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Crony capitalism may be cannibalizing productive capitalism in the U.S.

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Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#91

Post by xenadu02 »

mowenz wrote: post #48
dv_dt wrote: post #27

Does it seem to anyone else that the finance industry is increasingly distracted from actually matching up capital to fundamentally productive companies, especially new companies? Looking at the stock market, there are few IPOs, and after IPO, being public only provides access to limited access vis issuance of new stock... Some capital flows to VCs, but it seems the more capital flows to large VC funds, the more the…

>Does it seem to anyone else that the finance industry is increasingly distracted from actually matching up capital to fundamentally productive companies, especially new companies? This is somewhat controversial to posit, but I believe the corruption in the financial industry is extraordinarily entrenched because of the Fed. Before you call me a lunatic, smart and good people from Aaron Schwartz to Sanders have said…

Corruption in the financial industry is extraordinarily entrenched because of deregulation, not because of the Fed.

Allowing banks to merge and become huge conglomerates, the elimination of Glass-Stegal (which eliminated the distinction between normal banks and investment banks), and lax regulation of derivatives / dark money are all very direct causes.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#93

Post by api »

CalChris wrote: post #85
api wrote: post #71

Earlier quoted context omitted.

Many people have proposed variations of this as the reason civilizations collapse. They are destroyed by their success. They gain so much surplus that it completely isolates them from any kind of feedback mechanism, over time causing them to completely rot from within. Eventually the core becomes so rotten that the whole system falls apart. This can be sudden. I think an intuitive grasp of this is why so many conserv…

This is about right. Think of the F35 as welfare, a big ugly mistake isolated from consequences yet employing and profiting a professional welfare class.

The F35 is indeed welfare, but it's not the most damaging kind. Things like that represent waste but do little in the way of active harm, and sometimes they can even have side benefits like funding the development of advanced technologies that can find more productive use elsewhere.

The real active harm comes when you get a professional class that does very bad things. These can be mistakes, like the total collapse of the economy in 2008, or they can be intentional crimes. Either way if there are no consequences then no correction gets applied and the problem gets worse.

A large scale wealthy civilization can absorb a tremendous amount of official incompetence and misconduct.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#94

Post by TimPC »

eric_h wrote: post #72
dudul wrote: post #51

Not native english speaker here. My comment is probably of very limited value, but mostly for my personal improvement :). When I read "the wrong kind of entrepreneurs flourish in America" it surprises me to not see: "the wrong kind of entrepreneurs flourishes in America". I understand that "kind" should be the subject of the sentence, not the entrepreneurs. I have seen this construct several times (e.g. "this type of…

You are correct, "kind" is the subject of the sentence and the right conjugation would be "flourishes". You are also correct that it's a very common error that has generally just become acceptable.

"The wrong kind of entrepreneur flourishes in America" would probably be the better title. The article describes a single kind of behaviour. "The wrong kinds of entrepreneur flourish in America" would better describe an article where multiple kinds/distinct groups of behaviors were present.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#95

Post by [deleted] »

RobertoG wrote: post #62
subverter wrote: post #25

"Crony" is so often followed by "capitalism", but it's really just cronyism that's the issue. You can find it in capitalism and you can find it in government. But they go best hand-in-hand. I'd argue that most crony capitalism is made possible only because they can leverage the monopolistic power of their crony allies in government for mutual gain.

I hear frequently the argument that crony capitalism is not really capitalism. And how "real capitalism" would work wonderfully. That always remember me, how, when you argue with a communist, frequently those examples that you bring to the conversation are never "real communism".

[deleted]

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#96

Post by sharemywin »

ithinkinstereo wrote: post #15

Most rent-seekers are at least operating within the boundaries of law and physics, if not ethics. Compare that to scam-preneurs behind startups like Theranos or uBeam, or vc-hustle-preneurs behind is-this-satire startups like Juicero, June, etc.

That's like saying it's ok to rob you because at least I didn't kill you like the other guy wanted to.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#97

Post by germinalphrase »

dudul wrote: post #51

Not native english speaker here. My comment is probably of very limited value, but mostly for my personal improvement :). When I read "the wrong kind of entrepreneurs flourish in America" it surprises me to not see: "the wrong kind of entrepreneurs flourishes in America". I understand that "kind" should be the subject of the sentence, not the entrepreneurs. I have seen this construct several times (e.g. "this type of…

You're correct.

It would be better to say "entrepreneurs of the wrong kind flourish in America" - but that might sound odd or overly formal to everyday speakers.

It's similar to the rule about ending your sentence in a preposition. It's incorrect, but it also sounds more natural in many instances.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#98

Post by theseatoms »

arcanus wrote: post #40
jbooth wrote: post #28

Earlier quoted context omitted.

That theory falls under the Econ 101 fallacy -- assuming perfect information dispersal, instant job-switching, instant production ramping.. "First, let's assume the cow is a sphere".

> "First, let's assume the cow is a sphere". It is worse than that, because at least physics is validated by experimental data. Much of (macro in particular) Economics is a set of axioms that are seldom predictive.

Yes. Macroeconomics is secular theology. The global economy is so vast and interconnected that basically none of the theory can be scientifically tested.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#99

Post by xenadu02 »

balls187 wrote: post #35
dreamdu5t wrote: post #11

You can't get $10k to start a hot dog stand but you can get billions of dollars with literally no plan for profit if you're already rich or seeking VC. But want to start a normal business? No capital for you! And your taxes will pay for the banks and VCs when they screw up.

I get that this is hyperbole, but: 1. There are plenty of US Government (i.e. tax payer funded) programs to help people get "normal" ideas off the ground. From grants, to loans, the money is there. It's hard to imagine someone destined for success being stopped by not being able to raise $10k. $10k in credit card debt is nothing for the average american. 2. Success breeds success. If you're rich, you may already have…

> 1. There are plenty of US Government (i.e. tax payer funded) programs to help people get "normal" ideas off the ground. From grants, to loans, the money is there. It's hard to imagine someone destined for success being stopped by not being able to raise $10k. $10k in credit card debt is nothing for the average american.

You've obviously never tried this. It would be a full-time job for a year to even have a shot at these supposed grants. The money is absolutely not there the way you claim.

The younger you are the less credit history you have which makes getting loans almost impossible unless you already have collateral to pledge against the loan.

Oh and $10k is often not nearly enough capital to start a business since you need to pay your own bills while you bootstrap the business. We get away with it in tech often because we have the luxury of working after-hours as a side-project to start with. A customer-facing business can't do that.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#100

Post by mowenz »

voice_of_reason wrote: post #67
mowenz wrote: post #48

Earlier quoted context omitted.

>Does it seem to anyone else that the finance industry is increasingly distracted from actually matching up capital to fundamentally productive companies, especially new companies? This is somewhat controversial to posit, but I believe the corruption in the financial industry is extraordinarily entrenched because of the Fed. Before you call me a lunatic, smart and good people from Aaron Schwartz to Sanders have said…

"Before you call me a lunatic" You're very close to being a lunatic and conspiracy theorist, sir. "This is somewhat controversial to posit, but I believe the corruption in the financial industry is extraordinarily entrenched because of the Fed." After TARP and bailouts it's not controversial at all.

The former and latter comments of yours in this post don't appear to agree with each other. Am I missing something?
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