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Crony capitalism collapses in Spain

From the time he burst onto the political scene as a leading Presidential candidate, Barack Obama has tried to convince us that he is a firm believer in free enterprise: "I believe in the free market. I believe in capitalism. I believe in free trade. I am not worried about us being able to compete anywhere on earth with American workers."

Yet his policies indicate a different set of beliefs. Barack Obama believes in "capitalism," but not in free markets. Instead, Obama's faith lies in crony capitalism or mercantilism, if you prefer -- an unholy alliance between business and government in which Big Business attempts to corner its share of the market by negotiating with Big Government for laws and regulations that guarantee generous corporate welfare and squeeze out smaller competitors. Big Labor is also involved, as it negotiates generous pay and "Cadillac" benefits for its blue collar Big Business employees, all of which of course are dependent upon Big Government largess, via guaranteed contracts, tax exemptions, regulations, fees, and mandates.

Because mercantilism inevitably causes a significant sector of the economy to be planned and controlled by the government, individuals lose a considerable portion of the freedom to choose how their money is spent. The end result is very similar to that of socialism -- continual wealth transfers (i.e. taxes) from the private, non-mercantile sectors of the economy, or heavy government borrowing, in order to pay for the government expenditures necessary to prop up a crony capitalist economy.

America has been wealthy enough to be able to afford limited crony capitalism in specific, heavily subsidized areas of our economy like agriculture, steel, and coal. But through directed administration initiatives like TARP, the bailout (and subsequent acquisition) of GM and Chrysler, ObamaCare, the current Wall Street "reform" bill, and the looming Cap and Trade bill, President Obama has made it abundantly clear that he intends to establish a deep and permanent crony capitalist relationship between the Federal Government and Big Business leaders in the automotive, financial, health care, and energy sectors of our economy. Together, these sectors represent over half of our GDP. And despite the assurances from the administration, such a collusion between government and business won't simply be "too big to fail" -- it will be guaranteed to fail.

I present, for your consideration, the case of Spain and its much-touted "green economy" program, through which the Spanish government heavily subsidized the conversion of much of the nation's energy production infrastructure from oil and gas to less efficient and much more costly "green" energy production systems, such as solar power and wind turbines. (...insert Don Quixote joke here ...) President Obama has repeatedly used Spain as an example of a government that has "harnessed their people's hard work and ingenuity with bold investments - investments that are paying off in good, high-wage jobs - jobs they won't lose to other countries."

But the emerging truth about Spain belies such pie-in-the-sky promises: "Spain admits that green energy as sold to Obama is a disaster"

On eight occasions, the occupant of the White House referred to the Spanish model as an example to follow. The paradox is that it is a model that Obama himself wants Spain to abandon, as made clear in his call to [Spanish Prime Minister] Zapatero last week in which he asked him to change his strategy on the crisis.

The internal report of the Spanish administration admits that the price of electricity has gone up, as well as the debt, due to the extra costs of solar and wind energy. Even the government numbers indicate that each green job created costs more than 2.2 traditional jobs, as was shown in the report of the Juan de Mariana Institute. Besides that, the official document is almost a copy point by point of the one that led to Calzada being denounced [lit. "vetoed"] by the Spanish Embassy in an act in the U.S. Congress.

The presentation recognizes explicitly that "the increase of the electric bill is principally due to the cost of renewable energies." In fact, the increase in the extra costs of this industry explains more than 120% of the variation in the bill and has prevented the reduction in the costs of conventional electricity production to be reflected on the bills of the citizens.

If the document indicates that the development of renewable energies has had a positive impact, especially in the reduction of emissions, it has also admitted that the evolution has been too fast, due to subsidies.

... The government itself says that the alternative energies sector will receive 126 billion euros in the next 25 years. Just an example: The owners of solar plants make 12 times more than what they pay for the energy coming from fossil fuel combustion. The majority are subsidies charged to the consumer.

