Eric Schliesser on the likely cronyism from Trump's tariffs

From my own, more (skeptical) liberal perspective tariffs are an expression of mistrust against individuals’ judgments; they limit and even deny us our ability to shape our lives with our meaningful associates as we see fit.  And tariffs do so, in part, by changing the pattern of costs on us, and, in part, by altering the political landscape in favor of the well-connected few.  

Of course, in practice, tariffs are always hugely regressive by raising costs on consumer products.  This is, in fact, a familiar effect of mercantilism and has been a rallying cry for liberals since Adam Smith and the Corn league.  That is, some of the most insidious and dangerous effects of tariffs are evidently political in character.  They create monopoly profits for the connected few, who can, thereby, entrench themselves against competitors, regulators, and consumers.  It is well known that once a tariff is entrenched it is incredibly difficult to remove.  They create permanent temptations to bribe the executive and those with access to him.  

Watch for stories about import-quotas, tariff holidays, and ad hoc tariff exemptions to appear in the press and subsequent policy.  Political and economic uncertainty is generally a self-reinforcing process.  To undo it more and more actions by the executive are demanded by a scared public manipulated by profit-seeking adventurers.  It’s entirely predictable we’ll see the rise of a system of selective subsidies and cartels as Trump Tariffs are entrenched. 

~ Eric Schliesser, professor of political science at the University of Amsterdam

(Quoted by Lew Rockwell in "Trump's Insane Tariff Policy," April 17, 2025

Jim Quinn on the coming bailouts

Bailouts for airlines, cruise lines, frackers, hotels, and any other favored industry is in the offing. The fact these fake capitalists borrowed at near zero rates and bought back hundreds of billions of their stock in order to boost their stock price and reward themselves with hundreds of millions in bonuses, is water under the bridge in our crony capitalist paradise. It is truly despicable and traitorous to bailout these scumbags after their ten year orgy on the nation’s wealth.

Trump and his minions are following the exact playbook used in 2008/2009. Socialism for the corporate titans when they blow up the financial system, while average Americans lose their jobs and have their 401ks wiped out for the 3rd time in the last two decades. Every action being taken by politicians today is to save Wall Street and the mega-corporations who buy and sell them.

~ Jim Quinn, "Nothing to Fear But Fear Itself," LewRockwell.com, March 17, 2020

Warren Buffet endorses Dimon for US Treasury head

I think he'd be terrific.  If we did run into problems in markets, I think he'd actually be the best person you could have in the job.

~ Warren Buffet on Jamie Dimon as head of the US Treasury, November 27, 2012, CNN

Bernanke on MF Global failure

It appears to be an idiosyncratic case. We are monitering the possible impacts on funding markets and elsewhere, and so far we have not seen any significant impact on financial stability.

Ben Bernanke, Federal Reserve Press Conference, 11/2/2011

Sheldon Richman on the charade of left-right politics

The political establishment, helped by the mass media and intelligentsia, has long played a game in this country. It consists in depicting the competition for power as between two blocs: one hostile to business in the name of social justice, the other friendly to business in the name of “the free market.” Each bloc’s talking points and pet projects are calculated in superficial ways to reinforce its signature theme. Whenever the blocs need to rally their respective bases, they accentuate their surface differences. The “anti-business” bloc accuses its opponents of being, say, Wall Street lackeys, while the “pro-free-enterprise” bloc accuses its opponents of being, say, socialists.

It’s all a sham that serves both side’s interests. The rivals actually want two variations of the same thing: the corporate state, a system of economic privilege that transfers wealth via government from market entrepreneurs, workers, and consumers to well-connected business interests.

~ Sheldon Richman, "The Charade," The Freeman, October 15, 2010

David Stockman on Bill Gross, Pimco, crony capitalism, and gaming the drive to homeownership

Some raids on the US Treasury by America's crony capitalists are so egregious as to provoke a rant -- even if you aren't Rick Santelli. One such rant-worthy provocation is Pimco latest scheme to loot Uncle Sam's depleted exchequer.

