the Session of the respective Houses, and in going to and returning from the same; and for any Speech or Debate in either House, they shall not be questioned in any other Place."
That clause is not a get-out-of-jail-free pass for wrongdoers. It was designed as a safeguard against politically motivated legal action by the executive branch. British monarchs had used civil and criminal laws to block legislators who opposed the king. Who knew that over two hundred years later the legislative branch would use this as a shield against searches for criminal evidence?
If our elected representatives in Washington really want to cite the Constitution, they might begin with the Preamble: "We the People ... ordain and establish this Constitution." We, the people of the United States, contractually grant Congress its rights. The Constitution is a contract between the people and the elected. When members of the Permanent Political Class use their public office for personal interest, they have breached that contract.
Â
It was in the 1940s when the word "crony" was first applied to modern American politics. Arthur Krock, the famed
New York Times
reporter nicknamed "the dean of the Washington newsmen," used it to criticize the political machineâlike methods of the Truman administration, and later applied it to others. Alluding to President Truman's former connections to the Kansas City political machine of Tom Pendergast, Krock wrote in 1946 that "the Missouri flavor is strong around the White House itself ... and this has led to talk of government by crony." Harold Ickes, Truman's secretary of the interior, resigned from the administration in February of that year, saying, "I am against government by crony." Renowned journalist Walter Lippmann also used the term to criticize the Truman administration in a 1952
New York Times
article, making reference to "the amount of politically entrenched bureaucracy that has earned for Mr. Truman's regime its sorry reputation for corruption, cronyism, extravagance, waste and confusion." After Truman retired from Washington, the word "cronyism" came up frequently in American politicsâthe Eisenhower, Kennedy, and Johnson administrations were all subject to charges of "influence peddling, conflict of interest, gift giving, and the like." 10
We have seen waves of hearings, from Truman to Johnson to Nixon and so on, over scandals now mostly forgotten. Does anyone other than political junkies remember Abscam or the Keating Five? There have also been waves of reform efforts and rules changes, including the Ethics in Government Act (provoked by Watergate). Yet politicians continue to enrich themselves, their families, their friends, and their supporters through the practice of cronyism.
Â
Montesquieu wrote in
The Spirit of the Laws,
"Commerce is the profession of equals." But not in an era of crony capitalism, where politicians increasingly call the shots and where better access is often more important than a better idea or better business plan. Business has often resembled a meritocracy: the entrepreneur with the best idea, the best product, the best business strategy, wins. People vote with their purchases to select winners and losers. And investors looking to help a budding company will make their evaluation on the merits. Cronyism is the antithesis of a meritocracy.
Andrew Redleaf is the CEO of Whitebox Advisors, a highly regarded investment advisory service. Redleaf has had a long career running investment funds. He argues that crony capitalism isn't just unfair, it is a serious threat to our economic system, because "crony capitalists do not depend upon the general success of the economy to achieve their larger goals ... The crony capitalist is instinctively satisfied with the notion of a zero-sum game, which, for his purposes, is better than a rising tide that lifts all boats. What good is it to the crony capitalist to see all boats lifted?" 11
The crony-capitalist system is
That clause is not a get-out-of-jail-free pass for wrongdoers. It was designed as a safeguard against politically motivated legal action by the executive branch. British monarchs had used civil and criminal laws to block legislators who opposed the king. Who knew that over two hundred years later the legislative branch would use this as a shield against searches for criminal evidence?
If our elected representatives in Washington really want to cite the Constitution, they might begin with the Preamble: "We the People ... ordain and establish this Constitution." We, the people of the United States, contractually grant Congress its rights. The Constitution is a contract between the people and the elected. When members of the Permanent Political Class use their public office for personal interest, they have breached that contract.
Â
It was in the 1940s when the word "crony" was first applied to modern American politics. Arthur Krock, the famed
New York Times
reporter nicknamed "the dean of the Washington newsmen," used it to criticize the political machineâlike methods of the Truman administration, and later applied it to others. Alluding to President Truman's former connections to the Kansas City political machine of Tom Pendergast, Krock wrote in 1946 that "the Missouri flavor is strong around the White House itself ... and this has led to talk of government by crony." Harold Ickes, Truman's secretary of the interior, resigned from the administration in February of that year, saying, "I am against government by crony." Renowned journalist Walter Lippmann also used the term to criticize the Truman administration in a 1952
New York Times
article, making reference to "the amount of politically entrenched bureaucracy that has earned for Mr. Truman's regime its sorry reputation for corruption, cronyism, extravagance, waste and confusion." After Truman retired from Washington, the word "cronyism" came up frequently in American politicsâthe Eisenhower, Kennedy, and Johnson administrations were all subject to charges of "influence peddling, conflict of interest, gift giving, and the like." 10
We have seen waves of hearings, from Truman to Johnson to Nixon and so on, over scandals now mostly forgotten. Does anyone other than political junkies remember Abscam or the Keating Five? There have also been waves of reform efforts and rules changes, including the Ethics in Government Act (provoked by Watergate). Yet politicians continue to enrich themselves, their families, their friends, and their supporters through the practice of cronyism.
Â
Montesquieu wrote in
The Spirit of the Laws,
"Commerce is the profession of equals." But not in an era of crony capitalism, where politicians increasingly call the shots and where better access is often more important than a better idea or better business plan. Business has often resembled a meritocracy: the entrepreneur with the best idea, the best product, the best business strategy, wins. People vote with their purchases to select winners and losers. And investors looking to help a budding company will make their evaluation on the merits. Cronyism is the antithesis of a meritocracy.
Andrew Redleaf is the CEO of Whitebox Advisors, a highly regarded investment advisory service. Redleaf has had a long career running investment funds. He argues that crony capitalism isn't just unfair, it is a serious threat to our economic system, because "crony capitalists do not depend upon the general success of the economy to achieve their larger goals ... The crony capitalist is instinctively satisfied with the notion of a zero-sum game, which, for his purposes, is better than a rising tide that lifts all boats. What good is it to the crony capitalist to see all boats lifted?" 11
The crony-capitalist system is
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