The conclusion is that with the economy at the point of bankruptcy, it is not possible to keep injecting money in such a costly sector. And the government seems to realize this now.

A complete English version of the draft academic report, which was released in March 2009, is available in PDF form.

The collapse of the Greek economy due to its heavily subsidized public welfare system and the shakiness of the European Union are clear indicators that President Obama's precious European-style social and economic engineering schemes are the true "failed economic policies of the past." Hopefully he will get a reminder of that fact this coming November.


You should also check out this fantastic segment of Bill Whittle's "Afterburner" which explores the contrasts between free market and crony capitalism, and then marvel at the logic and eloquence of the late Milton Friedman as he valiantly defends the free market economic system in his classic encounter with uber-liberal Phil Donohue.


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Comments (17)

Michael, he's not going to ... (Below threshold)

Michael, he's not going to change. Short of a lobotomy. Barry has been inculcated with socialist theory and practice all his life. Nothing else exists. He is living proof of 'social justice'. It got him where he is today.

Indeed. Barry believes ver... (Below threshold)
jim m:

Indeed. Barry believes very much in his own infallibility. He will not accept error on his own part, but will always find a way to place blame on someone else and then have them take the fall.

Like other leftists he will see Spain's failure not as a failure of the policy, but a failure of execution. They were insufficiently leftist in their execution of the idea. Barry is an ideologue. His ideas are never wrong. People only fail to implement them properly.

I fully expect him to plunge full speed ahead on his green jobs BS. His ideas have to be right. He cannot be wrong. To consider the possibility of being wrong is to threaten the very foundations on which his personality and his perception of the universe is founded upon. Most of the rest of us are able to contemplate error and reconsider our beliefs in the face of new evidence. Obama cannot. He has never demonstrated the ability to do so, not in Illinois, not n the White House.

I would note that "Crony Ca... (Below threshold)

I would note that "Crony Capitalism" is indistinguishable from the economic basis of facism. Just read Albert Speer's book, pretty much the same same thing.

You know what I did see in ... (Below threshold)

You know what I did see in this document, was that as the governments 'forced' the change they were so much as not allowing for the natural flow while mandating and subsidising the change which caused the elimation of the usual methods of production of electricty while not comtemplating the regular growth of world poulation.
This cause, in other words, without government interferance electrical demands should normally go up and the only way the government's can economicaly increase ele. supply with green style of ele. production would be a moratorium on hydrocarbon based types preferring instead new green ele.. This would cost no old jobs and actually increase the number of energy related new jobs.

In my own thoughts; once again the rush to forced change, over a more natural approach shows the ADHD menality and tactics that this world multiplex of government's have taken to try and prove this freaked out ideaology of a one world government. Ok so that thought might be nuts.

But I really agree with what I think your point is. Corporate crony-ism is certainly a failure.

Piece in the paper this mor... (Below threshold)

Piece in the paper this morning about the BIG GREEN electrical solar generators that are to be planted on 10 square miles of federal land in the desert. Going green. But the environmentalists (who think GREEN) are screaming that a desert lizard's habitat will be irreparably damaged. And then there's the problem of transporting the electricity. They have one line that can handle part of it. They need to build a second line for the rest of it. And of course the environmentalists are screaming "No you're not!".

In the mean time, the same environmentalists are screaming to close down ALL the generating plants along the coast because the cooling intakes are killing fish.

Barry had better get those carbon-free, pollution-free, multi-colored unicorn electrical generators up and running before summer gets here!

The greatest irony of the E... (Below threshold)
Tsar Nicholas II:

The greatest irony of the Eurozone heading for bankruptcy and massive civil strife is that American neo-Marxists, and that would include Obama, can't even grasp the irony.

Agree with #5, by any defin... (Below threshold)

Agree with #5, by any definition Obamalini is running a Facist government, even his robots would have a hard time disagreeing.

"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power. All within the state, nothing outside the state, nothing against the state."

Italian fascist Benito Mussolini

GM, Chrysler, the banks, health care, etc., all these to remain in "private" hands with government oversight..classic Il Dulce.

