‘Crony Capitalism,’ Not Corruption, Stunts U.S. Economic Growth

Wall Street Journal: “Cozy relationships among private interest groups and government officials have stunted economic growth, according to a new report by the Committee for Economic Development, a nonpartisan group of corporate executives that offers policy prescriptions for fiscal problems.”

“In the report, the organization calls for curbs on the so-called revolving door between Congress and lobbying firms and for overhauling the campaign-finance system, two popular ideas on the 2016 campaign trail.”

“The report, titled ‘Crony Capitalism: Unhealthy Relations Between Business and Government,’ says the spiking cost of running campaigns, combined with lobbyists’ mounting influence in Washington, have ‘exerted an important toll on the U.S. economy.'”

“One such example is the federal sugar subsidy program, which the report estimates costs consumers almost $4 billion per year … While sugar crops comprise a small percentage of the total value of U.S. crops, the sugar industry accounted for more than a third of all U.S. crop lobbying from 2002 to 2011. Political-action committees affiliated with sugar companies made more campaign donations than did lobbyists for all other U.S. crop interests combined between 2002 and 2012.”

“The committee also cites analysis of 200 firms by the Sunlight Foundation, which found that between 2007 and 2010, companies that spent heavily on lobbying paid far lower effective federal tax rates than those that didn’t.”

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