Posts tagged crony
By Andy Booker
Democrats are shocked to see President Obama treat Wall Street’s top banks with respect and kindness. In order to predict his kindness (Obama’s justice department has failed to prosecute the crimes that helped lead to the financial crisis of 2008) towards the top financial institutions it didn’t take a crystal ball, all it took was a list of his top donors which included Goldman Sachs, JP Morgan and Citigroup. Applying this same logic to the GOP primary election Romney is the candidate that will likely be buddy-buddy with Wall Street. Mitt Romney’s top ten is made up of Goldman Sachs, followed by Credit Suisse (Switzerland), Morgan Stanley, Barclays (UK), Bank of America and JP Morgan. In contrast Romney’s co-frontrunner in Iowa, Ron Paul, has a top three donor list made up of the US Army, US Navy and US Airforce.
Obviously Goldman Sachs and company donate heavily to Romney not because they like his stance on the social issues but because he will continue the rigged game of crony capitalism. The revolving door from Wall Street (particularly from Goldman Sachs) to the White House will remain open and Goldman and company will maintain not only their rigged game but their influence.
The active duty military that make up Ron Paul’s top donor list are attempting to send a signal to the American people that Ron Paul’s foreign policy is the right choice.
So yes Romney and Paul are in a race to get the nomination from the same party but they could not be more polar opposites when it comes to their intentions for the Presidency.
Perhaps this is why Romney has not yet attacked Ron Paul directly. Attacking Ron Paul opens Romney up to a direct debate with Ron Paul on the issues. Such a debate would draw a clear distinction between Romney and Paul on the issues that a majority of the electorate, particularly the issue of support for TARP and future bank bailouts.
In October Milwaukee Story published this article that broke down Romney’s pledge to continue US interventionist/first-strike foreign policy. That foreign policy white paper was an additional signal to Wall Street that Romney was a safe bet as an establishment candidate and could be trusted to pull from Washington and Wall Street establishments to fill his cabinet posts.
It is critical to understand that even though Goldman Sachs tops Romney’s donor list does not mean they are lining up all of their resources behind Romney alone. Goldman has also donated heavily to Obama’s reelection campaign. And while this may signal a subtle divide in the Goldman ranks, a more likely scenario is that Goldman is simply hedging their bets and lending their Wall Street credibility to each candidate that they believe will allow the crony capitalism necessary for them to continue their winning ways.
Now more than every we need the Champion of the Constitution!
Please visit Ron Paul’s official campaign site by following the link below and donate today!
by John Nichols
John Nichols is the author of several books that examine the legacy of old-right conservatives such as Taft and Buffett, including Against the Beast: A Documentary History of American Opposition to Empire.
Ron Paul represents the ideology that Republican insiders most fear: conservatism.
Not the corrupt, inside-the-beltway construct that goes by that name, but actual conservatism.
And if he wins the Iowa Republican Caucus vote on January 3—a real, though far from certain, prospect—the party bosses will have to do everything in their power to prevent Paul from reasserting the values of the “old-right” Republicans who once stood, steadily and without apology, in opposition to wars of whim and assaults on individual liberty.
Make no mistake, the party bosses are horrified at the notion that a genuine conservative might grab the Iowa headlines from the false prophets. Already, they are claiming a Paul win won’t mean anything. If Paul prevails, says Iowa Governor Terry Branstad, “People are going to look at who comes in second and who comes in third. If [Mitt] Romney comes in a strong second, it definitely helps him going into New Hampshire and the other states.”
The party’s amen corner in the media is doing its part. Republican-insider radio and television programs have begun to go after Paul, the veteran congressman from Texas who is either leading or near the top in recent polls of likely caucus goers. Rush Limbaugh ridicules Paul on his radio show, while Sean Hannity’s Fox show has become a nightly Paul-bashing fest, with guests like former Education Secretary Bill Bennett trashing the congressman with lines like: “his notion of foreign policy is impossible.”
Actually, Paul’s notion of foreign policy is in line with that of conservatives used to believe. The congressman is often referred to as a libertarian, and he has certainly toiled some in that ideological vineyard. But the truth is that his politics descend directly from those of former Ohio Senator Robert “Mr. Republican” Taft and former Nebraska Congressman Howard Buffett—old-right opponents of war and empire who served in the Congress in the 1940s and 1950s and who, in Taft’s case, mounted credible bids for the party’s presidential nomination in 1940, 1948 and finally in 1952. In all three campaigns, Taft opposed what he described as the “Eastern establishment” of the party—the Wall Streeters who, he pointedly noted, had little in common with Main Streeters.
