The Daily View: Crony Capitalism, Fallacy of Composition, and Compromise

From The American Conservative: The Tricky Politics of Fighting Crony Capitalism

For a website with the title Conservative, it sure seems to advocate a lot of liberal positions on issues ranging from domestic spying, foreign policy and crony capitalism. Liberalism is a bigger threat than crony capitalism. One could make the argument that crony capitalism, if used to promote pro-growth policy, represents a near optimal transfer of capital that otherwise wouldn’t occur. Consider Tesla, for example, that was given a $500 million loan and is now worth over $30 billion, having replayed the loan in 2013. That’s a pretty damn good ROI and an example of how crony capitalism can create wealth. Defense contracts have helped keep America safe since 911. These liberals masquerading as conservatives want to keep America’s borders secure with fences and guards but it’s digital networks porous by neutering the NSA and the homeland security. Just as terrorists can physically cross a border, they can also communicate and recruit through the phone and internet. Even Murray Rothbard, Ayn Rand and Milton Friedman understood the need for a strong police and military, ‘The only proper purpose of a government is to protect man’s rights.’

From Captain Capitalism: How Liberals and Leftists Inability to Adhere to Math and Logic Proves They Are Mentally Damaged

We agree about liberals being stupid. Most liberals pass air from ear to ear, but regarding the debt, the U.S. is not a household. To make such an analogy is called the fallacy of composition. The U.S. government, unlike a household, is perpetual. It can keep rolling its debt indefinitely, unlike an individual whose debt is discharged upon death. The GOP of today is making the mistake of echoing the antiestablishmentism of the 60′s counterculture ‘new left’, except the ‘man’ is the federal reserve and the NSA. We’re pragmatists and utilitarians, meaning we support policy that enables flouring on an economic and personal level (Eudaimonia). In agreement with conservative thought, we believe in personal responsibility instead of blaming the the rich, student loan companies, the fed, congress, or whatever. The problem is now some conservative and libertarian types are now blaming the fed, just like liberals blame the rich. But it’s still playing the blame game. Like the left, they are attacking wealth creation, except not by wanting to raise taxes or impose regulation, but by ending the fed programs such as QE that has proven so successful in creating wealth in the stock market, web 2.0, and the real estate boom. ‘Ending the fed’, jacking up interest rates to 5% or abruptly ending QE will cause the same wealth destruction – if not more – than raising taxes. So even though you call yourself a conservative or libertarian, your policy will have the same effect of hurting the 1% – the most productive and important members of society. The GOP didn’t used to be so pessimistic and angry about the economy, higher education, the American dream, or the youth. As we wrote last week, the GOP must return to the pro-growth policy and optimism that lead to the election of Reagan and Bush and abandon this recent obsession with deficits, the fed, NSA, etc.

Dear Stupid Students, America Can’t Afford Your Stupidity

In the second video, he’s correct about how it behooves the borrower to take personal responsibility as well as the necessity of reading the fine print and understanding compound interest and other financial terms before signing for a loan. We disagree in trying to draw parallels between student loan bailouts and bank bailouts; while we agree that student loan borrowers don’t deserve a bailout, Wall St. did because they create more economic value and there is much greater systemic risk in letting key financial institutions drown than individual borrowers. It may not seem fair to pick winners and losers, but it’s price to pay to have a huge economic recovery and a huge bull market. Governing is about compromise and trade-offs. Sometimes the best solution is the one that makes no one happy.

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