Yay. A new study confirming what has been confirmed dozens of times before. When the government picks the winners and the losers we all do worse. And equality of opportunity is more important than equality of outcome. Of course nobody in government like those facts. So soon we will need yet another study confirming it all over again.

On a side note, the US economy is looking especially vulnerable. The stock market probably won't do well this next year.

I'm "transfinancial". A rich person born into a poor person's body. Please send money.

The term should be Crony Socialism or Crony Government. Crony Capitalism is a slur promoted by socialists, as is the word Capitalism, a slur created by Marx to oppose freedom of ownership and productive work.

Andrew, crony capitalism fits best -- best describes what's going on here, capitalism in name only.

Fascism light

Both Mbruce and Andrew have a point.

Fascism and socialism are systems that emphasize the whole of society or the country at the expense of individual and property rights. A limited group of people make decisions for the rest of us (whether it's said to be for "the people" or for the county is the only differing point - in practice, they're both dictatorships that are virtually indistinguishable from each other). The other main difference is who the enemy from which the -ists will protect us is - millionaire industrialists or Communists. Both require a "them" from which to protect "us."

Imagine Bernie Sanders as president and imagine you invent a new kind of software that makes millions. How much control over the distribution of that software do you think you'll be allowed to keep? How much of the profits? Now imagine you contributed heavily to his campaign and are in favor.

Neither fascism nor socialism respects the rights of individuals to own property or start a business. Both engage in protectionism, creating high barriers to entry for markets and industries to protect existing producers (the ones allied with the government).

The government picks the winners and the losers, not market forces. Nothing capitalist about it.

It's called crony capitalism because people don't really understand capitalism and because the government isn't setting production quotas. And because competitors are free to enter the market. But how free to compete would a competitor to a heavily-subsidized organization on which government regulators looked kindly actually be?

Imagine you were competing against Solyndra (before it finally went broke) for investors and the government announced its loan guarantees Upon which company do you think the venture capitalists would have looked more kindly? Do you think investors would have weighed the merits of your company without bias against Solyndra's? Or do you think the loan guarantees would have swayed them to put their money in Solyndra, with its bigger financial base and government support?

Calling it Crony Capitalism disguises the fact that we're sliding into a quasi-fascist government. And that the main Democratic challenger (Bernie Sanders) would do little to change that.

I think the main Republican challenger for the presidency (Donald Trump) or even some of the other challengers (Bush, et al) would little to prevent that slide either.

I first heard the term "crony capitalism" in relation to Japan's Ministry of International Trade and Industry (MITI) in the early 1980s. Japan's tech industry was very much in a fascistic "managed competition" mode. The primary emphasis was to expand foreign trade while maintaining protected markets at home. That, combined with business ownership inter-linkage that is traditional in Japan (important families would own significant interests in all of the competitors in a given market) meant that internal competiiton was limited, which was what MITI wanted. Through the ownership linkage, MITI was able to direct development and engage in central planning. MITI also sponsored measures to establish protectionism, shielding domestic markets from imports, and preventing foreign investment in Japanese companies (which would bite them in the ass later).

Throughout the '80s, Japan was a economic powerhouse, and MITI was a name you saw in the tech trade publications every week. A lot of people credited MITI's methods for the tech boom, and pushed for the U.S. to adopt similar policies. In particular, there was a whole bunch of worry that Japan would come to dominate the integrated-circuit industry to the extent that it would present a national security threat to other nations. Read The Japan That Can Say No if you want to see the zeitgeist of the time.

Of course, what people didn't realize was that Japan's boom was driven not by MITI planning, but by a combination of tech innovation, and stupidity among the American automotive corporation/union/government cartel. Eventually other competition caught up on the tech side, and the protectionist policies restricted the availability of investment money. The bubble popped in the early '90, and Japan has never recovered.

"Of course, what people didn't realize was that Japan's boom was driven not by MITI planning, but by a combination of tech innovation, and stupidity among the American automotive corporation/union/government cartel."

Edward W. Deming. Led the Japanese out of the "cheap junk" regime in the 60's, then Ford Motor Co into the modern era in the late '70s.

Raddy, exactly right... Deming went to Japan after he couldn't get anyone in Detroit to pay any attention to him, and his ideas transformed their auto industry. He started the quality revolution worldwide. It's hard for us to appreciate now how radical his ideas were at the time. And in an indirect way, I think he contributed a lot to busting the industrial labor unions in the U.S. The "own your work" principles he espoused were irreconcilable with the "work rules" union attitude.

BTW, I think it was "Edwards" Deming.

BTW, I think it was "Edwards" Deming. ~ Posted by: Cousin Dave at August 24, 2015 1:32 PM

It was W(illiam) Edwards Demming.

https://en.wikipedia.org/wiki/W._Edwards_Deming