Neither party will ever admit they support cronyism. Instead, they will argue that they support the most helping businesses. This is not true. What they should say be saying is they support some businesses. Nothing exemplifies this quite like President Trump’s steel tariffs…https://nyti.ms/2nfNlLt
Two of America’s biggest steel manufacturers — both with deep ties to Trump administration officials — have successfully objected to hundreds of requests by American companies that buy foreign steel to exempt themselves from President Trump’s stiff metal tariffs. They have argued that the imported products are readily available from American steel manufacturers.
Charlotte-based Nucor, which financed a documentary film made by a top trade adviser to Mr. Trump, and Pittsburgh-based United States Steel, which has previously employed several top administration officials, have objected to 1,600 exemption requests filed with the Commerce Department over the past several months.
This is cronyism at its worst or best depending on your perspective. Picking winners and losers, no matter how business savvy the President is, will never work. He will always pick wrong and companies will always try and take advantage of the situation. This is why Republicans usually support market forces because millions of people are always better than one. Republicans might flirt with cronyism but Democrats put a ring on it. If you want to see the true disruptions in an economy look to the regulations and taxes Democrats love…https://washex.am/2AIs7iO
Nevertheless, while the tariffs have made national headlines for harming American industries, similarly, costly state-level policies that affect alcohol have received less media attention. Like tariffs, however, state protectionism also hurts the booze industry by increasing production costs and raising prices for consumers. Consequently, while Trump’s tariffs deserve criticism, efforts to push back against protectionist policies should not be confined to the national level.
The alcohol industry ultimately operates as a case study in how protectionist policies at both the national and the state level hurt growth and limit consumer choice. Trump’s tariffs exemplify this nationally, while legal strictures like Minnesota’s in-state grape requirement and the three-tier system demonstrate it on the state level. In both scenarios, businesses are often forced to raise costs and curtail investment in new innovations.
With all this confusion on what is conservative and what is capitalism, the solution is simple. John Hood argues we need to be pro-enterprise, not pro-business…http://bit.ly/2vHvGA5
To be pro-enterprise is not necessarily the same thing as to be pro-business, particularly if the latter is defined as encompassing any policy that might benefit a specific firm or industry. As the original pro-enterpriser, Adam Smith, put it in his Wealth of Nations: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Left-leaning analysts sometimes misquote Smith’s passage as an argument for government regulation. Smith’s argument was not that the inevitable collusion of business interests required a strong central government to police. Rather, Smith observed that because there is a natural inclination for economic actors to make use of whatever means might be available to give themselves an artificial advantage in the marketplace, governments should minimize the availability of such means.
Hood (with the help of Adam Smith) hit the nail right on the head. If given the option, corporations will shut out competitors for their own self-interest to the expense of customers. This can’t happen with free and open markets only the government can do this. Many believe that we can mitigate the negative effects of government control by making sure we elect the right people. However, as they say, the road to hell is paved with good intentions. Whether government officials mean well or not they will undoubtedly make the wrong choice. So we need to make sure they aren’t the ones making it.