It’s time for a free-market corporate social responsibility. Conservatives who rail against government hand-outs should also blast companies who seek shelter from Washington.
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The Republican attack on President Obama’s economic policy has changed subtly, but significantly, in the last three years. In 2009, he was allegedly a “socialist” and a “Marxist” who lusted for government control of the entire economy. But lately, that has given way to more nuanced charges of “crony capitalism” — of giving special, friendly treatment to certain companies and industries, or allowing powerful corporations to essentially write the laws, themselves.
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Voters despise government officials who get in bed with corporations. But what about corporations who cozy up to government? Are companies who use cronyism to grow their profit acting unethically?
The question makes some free-marketeers uneasy. After all, we not only tolerate the fierce pursuit of profit, but also we defend it against taxes and heavy-handed regulation. Milton Friedman famously said, “The social responsibility of business is to increase its profits.”
But in the age of crony capitalism, libertarians must declare that some means of pursuing profit are immoral and call on executives to reject them. This would create a positive case for capitalism — arguing that the pursuit of profit, in the context of fair and open competition, helps the whole society. The new corporate social responsibility, redefined for libertarians, must stand athwart crony corporatism yelling “stop.”
Posts tagged ‘corporatism’
Crony capitalism is another reason we need a Revolving Door Tax (RDT).
Would this be a money-making proposition, allowing an investor a piece of the upside as the companies use the power of the government to their advantage? Or would it be a money-losing proposition, because the companies whose CEOs are spending their time cultivating government relationships are doing so only as a desperate tactic because their firms are otherwise unable to compete successfully in the marketplace on the basis of the value they offer their customers?
So I spent some time running the numbers. Suppose one began this strategy at the beginning of the Obama administration, buying one share of each publicly traded company with an executive appointed by the president on February 6, 2009 to the President’s Economic Recovery Advisory Board. That would be UBS, GE, CAT, and ORCL. In the nearly two years since then (using the Monday February 7 closing prices, and using Yahoo! Finance historical price data that adjusts for splits and dividends), the gain would have been 145% — far outperforming the 52% return of the S&P 500 Index over the same period.
Suppose that later that year, you decided to buy one share of each American publicly traded company that had a top executive attend President Obama’s first state dinner at the White House, in honor of Prime Minister Singh of India. GE and CAT are on the list again, along with Honeywell, Pepsi (CEO Indra Nooyi) and Ethan Allen (ETH) CEO Farooq Kathwari.The return through day’s end February 7, 2011 would have been 46%, versus a 19% gain for the S&P 500 over the same period.
Or suppose you wanted to invest in the publicly traded companies whose executives President Obama appointed on July 7, 2010 to the President’s Export Council. Buying UPS, Boeing, Met Life, Disney, Pfizer, Dow Chemical, Ford, Verizon, United Airlines, ADM, and Xerox would have earned a 30% return over a period in which the S&P 500 gained 24%.
So far, it looks like a pretty good way of outperforming the market.
Tags: ADM, Alan Mulally, Andrew Liveris, Archer Daniels Midland, aristocracy, Bank of America, bctRYvUJKe4, Bill Ford, Bob Iger, Boeing, Brian Moynihan, Caterpillar, Charles Holliday, Chrysler, Citigroup, corporatism, crony capitalism, David Cote, Disney, Douglas Oberhelman, Dow Chemical, Ethan Allen, Farooq Kathwari, Ford, GE, General Motors, Geomagic, GM, gSgUENZ9O94, Honeywell, Ian Read, Indra Nooyi, Jack Lew, James Gorman, James McNerney, Jeff Fettig, Jeff Smisek, Jeffrey Immelt, Larry Ellison, Lowell McAdam, Met Life, Morgan Stanley, Oracle, Ozymandias, Patricia Woertz, Pepsi, Pfizer, Ping Fu, qiMaipssKt4, RDT, revolving door tax, Robert Rubin, Sergio Ermotti, SovALlOhSg8, Steven Kandarian, UBS, United Airlines, Ursula Burns, Verizon, Warren Buffett, Whirlpool, Xerox
Occupy the central banks that have printed the money in order to get around the failures of a handful of banksters. Occupy the houses of the politicians who have voted to give your money to people who are not prepared to live with the consequences of their own errors.
Crony Capitalism and Corporatism are NOT the same thing as free markets.
Free markets are voluntary.
- Hide From Google – a how-to from WIRED
- Corporatism Is Not the Free Market – “Young people coming of age in the Internet’s decentralized and wide-open market of ideas and merchandise can’t be expected to show enthusiasm for a system that protects entrenched corporations from the forces of competition. Moreover ‘the legitimacy of corporatism is eroding along with the fiscal health of governments that have relied on it.’”