Meant to agree with #3 and ... (Below threshold)

Meant to agree with #3 and Facism..good book btw, but also agree with 5 LOL.

Deke and Brett,I w... (Below threshold)

Deke and Brett,

I wanted to avoid "going Godwin", but you are correct. At the heart of National Socialism and Fascism lies the belief that free markets are unstable and untrustworthy, and must be closely regulated by governments in order to ensure fairness.

The difference between fascism/socialism and communism is that fascist states do not wish to own the means of production. They are willing to leave private ownership of businesses in place, but they rely on extensive regulation as a means of total economic control. In the end, people under the fascist/socialist system are just about as limited in their freedom of choice with respect to how much money they have to save/spend and where they can spend/invest it, as those living in a communist state.

For anyone interested, I wrote about this at length last year.

Characteristics of Fasci... (Below threshold)

Characteristics of Fascist Philosophy

Fascism, especially in its early stages, is obliged to be antitheoretical and frankly opportunistic in order to appeal to many diverse groups. Nevertheless, a few key concepts are basic to it. First and most important is the glorification of the state and the total subordination of the individual to it. The state is defined as an organic whole into which individuals must be absorbed for their own and the state's benefit. This "total state" is absolute in its methods and unlimited by law in its control and direction of its citizens.

Another element of fascism is its elitism. Salvation from rule by the mob and the destruction of the existing social order can be effected only by an authoritarian leader who embodies the highest ideals of the nation. This concept of the leader as hero or superman, borrowed in part from the romanticism of Friedrich Nietzsche , Thomas Carlyle , and Richard Wagner , is closely linked with fascism's rejection of reason and intelligence and its emphasis on vision, creativeness, and "the will."

Pretty scary stuff when Obamalini is standing with his chin stuck out, reading from the teleprompter with his ring of sychophants cheering him on.

Michael - I saw that piece ... (Below threshold)

Michael - I saw that piece and nicely stated it was. I had come to the same conclusion and watching the events of the last year has confirmed it entirely. I just wanted to make clear what the parent post was really referring to - we don't need the phrase "crony capitalism", when we have a perfectly good existing phrase - fascism.

I chose my words carefully to avoid Godwin's law. I actually don't equate Obama and company with the Nazis. For many of the same reasons people usually state. The Nazis were fascists, and that was bad. But they were so over-the-top evil on so many levels it's still impossible to fathom. I have NO notion that Obama and co. are interesting in systematic genocide, nor that they would ever be able to engage millions of americans to assist in that.

And, if nothing else, the Nazis were deadly efficient and effective at what they wanted to do. No one can accuse Obama and his crew of being efficient, or even competent. Quite the opposite, they are bumbling incompetents, keystone cops level. If they are Nazis, they are Col. Klink, not Adolf Eichmann. And while they are pseudo-intellectual elitists, they are *effete* pseudo-intellectual elitists. The Nazis were largely street thugs.

If there were an analogy to be drawn it would be with Mussolini, but even that is a stretch.

"If they are Nazis, they ar... (Below threshold)

"If they are Nazis, they are Col. Klink, not Adolf Eichmann."

LOL - good one, Brett.

HiYou DO see the p... (Below threshold)


You DO see the pyramid scheme symbol on the back of the USA one dollar bill, right? You DO see the servitude infestation in capitalism, right? And do you see the "pay up or lose your wellbeing" Chicago mob-like felony extortion widespread within capitalism? Do you see the "join or starve" felony extortion done to the 18 year olds... by this ugly competer's church called capitalism? See how forcing competer's religions onto 18 year olds... kills membership in the cooperator's church (Christianity/socialism)?? Do you understand that AmWay (American Way) (New World Order) got "the exclusive" (legal tender) on the TYPE of survival coupons (money) accepted in supply depots (stores) and leverages 18 year olds into the organization via that felony activity as well? (It puts AmWay-coupon slaving requirements called price tags... on all the survival goods). Do you understand how farmyard pyramids work... from your childhood?? Remember?? Upper 1/3 are "heads in the clouds" while the kids on the bottom ALWAYS GET HURT from the weight of the world's knees in their backs? Still with me? Do you see anything illegal, immoral, or just plain sick... in any of this pyramid scheme's activities?

