"Crony capitalism" - what's in that name?

Sarah Palin and Rep. Michelle Bachmann have recently been lambasting Gov. Rick Perry with the latest political whipping stick - "crony capitalism." The pair allege the Texas governor is guilty of "crony capitalism" because an executive decision of his created tens of thousands Texas teenage customers for Merck & Co., the maker of a cervical cancer vaccine and one of Perry's big campaign contributors.

But it was perhaps the disastrous collapse of California-based Solyndra Inc. - and the discovery that the solar power company's biggest equity investor, George Kaiser, bundled campaign contributions for candidate Barack Obama in 2008 - that has recently stirred the "crony capitalism" idea/term out of its cave in Transylvania. Now it stalks the land, a monster.

Likewise, "crony capitalism" was invoked this week by critics attacking the Obama administration for allegedly (this was gleaned from the Daily Beast) trying to influence an Air Force general's testimony before the FCC about LightSquared, a wireless broadband operator run by another one of Obama's big campaign contributors.

If some wizard could ban the phrase "crony capitalism" from the airwaves (where's the Catholic Church's Index when we need it?), the Fox News Channel would be virtually speechless. This is not to say that the idea, the concern, lacks merit. But if you start wading into these waters you'll find plenty of Republicans who have also wanted to pick "winners" and "losers" in the marketplace. The GOP ran into this same hypocrisy-quagmire when they railed against congressional earmarks a few years ago.

In fact, "crony capitalism" is just the derogatory term for "public-private partnerships" - the phrase used in polite society by elected officials as they try to sell us, for example, on how lucky we would be if the city of Los Angeles partnered with AEG to let the entertainment giant build a stadium on public land. The entire redevelopment of downtown LA is awash in such "public-private partnerships" - it all sounds so laudable.

Too often a "public-private partnership" is simply a euphemism for no-bid deals between government and some private, for-profit entity that's got close friends at City Hall, in Sacramento or at the White House. Often, the partnership does create a public benefit - and turns a profit for the entrepreneurs. And if it doesn't - well, then taxpayers often get soaked.

The development of the U.S. railroad system in the 19th century helped build a national economy, spurred industrialization and developed the West. It was an early example of a "private-public partnership." Our history is replete with them - try the monarchy-granted franchises to settle the New World (you think there was a bidding process there that would stand public scrutiny?) The concept makes sense. Government sometimes needs to step up and sanction risky for-profit ventures, subsidize them, nurture them with monopolies, in order to achieve some public good.

It's the execution that often fails. Too often these partnerships are ironed out in backrooms; a lazy media with attention deficit disorder won't focus on them; elected officials are too often so self-interested they can only gushingly embrace them; and the government lawyers and regulators who are supposed to vet the deals and monitor compliance are too often out-gunned by the for-profit players' clever Wall Street lawyers. Little wonder that the results can often be disappointing, if not disastrous.

Just remember this: today's "crony capitalism" was yesterday's "public-private partnership."

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