America Has Replaced Capitalism With Cronyism


Lenin said nothing can happen for decades and then decades can happen in weeks. Yes, a pandemic pulls the future forward, and there’s a lot to learn. Another phenomenon that forms rain clouds of perspective: death — or, specifically, being close to it.

My father is approaching 90, recently divorced (for the fourth time), and spends his days watching replays of Maple Leafs games and abusing Xanax. His affinity for Xanies is a feature, not a bug, since at the end of one’s life “long-term effects” lose meaning. He’s near the end, exceptionally intelligent, and high. In sum, he’s my Yoda.

Our calls are mostly me yelling short questions and waiting for something profound in return. Occasionally he delivers: When I asked him what he thinks makes America different, he said, “America is a terrible place to be stupid.”

That’s why he immigrated here. A pillar of capitalism is you can’t reward the winners without punishing the losers. I worry our government has been co-opted by the wealthy and is focused on protecting the previous generation of winners, even if it means reducing future generations’ ability to win. Aren’t we borrowing against our children’s prosperity to protect the wealth of the top 10 percent, if not the one percent?

In Scotland during the Great Depression, my dad was physically abused by his father. His mother spent the money he sent home from the Royal Navy on whiskey and cigarettes. My dad took a huge risk and came to America. My mom took a similar risk, leaving her two youngest siblings in an orphanage (her parents had both died in their early 50s), and bought a ticket on a steamship. She had a small suitcase and 110 quid that she hid in both socks. Why? Because they wanted to work their asses off and be rewarded for the risks they were willing to take. This was capitalism, a beacon of hope for people who are smart, hardworking, and comfortable with risk, promising a greater share of the spoils to them than to those who are not.

However, no more. Modern-day capitalism in America is to flatten the risk curve for people who already have money by borrowing from future generations with debt-fueled bailouts for companies. We have consciously decided to reduce the downside for the wealthy, thereby limiting the upside for future generations.

Consider the interview with venture capitalist Chamath Palihapitiya, who told CNBC host Scott Wapner that equity holders deserve to get wiped out. “Why does anybody deserve, to use your word, to get wiped out in a crisis created like this?” Wapner responded. “This is like a natural disaster; why does anybody deserve to get wiped out? Wouldn’t that be immoral in and of itself?”