Cronyism is not Realism

Forbes.com ran an opinion piece today by Mr. Dan DiMicco, a self-described “trade realist.”

Mr. DiMicco’s article is a prime example of how cronies try to game the system all in the name of “fair play.”  By decrying the actions of others, he demands that the US government match what other governments are doing and labels all of us who oppose such actions as “the true protectionists.”

Mr. DiMicco’s arguments are unconvincing for several reasons: they are largely disjointed.  He jumps around from talking point to talking point without really justifying any of them.  He also relies heavily on arguments based upon emotion rather than anything of substance.

His biggest mistake (and the one I take issue with the most as a moralist) is the “they do it so we must too!”  With respect, this is an extremely childish argument, but also all it does is create an economic arms race.  Mr. DiMicco rightfully argues that some governments ignore trade rules and trade agreements; he labels these people “Trade Cheaters.”  He then calls on the US, not to fight these breaches, but to embrace them!  One person cheating to get back at another for cheating doesn’t make the game fair; it just makes both parties cheaters.

What Mr. DiMicco is asking is not for a level playing field, but for the government to pick winners and losers.  That is an extremely dangerous proposition.  It would also lead to wasted resources and often contradictory government policy.  It would also increase lobbying as more and more firms look to get the special privileges he advocates.  In short: it creates a system of cronyism.

Competition is not something that should be shunned; it should be embraced.

There are many other issues wrong with Mr. DiMicco’s article, which I may cover in a future post, but his main argument is very unconvincing, despite the appeal it might have on an emotional level.

3 thoughts on “Cronyism is not Realism

  1. Good post Jon.

    On a related issue, vidyohs is very much delighted to see more and more people using the accurate term crony corporatism instead of the inaccurate term crony capitalism. Words do matter.

    Liked by 1 person

  2. If you punch yourself in the nose and bleed on my shoe, I’m gonna punch myself in the nose and bleed on your shoe to get even.

    (H/T morganovich)

    Liked by 1 person

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