5 Years ago my business partner Hunter Lewis asked me if I wanted to develop AgainstCronyCapitalism.org. I ‘d write about the phenomenon of crony capitalism day in and day out and I would explore the concept closely. We were sure there was plenty of material.
We were right. Every day there are new high profile instances of crony capitalism. Day after day, week after week, there are new tales of crony corruption and collusion. Over the past 5 years, we have documented and analyzed the chicanery. My new book, Politicos, Predators, Payoffs, and Vegan Pizza – Dispatches from the Crony Capitalism Wars is a collection of some of the stories we’ve covered.
The bailouts were really the great coming out party for the cronies. Sure crony capitalism existed in the US to a very great extent before the Crash and the bailouts, but it was the unprecedented actions of the Fed and the US government in the winter of 2008 -2009 that showed the world without doubt what the new order was. Too Big to Fail was too big to fail. Giant bank? A car company that hasn’t made a decent sedan in 20 years but is filled with union workers who vote? No problem. The taxpayers will keep you afloat.
The average person, the outsider, the non-crony? Ha! You are not systematically important. You are not too big to fail in either economic or political terms and as such you get to fail. We wish you luck though. I mean, hang in there kid. But all of the bailout money went to pay bonuses at Goldman Sachs. (1 year after the bailouts Goldman paid its biggest bonuses ever.)
It has always struck me as particularly nuts that most of the people who lost their homes in foreclosure during the Crash, and many of these homeowners were indeed horrible financial risks, still managed their “books” better than many of the big banks. The empty mcmansion crowd might have been in debt to their eyeballs but they weren’t leveraged 100 to 1 like some of the entities on Wall Street.
But being on Wall Street, in the right firms on Wall Street, means never having to be accountable. At least so long as one is high enough in the bank hierarchy. It’s just one of the perks.
To make matters much worse, in the wake of the Crash just as many predicted, people started to blame “capitalism” and “free markets” for the implosion of the economy. A meltdown facilitated by a price setting, central planning, Federal Reserve, and exacerbated by boneheaded government meddlers was now the fault of the free marketeers? What kind bizarro reality had we just entered?
The world was spinning. The big government folks were licking their chops. “Stimulus” was being deployed. Occupy was in the streets. Obamacare was on the way. The statists were on the march. A new economic dark age loomed.
It was in this chaos that Hunter Lewis and I birthed AgainstCronyCapitalism.org. We knew, like many of our liberty oriented brothers and sisters did that this anti free enterprise, anti free price narrative would be pushed and pushed hard by government and crony business alike. It was open season for the planners. The pro-state, pro-crony narrative had to be countered. We decided that ACC was one of the ways we’d do this. And it sure has been fun.
An Excerpt from Politicos, Predators, Payoffs, and Vegan Pizza
The American Reformation Has Begun, Ron Paul the Modern Day Martin Luther
February 20, 2010
On October 31st 1517, Martin Luther trudged up a hill to the Castle Church in Wittenberg and nailed his 95 Theses to the door in the early morning light. The Theses amounted to a moral indictment of the Catholic Church, the controller of this world and gatekeeper to the next. It was an act of supreme individual defiance, and an almost suicidal act. Martin Luther likely did not expect to see the sunset that day.
Yet Luther had reached a place in his psyche where he felt he had to say what he believed, that Rome, the Catholic Rome, had become a Babylon that represented all that Christ did not. Luther believed there need not be an arbiter between man and God. Salvation was granted by God alone, and not by some functionary of the “Church,” who was paid for this absolution.
Basically Luther called Rome out as an immoral, indeed anti-Christian, force in the world.
Many others had come to this conclusion in the years before Luther and many of these people had found their fate at the stake. But technology had changed Luther’s world. With the invention of the printing press 65 years before, the mass production of writings had become possible and so ideas were now much more easily spread. Even more vital was that the laity was becoming increasingly literate and so could download Luther’s ideas.
Many of the newly literate class had undoubtedly come to many of the same conclusions as Luther. For those who could read, the Church stood in stark contrast to the words of Jesus which they now had read first hand. The Church was a fist that extracted tribute and furthered corruption. The literate man could see this. Where before the average person had to rely on a priest to read the word of God to him, now he could read Jesus’ words himself. And the thing is Jesus was a revolutionary.