Us American Christian socialists are still patiently awaiting the natural fall of the pyramid-o-servitude, or the busting of the free marketeers felony... by the USA Dept of Justice. Us Christians are VERY CLOSE to issuing a cease and desist order until the servitude and inequality goes away... which means it turns into a commune. Commune is a word we LOVE when used in the word "community"... but its one the caps HATE when used in the term "commune-ism". Go fig. PROGRAMMED!!

Do a Google IMAGE SEARCH for 'pyramid of capitalist' to see a full color picture made way back in 1911, when capitalism was first discovered to be a con/sham instigated by the Free Masons/Illuminati. Folks sure bought into the thing... hook, line, and sinker just the same. The caps didn't even check if a string was attached! Now THAT'S easy fishing, eh?

Time to level the felony pyramid scheme called capitalism. Abolish economies and ownershipism worldwide, and hurry. Economies just cause rat-racing, and rat-racing causes felony pyramiding. BUST IT, America! Look to the USA military supply/survival system... (and the USA public library system) for socialism and morals done right. Equal, owner-less, money-less, bill-less, timecard-less, and concerned with growth of value-criteria OTHER THAN money-value. Quit doing monetary discrimination immediately, and make it illegal. There are MANY measurement criteria of "value"... not just dollars. Try morals, efficiency, discrimination-levels, repairability, etc etc. Economies are cancerous tumors, and to cheer for their growth... is just insane. Profiting causes inflation, so if caps LIKE inflation, and if they LIKE a terrible time in afterlife when they meet the planet's ORIGINAL OWNER before caps tried to squat it all with ownershipism, then keep it up with the felony pyramiding. I dare you. While us Christians are finally bulldozing that pyramid scheme back to level, lets make servitude and "join or starve" (get a job or die) illegal in the USA, and lets level the architecture seen in USA courtrooms, too. Right now, USA courtrooms are church simulators or "fear chambers", by special design. Sick.

Isn't that back-of-the-dollar pyramid... a Columbian freemason symbol? And WHERE is the USA gov located? District of Columbia? (Not even part of the USA!) How much more blatant can ya get? The "Fed" runs a pyramid scheme called the free marketeers. If you're using the "federal reserve note" certificates, or using no-other-living-thing-on-the-planet entitles of ownership, you're bought into a servitude/slavery con/sham... called capitalism. Pyramiding 101.

Larry "Wingnut" Wendlandt
MaStars - Mothers Against Stuff That Ain't Right
Bessemer MI USA

"Larry "Wingnut" Wendlandt"... (Below threshold)

"Larry "Wingnut" Wendlandt" = Obama's internal dialog? Discuss.

Not to point fingers, that'... (Below threshold)

Not to point fingers, that's Barry's specialty, but someone's off their meds.

But, Larry, how will you ev... (Below threshold)
bobby b:

But, Larry, how will you ever get anyone to go to work under your non-system?

The vast majority of humanity, if guaranteed a sufficient minimum level of food and housing and entertainment access, will gladly flop back on the sofa and munch Cheetos and watch Lifestyles Of The Rich And Famous all day long, every day.

One man's incentive is another's coercion, I guess.

The vast majority ... (Below threshold)
The vast majority of humanity, if guaranteed a sufficient minimum level of food and housing and entertainment access, will gladly flop back on the sofa and munch Cheetos and watch Lifestyles Of The Rich And Famous all day long, every day.

Oh, Larry has an answer for that one - once his socialist wonderland comes to pass, there will be no "Rich and Famous" - so you can't watch a show about them! Got you there, didn't he? Once again relentless logic proves inescapable.

I'm going to work on a unicorn farm, myself.






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