Posts tagged ‘Crony Chronicles’

A NY Example of DC Corruption and Cronyism

You sometimes hear of a Congressman who raises more money from New York state, or from the D.C. region than he raises from his home state, reflecting perhaps that he’s out of touch with the place he’s supposed to represent.

Congressman Chris Collins (R-NY), though, represents a district in the Empire State, which makes it more amazing that he’s raised more money so far this cycle from D.C., Maryland, and Virginia than he has raised from New York.

. . .

Collins’ ties to the drug industry are a lot more intimate than that, though. He is a very wealthy businessman (subsidies from the Export-Import Bank have helped), and recently his net worth got a boost thanks to a pharmaceutical stock in his portfolio, in an episode that highlights Collins’ tendency to blend policymaking, fundraising, and investing.

Collins is the No. 1 shareholder in Innate Immunotherapeutics, an Australian drugmaker. The Daily Beast reported that Collins has been close to the company since 2005 and joined the board in 2006.

Collins also played a major role in shaping the 21st Century Cures Act. According to various news reports, Collins inserted a provision into the late-2016 legislation that allowed a fast-track approval process for investigational drugs. This provision boosted Innate’s stock by helping bring Innate’s sole product, a Multiple Sclerosis drug called MIS416, to market more quickly.

Collins just happened to have bought up about a million dollars in Innate stock in August 2016, as the 21st Century Cures Act wended its way through Congress. This purchase was part of a special stock offering — a VIP opportunity into which Collins brought some friends. “Sixteen people with close ties to Collins bought Innate shares at discounted prices of $0.18 or $0.26 cents per share,” the Daily Beast reported in April. “Those investors have given nearly $42,000 to Collins’s political campaigns over the years, a review of campaign finance records found.”

This brings us back to his donor list.

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Collins’ friends who bought discounted stock in 2016 would have paid around 25 or 34 cents per share, according to the New York Times. Shortly after the bill became law, the price skyrocketed, eventually to $1.77 per share in January. Shortly before that peak is when reporters overheard Collins talking on the phone saying, “Do you know how many millionaires I’ve made in Buffalo the past few months?”

Being a donor or friend of Chris Collins pays off.

Chris Collins, self-proclaimed millionaire-maker, wades into another drug lobby fight

Revolving Door Tax, Crony Capitalism, Ozymandias

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Crony Capitalism in DC. Again.

Five years ago, a new quirky-sounding consumer-rights group set up shop in a sleepy corner of Capitol Hill. “Consumers for Paper Options is a group of individuals and organizations who believe paper-based communications are critically important for millions of Americans,” the group explained in a press release, “especially those who are not yet part of the online community.”

This week, Consumers for Paper Options scored a big win, according to the Wall Street Journal. Securities and Exchange Commission chairman Mary Jo White has abandoned her plan to loosen rules about the need to mail paper documents to investors in mutual funds.

Mutual funds were lobbying for more freedom when it came to mailing prospectuses — those exhaustive, bulky, trash-can-bound explanations of the contents of your fund. In short, the funds wanted to be free to make electronic delivery the default, while allowing investors to insist on paper delivery. This is an obvious common-sense reform which would save whole forests of trees.

Consumers for Paper Options fought back. The group warned that changing the default from paper to electronic delivery would “Confuse potentially millions of investors who suddenly stop seeing important printed fund performance material from investment firms.”

. . .

This is almost laughable: A D.C. lobbyist forming a sham “consumer” protection to fight for federal rules requiring more paper and envelopes be wasted, while getting paid by the envelope lobby.

But the envelope CEOs and the paper lobbyists aren’t the only ones who care about keeping this junkmail flowing. Those paper mills that exist in the U.S. are deeply threatened by digitization. Among the shrinking list of things that go on paper these days are things the government forces people to put on paper. Allow mutual funds to mail fewer prospectuses, and those paper mills will lose a significant amount of work.

The employees at these mills will see their hours reduced, if they’re not simply laid off. The added costs of mailing me unwanted paper nibbles away the value of my retirement account, but is a tiny uptick in my 401(k) really worth laying off paper mill worker in East Millinocket, Maine?

. . .

Here’s the thing about the federal rule requiring the mailing of the prospectus: It’s absurd and wasteful, and it differs only in degree from most subsidies whose defenders use the same “save the jobs” rhetoric.

In a federal mandate for waste, envelope lobby reveals Washington

Ozymandias and statolatry

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The Crony Class Includes the Political Class

The Kronies, from John Papola and Emergent Order

For most of US history, crony capitalism has been in a struggle with free-market capitalism for the heart and soul of the American economy. For the past half century, crony capitalism has been gaining the upper hand. There are many reasons why, all of which can be traced to the insatiable desire of the state to gain and hold power.

How the World Was Made Safe for Crony Capitalism

Crony in Chief

Crony Chronicles | The Cronyism Resource

Cafe Hayek – Crony Capitalism

Fannie Mae And Freddie Mac Exemplify The Horrors Of Crony Capitalism

ObamaCare’s Crony Capitalism: Worse than We Thought

Crony Capitalism in America: 2008-2012

An Obama renaissance of crony capitalism

Curt Schilling, Crony

We need a Revolving Door Tax (RDT)

Sheila Bair, Crony
Sheila Bair, regulator who criticized the revolving door, passes through the revolving door

Chuck Schumer, Crony
Chuck Schumer: Voice of the little man, courtier of plutocrats

Joe Lieberman, Crony
Joe Lieberman’s revolving-door spin, and the profitability of bigger government

David Strickland, Crony
Obama revolving door: Auto safety chief who oversaw Toyota case cashes out to Chrysler’s lobbying firm

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The Case Against Cronies and Crony Capitalism

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.
. . .
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.
. . .
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.”

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Crony Capitalism

Crony capitalism is not the same as free markets, it is a politicized economy.

Cronyism diverts resources away from the wants and needs of consumers and toward political purposes. Cronyism occurs when an individual or organization colludes with government officials to create unfair legislation and/or regulations which give them forced benefits they could not have otherwise obtained voluntarily. Those benefits come at the expense of consumers, taxpayers, and everyone working hard to compete in the marketplace.

What is Cronyism?

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