Thursday, November 15, 2012

Amazing disconnect

Watching the election returns on TV, I heard more than one commentator note Mitt Romney's problems stemming from his unclear embrace of the auto bailouts -- which directed about $65 billion of TARP money to GM and Chrysler.  But the auto bail-outs are simply a case of unusually unsubtle crony capitalism. I have posted previously that those who complain about hundred of millions of dollars spent by super-PACS on political campaigns remain strangely silent about the hundred of billions that clearly fall into the crony capitalism category.

One who is not fooled is Neil Barofsky, author of Bailout and former Inspector General in charge of oversight of the $700 billion Troubled Asset Relief Program (TARP).  Barofksy describes himself as a "lifelong Democrat" and served as Special Inspector General charged with looking at how and where the TARP billions went -- in the Bush as well as the Obama Administrations.  His book is important in that it details how old Washington hands worked very hard to mask the crony capitalism at the heart of TARP.  Barofsky also notes that, "Dodd-Frank didn't change the post-crisis status quo of too-big-to-fail; it cemented it" (p. 220).  So much for the Washington "reformers".

There is no "good" vs "bad" crony capitalism. There is only big money flowing in and out of big government with predictable results.  One of the most amazing disconnects in modern America is in the minds of those who rationalize big government but who cringe at the money flowing into politics.