Crony Capitalism still Reigns Supreme

Joel Kotkin has posted a good piece that hits on a theme that I have been hitting on at the Dynamist for some time, particularly here and here.  The theme is that Obama has probably achieved a political realignment in favor of the northern blue states and the Democratic Party.  Mr. Kotkin has written that, in reality we have traded one form of crony capitalism, the Sun Belt "cowboy capitalism" of Nixon, Reagan and Bush, with that of the "collusive capitalism" of Obama…still driven by a well-connected elite, but just a different elite than that which dominated politics under the Republicans.

"Cowboy Capitalism" holds the free market supreme, but contradicts itself with direct and indirect subsidies for agribusiness, pharma, health insurers, big energy, aerospace, suburban homebuilders and consumer lenders.

Obama's "collusive capitalism" punishes the beneficiaries of cowboy capitalism while supporting hedge funds, venture capitalists, information technology, academia, green energy and urban landowners, with support from Hollywood and the media.

Mr. Kotkin hypothesizes, correctly I think, that the threat to the domination of the Blue State economic elite comes not from the Republicans, who are currently flailing, but from the "non-gentry" left, who will become disappointed by weak job creation and a continued concentration of wealth into the hands of the New Economy elite.

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