The political stereotype is that the Republicans are the party of big money and Democrats are the party of the little guys. But the reality is something else.
Crony capitalists are those who use Washington to create a system that they can game, to use against their smaller competitors. I have said before in this blog, ‘crony capitalism is to capitalism as National Socialism is to Socialism.’ Crony capitalism is not a free market. They have bastardized the word ‘capitalism’ the same way that the closed minded form of modern political ‘liberalism’ bastardized the meaning of open minded ‘classical liberalism’.
Mona Charen makes that point again in the National Review Online
Who’s More Irresponsible, Wall Street or State Governments?
Anecdotes are not evidence, but consider this: According to the Center for Responsive Politics, Democrats received $11.3 million in contributions from hedge funds in 2008. Republicans got $5.9 million. Some critics of the Dodd bill note that it would give broad discretion to the FDIC and a new regulator to decide which firms would be bailed out and which would not. That isn’t so much preventing another crisis as institutionalizing “too big to fail.” The moral hazard problem — i.e. encouraging risky practices with the implicit or explicit promise of a bailout — remains.
Furthermore, the Dodd bill — and the Democrats’ narrative — completely omits the role of government in the financial debacle. Neither Fannie Mae nor Freddie Mac is mentioned in the legislation. But the incentives created by government, specifically the sustained push through law and regulation to provide mortgages to more and more uncreditworthy borrowers, created the conditions for the housing bubble and for its eventual crash.