According to Bill Gross, who heads what appears to be the firm's squad of public policy front runners, the American economy can be saved only through "full nationalization" of the mortgage finance system and a massive "jubilee" of debt forgiveness for millions of underwater homeowners. If nothing else, these blatantly self-serving recommendations demonstrate that Matt Taibbi was slightly off the mark in his famed Rolling Stone diatribe. It turns out that the real vampire squid wrapped around the face of the American taxpayer isn't Goldman Sachs (GS) after all. Instead, it's surely the Pacific Investment Management Co.

As overlord of the fixed-income finance market, the latter generates billions annually in effort-free profits from its trove of essentially riskless US Treasury securities and federally guaranteed housing paper. Now Pimco wants to swell Uncle Sam's supply of this no-brainer paper even further -- adding upward of $2 trillion per year of what would be "government-issue" mortgages on top of the existing $1.5 trillion in general fund deficits.

This final transformation of American taxpayers into indentured servants of HIDC (the Housing Investment & Debt Complex) has been underway for a long time, and is now unstoppable because all principled political opposition to Pimco-style crony capitalism has been extinguished. Indeed, the magnitude of the burden already created is staggering. Before Richard Nixon initiated the era of Republican "me-too" Big Government in the early 1970s -- including his massive expansion of subsidized housing programs -- there was about $475 billion of real estate mortgage debt outstanding, representing a little more than 47% of GDP.

Had sound risk management and financial rectitude, as it had come to be defined under the relatively relaxed standards of post-war America, remained in tact, mortgage debt today would be about $7 trillion at the pre-Nixon GDP ratio. In fact, at $14 trillion or 100% of GDP the current figure is double that, implying that American real estate owners have been induced to shoulder an incremental mortgage burden that amounts to nearly half the nation's current economic output.

There's no mystery as to how America got hooked on this 40-year mortgage debt binge. At the heart of the matter is the statist Big Lie trumpeting the alleged public welfare benefits of the home-ownership society and subsidized real estate finance. Once the conservative party embraced this alluring but dangerously destructive idea, the cronies of capitalism have had a field day conducting a Washington bidding war between the two parties which is now in its fifth decade

During this time span all of the congregates of the HIDC lobby -- homebuilders, mortgage bankers, real estate brokers, Wall Street securitizers, property appraisers and lawyers, landscapers and land speculators, home improvement retailers and the rest -- have gotten their fill at the Federal trough. But the most senseless gift -- the extra-fat risk-free spread on Freddie and Fannie paper -- went to the great enablers of the mortgage debt boom, that is, the mega-funds like Pimco, which did little more than hang out an "open to buy" shingle as billions poured in year after year. Sadly, there isn't a shred of evidence that all of this largese serves any legitimate public purpose whatsoever, and plenty of evidence that the HIDC boom has been deeply destructive. But the intellectual cobwebs spun by the housing cronies so obfuscate these truths that the only way to grasp them is through an examination of the contra-factual -- a postulated world without Freddie/Fannie/FHA and the $100 billion annual tax subsidy on mortgage interest.

In that world, households would be tax-indifferent as to whether they acquired shelter services through renting or owning, and appropriately so. There's simply no evidence that home ownership produces any externality or "public good," such as making people better citizens, causing them to work harder or aspire higher, turning them into better neighbors, or even growing hair on their chests. Housing is a commodity like furniture and automobiles, and inducing citizens to buy more of it is no business of the state.

~ David Stockman, "How Pimco Is Holding American Homeowners Hostage," Minyanville.com, August 27, 2010

Charles Goyette on American cronyism

America’s national government has moved way beyond a political spoils system. A spoils system leaves the host alive so that a politician’s occasional ne’er-do-well brother-in-law can be put on the payroll. America has become a piñata: everybody gets a crack at it. Presidents and other elected officials pass the big stick around as a reward to those who help keep them in charge of the piñata party. The American media plays the role of the party’s mariachi bank, keeping festive spirits high. And the people in their demographic and interest groups all line up to take a whack at the goodies. America has become a piñata.

~ Charles Goyette, The Dollar Meltdown