John R. Houk
© November 15, 2012
I received an alert message from Team Sarah concerning Crony Capitalism. The alert centers on Peter Schweizer who was part of an exposé on 60 Minutes about Crony Capitalism. Here is an excerpt of the original email sent by Team Sarah (The link above is an updated message of the original email):
It seems that the rest of the media is finally paying attention to the crony capitalism drum that Governor Sarah Palin has been beating for quite some time. Tonight, 60 Minutes will air an episode that will feature Peter Schweizer, adviser to Governor Sarah Palin, and author of “Throw Them All Out”.
CBS news provides the following information on tonight’s show which will air at 7:00 p.m. Eastern:
Martha Stewart went to jail for it. Hedge fund honcho Raj Rajaratnam was fined $92 million and will go to jail for years for it. But members of Congress can do the same thing -use non-public information to make stock trades — and there’s no law against it. Steve Kroft reports on how America’s lawmakers can legally make tidy profits on information only they know, simply because they won’t pass a law against themselves. The report will be broadcast on Sunday, Nov. 13 at 7 p.m. ET/PT.
Among the revelations in Kroft’s report:
* Members of Congress have bought stock in companies while laws that could affect those companies were being debated in the House or Senate.
* At least one representative made significant stock purchases the day after he and other members of Congress attended a secret meeting in September 2008, where the Fed chair and the treasury secretary informed them of the imminent global economic meltdown. The meeting was so confidential that cell phones and other digital devices were confiscated before it began. (You can read the rest of the CBS article HERE)
There were several links relating to Crony Capitalism inherent in Congress (Dems & GOP) and the Executive Branch. The reports focus on Obama’s Administration of the Executive Branch but I would not be surprised that there has been Crony Capitalism among several Presidential Administrations over the years in the 20th and 21st centuries.
Just so we are all on the same page, let us examine briefly a definition of Crony Capitalism:
Crony capitalism is a term describing a capitalist economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, and so forth.
Crony capitalism is believed to arise when political cronyism spills over into the business world; self-serving friendships and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals. (Wikipedia)
The definition above seems to focus on the benefits of business from the favoritism of government. In most cases many of benefits if exposed quite probably are illegal for private citizens. Schweizer examines Crony Capitalism through the lenses of benefits for government individuals as noted earlier in Congress and the Executive Branch. In Congress’ case it is totally LEGAL for members of Congress to benefit from economic and stock information for personal enrichment monetarily. I am guessing the Obama Administration does not have the covering of a legal umbrella that will prevent investigations and arrests.
Crony Capitalism is a primary message that had been delivered by Sarah Palin in her Tea Party stumping over the past few years (too bad she opted out of GOP nomination). A good example of this is Sarah Palin herself as heard on Grizzly Coalition Action Report from Blog Talk Radio.
Peter Schweizer’s book, articles and news shows appearances are important because he is also getting coverage from the MSM. Schweizer’s coverage of Crony Capitalism gives strength for the existence of the Tea Party Movement (TPM) and TPM’s influence in the Republican Party to give the boot to politicians that insist on the old politics as usual thinking. One of the ways to get a hold of America’s economic woes is to make the rule of law apply to government just as much as to Joe Voter.
Below is a Schweizer article on Crony Capitalism followed by the 60 Minutes spot that peers into government Crony Capitalism with a particular focus on Congressional Insider Trading.