Have Political Parties Replaced Principles?
Do you think Americans have become too partisan?
Last week Congress passed a $1 trillion spending bill.
In doing so, it brought to the front burner of public attention the controversy over crony capitalism.
Once again, we are forced to ask:
What business does the government have protecting corporations from failure?
Here’s a critique of the Cromnibus bill by A. Barton Hinkle in Reason.com. He is particularly concerned with the removal of a rule that would have prevented bank bailouts:
The Cromnibus removes that barrier to bailouts. As Warren has noted several times, the relevant provision repeals a part of the law titled, “Prohibition Against Federal Government Bailouts of Swaps Entities.” Most people understand why it’s not a good idea to bail out financial institutions for making risky bets: It only encourages them to assume more risk than they otherwise would. If they bet right, then they get to keep the profits; if they bet wrong, then the taxpayer gets stuck with the bill. Warren is right to oppose such moral hazard.
It is a bit odd that the mainstream Republican leadership didn’t fight this provision on the grounds of limiting government expansion and avoiding taxpayer liability for risky private sector activities.
What could be their motivation?
Is it simply to silence the voice of the Tea Party activists in their party, thereby retaining power?
The Life Insurance Lobby
I am very familiar with how political entities fight to serve their self interest only. My own industry has a tremendously powerful lobby that tries to make sure onerous tax laws stay in place.
Life insurance can be an effective way to meet these obligations, so these laws are actually good for business. However, as a citizen, a consumer, and a taxpayer, I can do without them.