Crony Capitalism - The Real Story

The annual Gross Domestic Product of the United States, the combined total of all goods and services sold in the US, is currently about $15.68 Trillion.   Local, State and Federal Government spending today represents about 40% of annual GDP, or over $6 Trillion of this amount.   As a result, Crony Capitalism is unavoidable and a real problem.   Many publicly traded companies get billions of dollars each year in revenues from government spending.   Since these larger companies live quarter to quarter and senior management huge bonuses are often predicated on short term results, it is easy to see why these corporate CEO's of both political parties support government largess.  And, many smaller, privately owned companies need government spending just to stay in business.    This is also the reason why the US Chamber of Commerce supports Establishment Republicans that will keep the pork coming even if in means bankrupting our country and eventually causing the economic collapse of the United States.

The problem is that government spending happens as a result of higher and higher taxes, which in the end is a job killer. Cards talk and numbers don't lie.   We have about 50 million Americans on Welfare and Food Stamps,the highest number in our history and the lowest labor participation rate in three decades even though total government spending has never been higher.   And, government spending always involves waste, fraud, abuse and redundancy so it is not the best way to use the resources in our country.   Private citizens spending their own money always do it more wisely than government ever will.  There is a place for lower government spending perhaps at no more than 25 - 30% of GDP, which is traditional.  That would mean that federal government spending would need to shrink from the current 25% of GDP to no more than 17 - 20% to get optimum economic results, while dealing with our national defense and providing a reasonable social safety net for those who simply cannot care for themselves because they are mentally, or physically unable to do so.  

In any case, government regularly picks winners and losers every year by giving business to many companies in the US, so Crony Capitalism by definition is all around us.  Koch Industries and the Koch Brothers, who Socialists love to demonize, own Georgia Pacific, one of the largest producers of paper products, including toilet paper.  The Koch Brother's, who own one of the largest privately owned companies in the world, are small government libertarians, however,  it is inevitable that they too benefit from government largess out of necessity.  The government needs billions of rolls of toilet paper and buying at least some of it from Georgia Pacific is inevitable, which enriches the Koch Brothers.   Wal Mart earns billions in revenues off the Food Stamp program, since many of the 50 million Americans that get Food Stamps shop at Wal Mart.   The same is true for JP Morgan that actually issues the Food Stamp Debit Cards to pay for those groceries. 

Let's face it.  Whose Bread They Eat, Whose Song They Sing.   Any company that benefits from government programs, benefits from Crony Capitalism.   Some of these government deals, like funding wind and solar power companies, with tax payer money, that have gone bankrupt make the headlines; but the reality is that Local, State and Federal governments are the 800 pound gorilla in our economy.  Naturally, those companies and indirectly their employees that benefit from government spending all support more of it even if it bankrupts our country.  It is what it is.