The views expressed in any article published in this blog are the author's own and do not necessarily reflect the views of Joseph Foster or Bob Lupoli.

Tuesday, January 24, 2012

Crony Capitalism: David Stockman

Joe: you may recall this post directly below, from last year. I am remembering because I just was looking at the David Stockman interview by Bill Moyer on Mish Shedlock’s blog. Stockman is promoting the new book he is working on called, The Triumph of Crony Capitalism.

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Joe:  this is what is wrong with the country and is an excellent example of what we have been saying. This is legal cronyism. It’s a major cause of the financial disaster. These elites rotate from academia, to government regulatory bodies, then to industry for the big pay-off and then back again. This is why those that regulate the financial industry actually worked for these same firms. Everyone needs to make a living but the integrity of the system has to have priority and clearly we don’t have that. Bureaucrats deserve much blame but there just aren’t that many career bureaucrats at the top level to preserve and protect the system as long as it is legal to rotate out. I agree with Hilzik and Andrew Schwartzman (see below) wholeheartedly. –Bob

The opinion by Stockman below confirms my theory that the chief method of “crony capitalism” is the revolving door as I described above. It is worth a good read, here is the key part of the interview, regarding this point.

MISH'S Global Economic Trend Analysis  Mike "Mish" Shedlock
Crony Capitalism and the Entitled Class of Wall Street Financiers; Bill Moyers Interviews David Stockman, Ronald Reagan's Budget Director
BILL MOYERS: The Bush administration came to the rescue of some of the county’s largest financial institutions, to the tune of 700 billion tax-payer dollars.

DAVID STOCKMAN: We elect a new government because the public said, you know, "We're scared. We want a change." And who did we get? We got Larry Summers. We got the same guy who had been one of the original architects of the policy in the 1990s, the financialization policy, the too big to fail policy.

Who else did we get? We got Geithner as Secretary of the Treasury. He had been at the Fed in New York in October 2008 bailing out everybody in sight. General Electric got bailed out. Morgan Stanley, Goldman Sachs, all of the banks got bailed out, and the architect of that bailout then becomes the Secretary of the Treasury. So it's another signal to the financial markets that nothing ever changes. The cronies of capitalism are in charge of policy.

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