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Yes, Corruption Cripples the Economy

in Business and Economy, Economic Liberty, Economics, Liberator Online, News You Can Use by Alice Salles Comments are off

Yes, Corruption Cripples the Economy

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When analyzing the potential ramifications of picking one presidential candidate over the other, many prefer to overlook claims of corruption. On one hand, voters might not be exactly aware of what corruption may entail, but on the other, they might not be entirely sure of how corruption taking place in high levels of government will ever impact their personal finances. Unfortunately for those who do not seem to understand how corruption affects them, the consequences of rent-seeking and influence-peddling schemes go deeper than we expect.

corruptionIn Protectionism vs. Corruption: Which Is Worse for the Economy?, economist D.W. MacKenzie writes that while “an overwhelming majority of economists have agreed on the benefits of free trade since 1817,” many contemporary politicians believe that some trading restrictions help boost the U.S. economy.

But when it comes to analyzing the impact of corruption, few seem to take into consideration that political corruption “impairs economic efficiency and lowers living standards.”

Traditionally, corruption has always been treated as a legal affair, which might explain why the population’s attention is steered away from the real-world consequences of the practice.

According to MacKenzie, the problem with widespread corruption is that special interest groups take advantage of it, lobbying government elements directly to provide them with special treatment, therefore transferring wealth “from the general population into their pockets.” When analyzed closely, these special relationships between private industries and the government “make us all worse off” because the resources used to ensure these groups’ needs are being met could have been spared. In other words, taxpayer money spent on what many call corporate welfare could have stayed in the consumer’s pockets and then used for other purposes, getting that amount back into the economy and helping to make it grow.

Another aspect of political corruption that is often ignored is that free trade is the necessary condition for economic growth to occur, but in countries where markets thrive, their governments are often less impacted by corruption. Considering political corruption is inefficient and bad for growth, MacKenzie concludes, giving more power to politicians known for being corrupt will further damage the economy.

As voters cast their ballots for president, they must have in mind that the only policy that will bring economic growth and peace to America is the complete elimination of barriers to commerce, getting the government completely out of the business of picking winners. Unless the link between the government and the rent seeker is severed, there will be no room left for prosperity.

They Said It… P. J. O’Rourke, Nick Gillespie, And More!

in Liberator Online by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 11 of the Liberator Online. Subscribe here!)

Senator Rand Paul

RAND PAUL ON WHY WE SHOULD MINIMIZE GOV’T:
“You want to minimize how much government we have because government frankly isn’t good at anything.” — Sen. Rand Paul (R-KY) tweet, July 19, 2014.

P.J. O’ROURKE ON LEGISLATING PERSONAL MORALITY: 

P.J. O'Rourke

“Imagine trying to make the Ten Commandments into laws. There goes Hollywood Buddhism, representative art, golf on Sunday, the language I use during golf on Sunday, most sex, Wall Street, fibbing to escape the Tupperware party next door, and envying your boss’s Porsche. And we’d all be jailed for putting mom in the nursing home.” — P.J. O’Rourke, “Up To A Point: My Problem With People Who Agree With Me,” The Daily Beast, July 20, 2007.

Nick GillespieBACK TO IRAQ:
“[T]roops — well, advisers — are going back to Iraq, six years after this president was elected on a promise to get us out of there.” — Nick Gillespie, “After Bipartisan Bush-Obama Blundering, Let’s Try a Libertarian Foreign Policy,” The Daily Beat, July 16, 2014.


GOV’T VS THE POOR:

Cory Massimino“How do states harm poor people? Oh let me count the ways… patent and copyright laws, which impede competition, immigration restrictions, which lock people out of opportunities, licenses, which prevent people from entering the market, regulation that is often originated in rent seeking, the money monopoly, which helps large banks and currency manipulators, credit laws, which crush small banks through capitalization requirements, tariffs, which protect large companies from foreign competition, transportation, which helps big box corporations through highway subsidies, urban sprawl policies, which enrich construction companies, research subsidies, which hook the public on risky investments, limited liability laws that protect large corporations from lawsuits, labor laws that restrict the ability of unions to defend their workers, bailouts that directly redistribute wealth from the poor to the rich, eminent domain, which rewards land to political donors, a tax code that can be gamed by the wealthy, the military industrial complex that enriches weapons manufacturers, and more.” — Cory Massimino, “The Conscience of an Anarchist: A Review,” Center for a Stateless Society, May 30th, 2014.

UH-OH:

David Letterman“According to a new study, the largest producer of oil is now the United States. So you know what that means — any day now we’ll be invading ourselves.” — David Letterman, July 11, 2014.

 

REAL BREAKING NEWS:
“They want to make it so the president can instantly Jimmy Falloninterrupt TV broadcasts whenever there’s breaking news. Then Obama said, ‘And I mean REAL breaking news, not that CNN stuff.’” — Jimmy Fallon, July 15, 2014.

POWER OF THE PEN:
“House Speaker John Boehner is threatening to sue President Obama for using executive actions to create laws, instead of going through Congress first. Then Obama shrugged and made a new law that you can’t sue the president.” — Jimmy Fallon, July 7, 2014.

NOTED AND REQUOTED

LIBERTARIANISM:
Murray Rothbard“The fundamental axiom of libertarian theory is that no one may threaten or commit violence (‘aggress’) against another man’s person or property. Violence may be employed only against the man who commits such violence; that is, only defensively against the aggressive violence of another. In short, no violence may be employed against a non-aggressor. Here is the fundamental rule from which can be deduced the entire corpus of libertarian theory.” — Murray Rothbard, from his classic 1963 essay “War, Peace and the State,” recently requoted by Sheldon Richman.

“House of Cards” Is Alive and Real in Maryland

in Liberator Online by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 6 of the Liberator Online. Subscribe here!)

And you thought Netflix’s “House of Cards” was just Frank Underwood - House of Cardsfiction. Reports the Washington Post:

“A few weeks before Season 2 of ‘House of Cards’ debuted online, the show’s production company sent Maryland Gov. Martin O’Malley a letter with this warning: Give us millions more dollars in tax credits, or we will ‘break down our stage, sets and offices and set up in another state.’

“A similar letter went to the speaker of the House of Delegates, Michael E. Busch (D-Anne Arundel), whose wife, Cynthia, briefly appeared in an episode of the Netflix series about an unscrupulous politician — played by Kevin Spacey — who manipulates, threatens and kills to achieve revenge and power.”

Wow! You’ve got to wonder if Frank Underwood himself co-signed those letters.

But then the non-fiction bad guys struck back — with an Underwood-style threat to seize the company’s property if they stopped filming.

No kidding. The Maryland House of Delegates quickly drew up and passed legislation requiring the state to use eminent domain to buy or condemn property owned by a film company that has claimed more than $10 million in state tax credits — if said company stops filming. (Wonder if they had anyone specific in mind?)

Cato’s David Boaz sums it up just right: “It’s hard to imagine a better example of rent-seeking, crony capitalism, and conspiracy between the rich, the famous, and the powerful against the unorganized taxpayers. A perfect House of Cards story.”

Unfortunately, zillion-dollar tax money handouts to wealthy film companies are common practice in most states. All in the interest of creating jobs and stimulating the economy, of course.

In case anyone wants to know, the Tax Foundation reports that film tax incentives “are a net loss to states, and there are plenty of studies demonstrating this” and “every independent study has found that film tax credits lose revenue.”

Not that politicians care. Hey, it’s not their money.