Crony Capitalism


“Crony capitalism is a description of a capitalist society as being based on the close relationships between businessmen and the state. Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the ruling government in the form of tax breaks, government grants and other incentives. “  –Investopedia definition

Welcome to 21st century America.


Recently made public is Warren Buffett’s Berkshire Hathaway fund is owned by several key congressman who were also TARP architects and Mr. Buffet helped shape the bailout legislation that saved him. Without the four hundred and eighty billion used to bail out a variety of industries, the Berkshire Hathaway fund would have lost more than fifty percent of its value. Enormous conflicts of interest between Obama, Timothy Geithner, TARP architects, several members of Congress, and Warren Buffet are coming to light. It’s irrefutable that crony capitalism is the soup du jour in Washington D.C.


Crony capitalism attacks the wealth of the most important class of people within American society: the middle class. How? It artificially skews societies’ natural flow of capital to those that can buy political influence instead of letting free market principles pick winners and losers. The unintended costs of all crony capitalism is the destruction of natural expansive economic forces. Nearly all economic historical expansion within the United States can be attributed to middle class wealth creation. Anytime a private elite chooses to fiscally shape state/federal legislation for the growth/preservation of their wealth , e.g. Buffet influencing TARP legislation, the underlying result warps the size of all economic classes and artificially consolidates wealth. Crony capitalism grows the impoverished  class, contracts the all important middle class, and furthers the consolidation of wealth within the Elite Class.


With the ongoing manipulation of wealth distribution by the elite, middle class producer’s hope of grasping and reaping the rewards of the American Dream fade. This pursuit is solely dependent upon wealth accumulation and quickly becomes a hopeless endeavor within a crony capitalistic society. The end result forces middle class citizens to refocus on wealth preservation equating to less borrowing and further stagnation with the American based credit economy.


Modern man has existed on Earth for approximately 200,000 years. During this time, immense struggles brought on by Earths’ geological changes, destructive famine, and insidious disease have honed man’s instincts in the pursuit of bettering his situation. Fast forward to the dawn of the Industrial Age and one witnesses the height of man’s ingenuity, labor, and cunningness at work.

Hundreds of thousands of years of intense human struggle to survive and thrive all lead to our existence in modern society. The system that was born out of civility, rule of law, productivity, man’s incentives, and how best to encapsulate human ingenuity within the confines of civil order is Capitalism.


Middle class citizens will someday have to decide is it worth throwing out the America that your parents, grandparents, and great grandparents fought and died for in exchange for the expansion of economic injustice. Is the average American citizen losing respect and honor of past generational struggles to acquire the American dream? Can 21st century citizens even comprehend the historical sacrifices which resulted in the powerful America of modern-day? Try to imagine the immense struggles during times of no high-tech, the lack of modern conveniences, and an ill-equipped communication infrastructure. If the largest class within American society throws in the proverbial white towel, the US Constitution, the Declaration of Independence, and all of The Federalist Papers might as well be put in a big dumpster, drenched with gasoline, and torched so American society can toast marshmallows on the flames of our own demise.

4 Responses So Far... Leave a Reply:

  1. Thanks for discussing your ideas. Another thing is that pupils have a choice between government student loan plus a private education loan where it can be easier to opt for student loan consolidating debts than over the federal student loan.

    • Matt says:

      I like your idea here but I’d take it one step further. Get the government out of educational lending period. I’d rather opt for private businesses pooling their money together, per industry, and setting up borrowing programs. This way, someone wanting to go to college to study a certain discipline would apply for grants/loans within that particular industry. With a record number of college students not paying their student loans back, the taxpayer needs to get out of the funding education business. Sounds harsh but, in the long run, is the right thing to do.

  2. Spot on with this write-up, I really assume this website wants rather more consideration. I’ll probably be again to read way more, thanks for that info.

    • Matt says:

      Go ahead and critique at will, if so inclined. This site is built around the premise of open dialogue, the sharing of ideas, and furthering our understanding of society and how best to thrive within it! Thanks for the positive post and keep on coming back!