Taft was a steady foe of American interventionism abroad, arguing very much as Paul does today that it threatens domestic liberty. Indeed, just as Paul joined US Senator Russ Feingold in opposing the Patriot Act, spying on Americans and threats to freedom of speech and assembly in the first days of what would become an open-ended “war on terror,” so Taft warned during the cold war that “criticism in a time of war is essential to the maintenance of any kind of democratic government.”
“The maintenance of the right of criticism in the long run will do the country…more good than it will do the enemy,” explained Taft, who challenged President Truman’s attempts to use war powers as an excuse to seize domestic industries and otherwise expand what Dwight Eisenhower would eventually define as the military-industrial complex.
Obama raised more money from the financial industry than any other candidate in American political history.0
A Lesson about Crony Capitalism for the OWS Crowd
Unless you identify your economic enemy correctly, you cannot succeed in defeating him. The typical Occupy Wall Street sap, the radical left’s modern incarnation of the useful idiot, thinks his enemy is an evil Wall Street billionaire.
But Wall Street banking firms did not survive the financial collapse of 2008 — virtually unscathed — by bailing themselves out. With only one major exception (Lehman Brothers), incompetently managed banks were not forced into bankruptcy by the government. Bondholders and shareholders were not told to pick up their crumbs, suffer debilitating losses, and learn their lesson for the next time.
No, the government, the same irresistible and evil force that OWS now wants to manage our entire economy, decided instead to bail out the banks. Taxes paid by the occupiers, or more likely their parents, were looted to accomplish this. The government chose to double down on moral hazard. Goldman Sachs, GE, AIG, and their ilk were unjustly saved and rewarded by the government for their mismanagement, with democrats leading the charge. Democrats voted overwhelming for TARP, while the republicans largely demurred.
The Democrats in government played first economic responder because their power is sustained by the largely Democrat donor base that comprises Wall Street and hedge fund royalty. Virtually everyone on Wall Street comes from same the leftist universe as the occupiers. John Mack, Chairman of Morgan Stanley was a Hillary supporter and fundraiser. Jamie Dimon, CEO of JP Morgan, was an Obama supporter and fundraiser. Wall Street is a leftist Democrat playground , as surely as is San Francisco.
Comrade Obama raised more money from the financial industry than any other candidate in American political history. Indeed, Obama amassed a treasure trove so vast from these and other mega-wealthy donors (like labor unions) that he decided to forego public financing of his campaign, a first for presidential nominees since the system began.
The presidential candidate’s signature economic development initiative has raised questions among conservatives.
Gov. Rick Perry’s presidential pitch goes something like this: During one of the worst recessions in American history, he’s kept his state “open for business.” In the last two years, Texas created over a quarter of a million jobs, meaning that the state’s 8% unemployment rate is substantially lower than the rest of the nation’s. The governor credits this exceptional growth to things like low taxes and tort reform.
It’s a strong message. But one of the governor’s signature economic development initiatives—the Texas Emerging Technology Fund—has lately raised serious questions among some conservatives.
The Emerging Technology Fund was created at Mr. Perry’s behest in 2005 to act as a kind of public-sector venture capital firm, largely to provide funding for tech start-ups in Texas. Since then, the fund has committed nearly $200 million of taxpayer money to fund 133 companies. Mr. Perry told a group of CEOs in May that the fund’s “strategic investments are what’s helping us keep groundbreaking innovations in the state.” The governor, together with the lieutenant governor and the speaker of the Texas House, enjoys ultimate decision-making power over the fund’s investments.
Among the companies that the Emerging Technology Fund has invested in is Convergen LifeSciences, Inc. It received a $4.5 million grant last year—the second largest grant in the history of the fund. The founder and executive chairman of Convergen is David G. Nance.
