don’t fall for it. It’s a frame job. Crony Socialism, not Crony Capitalism, is the real problem.
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Ralph Benko is senior advisor, economics, to American Principles in Action’s Gold Standard 2012 Initiative, and a contributor to he ARRA News Service. Founder of The Prosperity Caucus, he was a member of the Jack Kemp supply-side team, served in an unrelated area as a deputy general counsel in the Reagan White House. The article which first appeared in Forbes was submitted for reprint by the author.

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