“These days, thanks to big government, capitalism often means crony capitalism, where politically connected businesses get subsidies and bailouts. ‘Crap-italism’ I call it. But crap-italism is only possible when big government makes laws that give some businesses advantages. That is not how it should work. Whether you call it the free market, or capitalism, or greed or enlightened self interest, it is that competition of the market that has lifted more people out of the mud and misery of poverty than any other system or government ever has. “ John Stossel (b.1947) American consumer reporter, investigative journalist, author and libertarian columnist
I learned a new term today that I plan on using. Crap-italism. No, that is not a typo. It is combination of the words “crony” and “capitalism” and I think it a far more accurate word to use when we try to describe what happens when government gets in bed with special interests with deep pockets. We get corruption, the stifling of competition through regulation and preferential tax treatment, an anemic economy and continued job loss. In earlier articles I suggested ways to reduce these problems with reduced regulation and a simplified tax code. However, we first need to understand that nothing will change unless we get rid of all the crap-italists in our government.
Currently the top 30 American corporations are paying more in lobbying than they are in taxes. With the exception of Fed Ex (who paid 1% in taxes), all of these companies paid 0% in federal income taxes, yet still spent $476 million on lobbying per year. While there is nothing illegal in lobbying your government, something is really wrong with this picture when lobbying seems to actually boost your bottom line. CurrentlyAmerica’s corporate tax rate is 35%, the second highest in the world (for now anyway – Japan is expected to lower their rate next year). So, if most ofAmerica’s other corporations pay this tax, how do the top 30 corporations get $11 billion in tax rebates in order to avoid paying them altogether? Do you think crap-italism had anything to do with it?
Businesses are not stupid, as being stupid costs money (wish our government would understand this concept). Why spend more in taxes when you can spend far less on lobbying for special favors, bailouts, exempted tax status or regulations to strangle the competition? Most American companies do not have the deep pockets to pay for the lobbying necessary for such preferred tax or regulatory treatment. So is it any wonder why so many of American businesses that are not on this top 30 list struggle to survive? This is why we do not have the growth needed to create jobs. This is why big companies are able to get bigger while their small competitors go out of business, or worse, gets sold to a foreign competitor. Our best and brightest are losing out on the American dream, and it is not because of capitalism. It is because of crap-italism.
Ordinary Americans are not fools. We are finally understanding and seeing the difference between the two, and it has those who shrill (on both sides of the aisle) for the heavy hand of government to feather their nest running scared. When a small café pays more in corporate income tax than the richest corporation does, then “something is rotten in the state of Denmark” (Hamlet Act 1, scene 4, 87–91). Capitalism is meant to provide a level playing field, but the thumb of government needs to be taken off the scale before all corporations can compete openly, freely and fairly. It’s time to put an end to the stink of crap-italism.
Caucuses are Tuesday January 3rd 2012, folks. What do you say we go and help shovel out the barn?