“Most people are ethical. If virtuous capitalists and entrepreneurs had higher social standing, there might be more of them, and fewer rent-seekers. In the long run, everyone would benefit.”
Every year, the federal government distributes more than $100 billion in corporate welfare. The handouts include thousands of subsidies, mandates, bailouts, and grants. Cronyism also includes favorable regulations to keep competitors out and many other types of other special treatment.
“Rent-seeking,” the term economists use to describe seeking these unethical government favors, is clearly a huge industry. But a major question remains: why isn’t there even more of it? I recently co-authored a paper with Fred Smith on this very topic.
The Tullock Paradox
Lobbying is a $3.5 billion industry resulting in $100 billion annually to its beneficiaries. That’s a 30-fold return.…
“In 2014, more than 40 percent of its resources went to renewable energy projects. Environmental advocacy groups such as Greenpeace largely support OPIC’s recent emphasis on renewable energy, but still criticize OPIC’s continued support of energy-related projects that use fossil fuels.”
A small victory for taxpayers and cronyism foes occurred today with the expiration of the charter of the Overseas Private Investment Corporation (OPIC), a government lending agency. The agency is still open, but like its sister the Export-Import Bank (EXIM), whose charter expired this June 30, it cannot engage in new business.
OPIC and EXIM remain open to service existing loans, however, and reauthorization would bring them back to full life.
OPIC’s three key policy objectives are to: