In previous blogs I have written about the problems associated with Corporate Cronyism. I am not the only one who sees the issues associated with an unfair playing field. In a recent Rasmussen poll, 68% “of voters said they believe government and big business work together against the rest of us.” This unholy partnership is nurtured through increased lobbying activities. I agree with Koch when he states in his WSJ article, “The growing partnership between business and government is a destructive force, undermining not just our economy and our political system, but the very foundations of our culture.”
This cronyism creates a system based of favors, you scratch my back and i’ll scratch yours. Instead of focusing on meeting a customer’s needs the company focuses on which party will give it the biggest handout. This system then evolves into a political system that picks winners and losers. The result of this system is businesses that are unable to compete in the international realm, subsequently leading to higher prices for us. An example of this was given in Koch’s article this morning. “By subsidizing and mandating politically favored products in the energy sector, the government is pushing up energy prices for all of us.” Koch, who has been a recipient of these favors, Koch Industries, states that these subsidies actually kill jobs not create them. Government intervention kills efficiency not enhances it.
When we hang around the fort waiting for government handouts creativity dies. Things come to easily, and we just wait for the next shipment of meat, blankets, or whatever. It kills the entrepreneurial spirit. Another way our political system kills entrepreneurism is its policies. I’ve written about this before, but I just read a new wrinkle in this discussion.
“In 2009, Argentinian entrepreneur Pablo Ambram spent three months at a prestigous business incubator in San Diego, California developing his company, Agent Piggy, which uses technology to teach children about financial management.” Ambram did everything he needed to do to create a business, but his visa ran out and he had to leave. America has no visa category for immigrants who want to start a business and create jobs. Ambram wanted to incorporate in the U.S. because of the size of the market, but was not allowed to due to our policies.
Don’t get me going on how our current tax system hurts the ability of new businesses to start here in the United States. The fact is we need to look at our overall business tax structure and political policies to ensure we can compete at the highest level internationally. If we allow cronyism to continue we will become an Italy, or worse evolve into a state capitalism like China or Russia. We need a fresh set of eyes looking at this issue.
And that is my thought for the day!