Friday, November 28, 2008

The New Beggar Economy

Once again Charles Krauthammer has managed to synthesize a complex issue into a coherent short commentary. The topic of his column this week is the new phenomenon that has developed in corporate America. Whereas in the past you succeeded by making a profit, the new model requires the right connection with Washington to get part of the subsidies. This will change the nature of lobbying from pushing for a break in taxes or the regulatory process to pushing for the actual survival of the corporation.

The Obama administration, which ran under the promise of change and curtailing the power of lobbyists, will actually face an army of petitioners as no administration has ever faced before. How those beggars are handled will determine the nature of our market economy.

The sooner we rediscover that loses and bankruptcies are the method by which the market determines winners and losers, the sooner we will get out of the current economic mess.

I am not holding my breath waiting.

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