Bruce Bialosky

Big Business also uses its muscle to influence public policy. Walmart – along with the major drug companies – sold us out on the health care bill to get a competitive advantage. Now Wal-mart is teaming up with the government to coerce Amazon into collecting sales taxes for interstate sales – every dime of which will come out of our pockets. In both cases, Big Business is actively working to expand Big Government – and always at the cost of the little guy.

Walmart moves into a new market area and there are major protests. The protests are not because Walmart has tremendous advantage over local retailers with confronting government regulations such as OSHA. Although the argument centers on the ability of small retailers to survive with Walmart as a competitor, the campaign to stop the big box retailer is funded by Big Unions and other Big Businesses such as Safeway and Costco who hire those unionized workers. These entities use Crony Capitalism to achieve their goals to protect their own interests.

Business Licenses – We often complain about government intervention in our lives, but then we run to the government, usually at the State level, to protect our businesses from competition. The expansion of unwarranted licensing requirements is completely out of control, and just drives up the cost of government and the related licensed services.

No one will ever dispute that certain professions need to be licensed. From my standpoint as a CPA, I believe that it’s actually good that the Feds have stepped in to demand minimal testing for tax preparers – a requirement instituted in response to multiple instances of charlatans using the tax preparer role to defraud the government through the abuse of refundable credits.

Yet the list of “professions” lining up in state capitals to protect themselves under the guise of protecting the public boggles the mind. A recent article in the Wall Street Journal identified cat groomers, music therapists (whatever that is), tattoo “artists,” and tree trimmers as examples of “professionals” attempting to enhance their own revenue through Crony Capitalism. In New York State, you need a license to be an interior decorator. To be fair, some of the houses I’ve seen there clearly warrant criminal charges against their designers, but a license? Thankfully, there are no licenses required for movie makers, because most of Hollywood would be in Leavenworth.

These ridiculous requests by private citizens to have government safeguard them and protect their income are no less offensive than the policy and regulatory manipulations by big businesses.

Government Workers – Yes, this is also Crony Capitalism and it’s no better – and often much worse – than the categories above.

Many government workers are members of unions, which extract excessive dues through payroll deductions. The union then uses those dues to elect council members, school board members and state representatives who are beholden to them. The elected officials then rubber stamp their benefactors’ salary and benefit requests. If this isn’t Crony Capitalism, then I don’t know what would qualify as such.

The common thread here is that Crony Capitalism is a symptom of too much government. Business owners are often forced to make a tough decision: do I stay true to my free-market convictions, or do I play the game. Sadly, too many executives – like Jeffery Immelt – become whores to government and sell their principles for short-term benefits. Is there any surprise that GE announced it made over $14 billion in 2010 and made no American taxes? Unfortunately, those short-term benefits turn into long-term losses of freedom that may never be regained, and for which we all pay a very steep price.


Bruce Bialosky

Bruce Bialosky is the founder of the Republican Jewish Coalition of California and a former Presidential appointee. You can contact Bruce at bruce@bialosky.biz