Luther had the guts to put this general inkling of the Christians of Germany onto paper and then to make these observations public. Others reading his analysis then took his work and sent it viral across Europe, thanks in large part to that new technology, the printing press. It was not long before The Reformation, essentially a spiritual, societal, economic, and political transformation was in full swing across Europe.
Flash forward half a millennia. Humanity and especially America finds itself in the midst of turmoil and tumult. In the past decade the barbarians have started knocking on the gate (September 11th, 2001.) The American “empire” is now being challenged on nearly all fronts, overseas, at home, morally, and politically. Factor in the emergence of a technology that is at least as revolutionary as the printing press, the Internet, and it is easy to see why we live in such interesting times.
As these changes have transpired our leadership has been slow to react. Part of this is due to the inherent nature of leadership hierarchies, they always resist change. Change means the possibility of new leaders. Another part is that much of our political leadership still exists in a 20th Century mentality. And I’m not just talking about the old white guys in the Senate, I’m talking about our president Mr. Obama too. They all fail to see that the only way for this country to prosper as it can again is to embrace a decentralized form of the state that works better in an increasingly dynamic world.
Thankfully we have the blueprint for this new way of organizing our country, it’s called the Constitution.
Enter a modern day Luther, an understated and unassuming man of slight build and modest pedigree, Dr. Ron Paul. A Congressman from Texas who against all odds has remained in Congress despite efforts by both the Republican and Democratic Parties to unseat him, Ron Paul nailed his own 95 Treatises to the political establishment’s door in 2007/2008 when he ran for president.
Because he was technically a Republican Ron Paul was allowed to speak during the presidential debates. He had run years before as a Libertarian but had gotten little coverage. This time however he had a bigger platform and his message resonated, just like Luther’s, with the marginalized literate middle class.
Luther read the Bible and found that the establishment that based its legitimacy on the sacred text, did not in any way reflect the tenets of Christianity. Likewise Dr. Paul looks to America’s sacred text, the Constitution, and sees the same hypocrisy.
What Dr. Paul voiced on the different stages during the presidential debates was in the minds if not on the lips of many who were paying attention to what was going on in American society. Though by no means a majority, especially in those years, many of these Americans could see that their government was broken and increasingly unrepresentative and unresponsive. Ron Paul gave voice to their frustrations, and articulated a solution.
People who could put 2 and 2 together could see that their government was increasingly disconnected from them. It cared little for them yet expected everything from them if need be. This feeling was not new and had waxed and waned over the previous couple of decades. But with the power of the internet these malcontents- and I use the term lovingly – could connect with one another and share ideas.
They were also able to organize. Though much has been made of Obama’s use of cyberspace during the 2008 campaign, it was Ron Paul’s efforts, or more specifically the efforts of his supporters, that were far more remarkable and innovative. Obama had the power of the Democratic establishment behind him. Ron Paul had the establishment, even his own party, actively working against him. Yet Ron Paul was able to effectively “crowdsource” an entire presidential campaign.
Just as Luther’s ideas were easily spread due to the printing press so to0 were Ron Paul’s ideas spread in a much shorter period of time via the internet. Millions of people who did not see Ron Paul on the televised debates were able to become familiar with him and his ideas via Youtube. His simple message of adhering to the Constitution, made sense. His call to the people was deeply American. It was both revolutionary and conservative at the same time. America is supposed to be the land of the free, he said, and we have been betrayed.
Like Luther, Ron Paul sparked a fire in hearts of many people who had lacked any kind of spark for a long time. His message of individual empowerment, of fairness under the law, and of accountable government gave, and continues to give, many who have lacked hope, hope. And it’s not Madison Avenue Obamaized hope. It’s real hope for this country- and for the restoration of the Constitution.
So maybe it’s a restoration and not a reformation that we are in the opening stages of. Whatever we call it Ron Paul started it. This should not be forgotten. Let’s hope that as this political wildfire spreads in the form of the Tea Parties and in other forms we continue to aspire to the ideals embodied in Ron Paul’s original call for smaller government, all forms of government, and strict adherence to that masterful document, the US Constitution.