AlanGustin Blog2

Party of Capitalism vs Party of Corporatism

Posted in news, Politics by alangustin on March 20, 2012
From the Washington Examiner

When President Eisenhower appointed General Motors CEO Charles Erwin Wilson to be Secretary of Defense, many people questioned whether he could objectively serve in Eisenhower’s administration, considering his close ties to GM.

Wilson told the U.S. Senate not to worry “because for years I thought what was good for the country was good for General Motors and vice versa.”

Wilson’s line, more commonly misquoted as “what’s good for GM is good for America,” has become an aphorism for corporatism in America, a style of governing that has become far too accepted by both parties in Washington.

President George W. Bush was the most recent Republican who governed as an unabashed corporatist. “I’ve abandoned free-market principles to save the free-market system,” Bush told CNN in defense of his decision to initiate the General Motors and Chrysler bailouts in 2008.

Many Americans see no difference between corporatism and capitalism. This is unfortunate, because in practice they are polar opposites. When President Carter was considering the first bailout of Chrysler in 1980, Nobel Prize-winning economist Milton Friedman argued against it.

Friedman’s reasoning was that “the private market system is a system of profit and loss. And the loss part is just as essential as the profit part. It is a disgrace that we should be bailing out Chrysler.”

But we did bailout Chrysler. First in 1980 and again in 2008. And along the way we also bailed out Continental Illinois, the Federal Savings and Loan Insurance Corp., Fannie Mae, Freddie Mac, Bear Stearns, AIG, Citigroup, etc., etc.


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