Suicide, poverty, corruption, deceit and robbery — this sounds like humanity’s worst-of-the-worst list. However, each of these are consequences of cronyism.
When the government lies in bed with businesses — whether they’re local shops or multinational conglomerates — the American people suffer greatly.
Free enterprise and social mobility are two of the many characteristics that separate this nation from others and is what still attracts many immigrants today. While both are in serious decline, Congress and government administrations continue to transact backroom deals with companies involving millions of dollars.
Whether deals are made to gain an economic advantage, to lobby for certain legislation or to prevent a scandal from going public, one thing is constant: almost every action between corporations and the government hurt future generations, specifically graduates.
When existing businesses are successful in lobbying for federal handouts, the market becomes more volatile and more difficult for companies to start and grow, damaging the prospects for young job-seekers.
In 2009, the U.S. Department of Energy granted Solyndra $536 million in an attempt to jump-start the solar-panel manufacturer with hopes that it would lead the future in renewable energy. Just two years later, Solyndra filed for bankruptcy and quickly disappeared along with its 1,100 employees.
More than half a billion dollars was gone as quickly as it appeared. Corruption exists at the state level as well, especially in Louisiana. Our old friend Ray Nagin accepted a $23,500 trip to New York in exchange for forgiving George Solomon of his tax and loan penalties. He also accepted $60,000 in bribes from another man in 2008.
This may all seem like the standard political chess game, and unfortunately it is. Too often the government, with the support of corrupt companies, creates a suffocating environment for new businesses, decreasing the competition and allowing for prices to skyrocket in fields like health care, cable and rent.
The rising cost of living, exacerbated by a market that favors existing firms, disproportionately affects younger workers. Maintaining one’s health is a tremendous load. Those who already supply their own insurance know firsthand how ludicrous the prices are.
If a provider wants to start up and expand service of insurance, they would be denied that right until the state allowed them to do so. In 36 states, including Louisiana, health care companies must wait for government approval before opening or expanding their facilities. The regulatory process turns many entrepreneurs away and stifles competition, creating an atmosphere that favors the existing firms — this is how monopolies begin.
Even the business of burying the deceased comes with unnecessary mandates. Last year, monks at Saint Joseph Abbey in southern Louisiana defended their right to manufacture and sell caskets at prices cheaper than most retail sellers. Since casket prices reach upwards of $10,000, Saint Joseph is an attractive outlet for customers. But state law requires a license for selling caskets and mandates that they be sold at licensed funeral establishments. To both the monks’ and the consumers’ benefit, a federal appeals court overturned the law.
Regulations exist in every field and in every state, delaying the rate of innovation and increasing the prices of everyday items. Existing businesses generally favor such legislation because competition suffers and they are able to expand and raise prices without losing customers.
Instead of arbitrarily blaming the usual scapegoats like capitalism or the free market, we need to advocate for the separation of state and economics.
The only way to release cronyism’s grip on the economy is to eliminate the barriers that prevent new suppliers from starting up and expanding; these include licensing requirements and regulatory fees. Doing so will generate a healthier environment that offers better prospects for graduates and lower prices for consumers.
Or we can buy a private Caribbean island and start our own country. The sunsets look gorgeous there.
Andrew Stolzle is a 21-year-old mechanical engineering junior from Baton Rouge.