- Property and Disputes Over Property – “For over a century England’s judicial system decided land disputes by ordering disputants’ legal representatives to bludgeon one another before an arena of spectating citizens. The victor won the property right for his principal. The vanquished lost his cause and, if he were unlucky, his life. People called these combats trials by battle.”
- Non-Citizen Voters in Florida – “The non-citizen voters were discovered because they said to be excused from jury service due to their lack of citizenship. The question now is whether this report is symptomatic of a larger problem in Florida, if not elsewhere, or a relatively isolated problem.”
- I earn my entire living on Craigslist. Ask Me Almost Anything
- Sister Feng Hands Out Flyers to Seek a Husband in New York
- “Frequent-Flier Tax Traps,” by Laura Sanders, WSJ, February 4, 2012 – “‘The issues surrounding frequent-flier miles are a perfect example of how complex the income-tax law can be concerning everyday transactions for virtually every American,’ says Michael Graetz, a professor at Columbia University Law School and a former top Treasury official.” (emphasis on understatement added)
- Free Carlos Miller – “It’s easy enough to claim that he was doing something to “obstruct” the police. Any allegation will do, plus they can always jazz it up with some officer safety references and put on the scared police officer face when they tell the judge about their split second decisions and how they do it for the children. But deleting his images can’t be explained. Seize him. Seize the camera. That’s one thing. Deleting the content of the camera takes the officers allegations into an entirely different arena.”
- Hammer Time Rewind: Depreciation Kills – “In most cases, car buyers get more bang for their buck (power, features, etc.), lower up-front costs, and lower depreciation costs simply by buying a used example of a less well known/accepted car.”
- “Cheap natural gas jumbles energy markets, stirs fears it could inhibit renewables” – “Can an energy source be all that bad if it scares the two most heavily subsidized sectors of the electric power generation industry?”
- Bacon Butter … and Coffee – “It was good! I’ll still stick to Coconut Oil in my coffee on most days… due to the many benefits of Coconut Oil.”
- NYC agent arrested in latest TSA theft allegation – “A Transportation Security Administration agent stole $5,000 in cash from a passenger’s jacket as he was going through security at John F. Kennedy International Airport, authorities said Thursday, the latest in a string of thefts that has embarrassed the agency.”
- “Why French Parents Are Superior,” by Pamela Druckerman, WSJ, February 4, 2012 – “The French, I found, seem to have a whole different framework for raising kids. When I asked French parents how they disciplined their children, it took them a few beats just to understand what I meant. ‘Ah, you mean how do we educate them?’ they asked.” Say what you mean and mean what you say.
photo credit: anokarina
- “Sugar May Be Bad, But Is the Alternative Worse?,” by Brandon Keim, WIRED, February 3, 2012 – “Some studies even suggest that fake sugar may cause the same problems as real sugar. … Another study of 6,184 adult Americans linked diet soda consumption with higher rates of metabolic syndrome, the umbrella term for a physiological disruption that leads to heart disease, stroke and type 2 diabetes.” Most people are best served avoiding anything containing wheat or sugar (see next link).
- Myocardial infraction – “people who follow the basic advice of the Track Your Plaque program to do such simple things as eliminate wheat, don’t indulge in junk carbohydrates, normalize vitamin D status, supplement omega-3 fatty acids, supplement iodine and correct any thyroid dysfunction . . . well, they have no heart attacks.”
- “Did Early Humans Ride the Waves to Australia?” by Matt Ridley, WSJ, February 4, 2012 – “Everybody is African in origin. Barring a smattering of genes from Neanderthals and other archaic Asian forms, all our ancestors lived in the continent of Africa until 150,000 years ago.”
- “Let’s tickle the ivories,” by David Dubal – “There is an old proverb that goes ‘Play the piano daily and stay sane.’ … Playing the piano teaches one much, especially humility.”
- Programmer 101: Teach Yourself How to Code
- Seven ideas for learning how to program – Chad Perrin
- Congressman Hurt To Discover Lobbyist Not Really His Friend
Tags: bacon, Brandon Keim, Carlos Miller, Chad Perrin, corporatism, crony capitalism, David Dubal, frequent flier, heart attack, Henry K. Lee.Henry Lee, Jonathan Adler, Laura Sanders, Myocardial infraction, out of Africa, Pamela Druckerman, Photography is not a Crime, piano, trial by battle, voter fraud