In 2009, when Mr. Nance submitted his application for a $4.5 million Emerging Technology Fund grant for Convergen, he and his partners had invested only $1,000 of their own money into their new company, according to documentation prepared by the governor’s office in February 2010. But over the years, Mr. Nance managed to invest a lot more than $1,000 in Mr. Perry. Texas Ethics Commission records show that Mr. Nance donated $75,000 to Mr. Perry’s campaigns between 2001 and 2006.
The regional panel that reviewed Convergen’s application turned down the company’s $4.5 million request when it presented its proposal on Oct. 7, 2009. But Mr. Nance appealed that decision directly to a statewide advisory committee (of which Mr. Nance was once a member) appointed by Mr. Perry. Just eight days later, on Oct. 15, a subcommittee unanimously recommended approval by the full statewide committee. On Oct. 29, the full advisory committee unanimously recommended the approval of Convergen’s application. When asked why the advisory committee felt comfortable recommending Convergen’s grant, Lucy Nashed, a spokesperson for Mr. Perry, said that the committee “thoroughly vetted the company.”
Starting in 2008, Mr. Perry also appropriated approximately $2 million in federal taxpayer money through the auspices of the Wagner-Peyser Act—a federal works program founded during the New Deal and overseen in Texas by Mr. Perry’s office—to a nonprofit launched by Mr. Nance called Innovate Texas. The nonprofit was meant to help entrepreneurs by linking them to investors. It began receiving funding on Dec. 31, 2008, soon after Mr. Nance’s previous company, Introgen Therapeutics, declared bankruptcy on Dec. 3. According to state records, Mr. Nance paid himself $250,000 for the two years he ran Innovate Texas. Innovate Texas, whose listed phone number is not a working number, could not be reached for comment. (Two phone calls left for Mr. Nance at Convergen’s offices went unreturned.)
ThromboVision, Inc., a medical imaging company, was also the recipient of an award from the Emerging Technology Fund: It received $1.5 million in 2007. Charles Tate, a major Perry contributor, served as the chairman of a state committee that reviewed ThromboVision’s application for state funding, and Mr. Tate voted to give ThromboVision the public money. One month after ThromboVision received notification that it would receive a $1.5 million state grant in April 2007, Mr. Tate invested his own money in ThromboVision, according to the Dallas Morning News. The Texas paper later found that by 2010 Mr. Tate owned a total of 200,000 preferred shares in ThromboVision.
According to a Texas state auditor’s report, ThromboVision failed to submit required annual reports to the fund from 2008 through 2010, when the company went bankrupt. The report noted the tech fund’s managers were “unaware of ThromboVision, Inc.’s bankruptcy until after the bankruptcy had been reported in a newspaper.” ThromboVision’s bankruptcy filing revealed not only that Mr. Tate had been a preferred shareholder in ThromboVision, but so had prominent Perry supporter Charles Miller, who owned 250,000 preferred shares in the company and has donated $125,000 to the governor’s campaigns. Three phone calls and an email seeking Mr. Tate’s side of the story went unreturned.
All told, the Dallas Morning News has found that some $16 million from the tech fund has gone to firms in which major Perry contributors were either investors or officers, and $27 million from the fund has gone to companies founded or advised by six advisory board members. The tangle of interests surrounding the fund has raised eyebrows throughout the state, especially among conservatives who think the fund is a misplaced use of taxpayer dollars to start with.
“It is fundamentally immoral and arrogant,” says state representative David Simpson, a tea party-backed freshman from Longview, two hours east of Dallas. The fund “opened the door to the appearance of impropriety, if not actual impropriety.”
In April, the state auditor’s office called for greater transparency in the fund’s management, and some legislators began looking for ways that the fund might be reformed. With the state facing a $27 billion budget shortfall in the last legislative session, Mr. Simpson filed a motion in the Texas House in May to shutter the fund and redirect the money to other portions of the budget. That measure passed 89-37 to cheers from the chamber. But the fund was kept alive by the legislature’s conference committee. The fund currently has $140 million to spend, according to the governor’s office.
Michael Quinn Sullivan, the president of Texans for Fiscal Responsibility, sees in the Emerging Technology Fund a classic example of the perils of government pork. “The problem with these kinds of funds is that even when they’re used with the best of intentions, it looks bad,” says Mr. Sullivan. “You’re taking from the average taxpayer and giving to someone who has a connection with government officials.”
Mr. Dameron is a Robert L. Bartley Fellow at the Journal.