26 Jul

Crony Capitalists Race to Obama’s Re-election [Reader Post]

                                       

President Obama’s three year spending spree has brought the country to the precipice of bankruptcy but as Speaker John Boehner noted, the president seems to fear losing re-election more than default on our national debt.

Despite facing a default deadline for months, the president and his team focused on what they do best – raising and spending other people’s money.

The President’s re-election team announced that between the Democratic National Committee and the Re-election committee, the president had raised an incredible $86 million.  Was it a sign of broad grassroots support for an embattled president?  Hardly.

244 people, “bundlers” in Washington parlance, gathered most of the money.  As Jerry Seinfeld used to ask, “Who are these people?”

Many of the fundraisers, according to Politico are executives with major regulatory or financial interests before the administration.  “A review of a list of high-dollar volunteer fundraisers, or bundlers, released by the Obama campaign last week includes a number of corporate officials whose companies have major business stakes in the decisions of government regulators and administration officials. In some cases, grants, loans and contracts were given to companies that bundlers were heavily involved or invested in.”

It isn’t capitalists who support the president; it’s the crony capitalists.

In addition to the established pigs eating at the federal trough – companies like UBS, Pfizer and other billion dollars corporations – companies like Google and Salesforce.com and Tesla have joined in the orgy.

Steve Westly, a major investor in the electric car company Tesla, bundled up to $200,000 for the president this cycle — while his company received a $465 million loan from the Department of Energy.  Google, of course, has invested years in the president and have pushed for regulation of the Internet through “Net Neutrality” and have staffed key executives in White House positions.

Tim Carney, from the Washington Examiner, has also noted that much of the money came from lobbyists, despite the president’s shameless condemnation of “special interest lobbyists.”

Take Google’s Beltway operatives. Vint Cerf is one of the guys who actually did invent the Internet, and now he works for the ardently pro-Obama Web giant as “senior vice president and chief Internet evangelist.” Cerf evangelizes government policymakers, we know thanks to emails obtained through the Freedom of Information Act. Cerf leaned on then-White House tech policy official Andrew McLaughlin — himself a former unregistered lobbyist for Google — to advance “net neutrality” regulations that would profit Google.

Ginny Hunt works out of Google’s K Street offices as its “global communications and public affairs manager.” An online bio says, “Ginny builds partnerships and initiatives with campaigns, non-profits and governments. …”

Cerf gave $5,000 to the DNC in June, and Hunt gave $250 to Obama’s campaign in April. Neither Hunt nor Cerf is registered to lobby the federal government — meaning that legally, they must spend less than 20 percent of their time lobbying Washington — so Obama can take their money and still claim to reject all money from “Washington lobbyists.”

What we are seeing is two failures.  The first is the president’s failure to change Washington.  The second is a failure of businesses that cannot compete in the marketplace without a hand-out and leg-up from government.

In the end, both with vanish from the playing field.  The only question is how long will the government prop them up and at what cost to the American people.

This entry was posted in Barack Obama, Obamanomics, Politics, POWER GRAB!. Bookmark the permalink. Tuesday, July 26th, 2011 at 10:33 am
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11 Responses to Crony Capitalists Race to Obama’s Re-election [Reader Post]

  1. Ken Moore says: 1

    The 2008 bundlers have mostly disappeared. These are the new guys.
    http://metanoodle.blogspot.com/2011/07/obama-losing-2008-bundlers.html

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  2. Nan G says: 2

    Steve Westly, a major investor in the electric car company Tesla, bundled up to $200,000 for the president this cycle — while his company received a $465 million loan from the Department of Energy.

    Tesla trades at a particularly lofty price-to-sales ratio of 21.
    That represents a massive premium to other auto plays like GM (0.3), Ford (0.4), and Toyota (0.6).

    Tesla recently announced (July 1st, 2011) it was discontinuing the manufacture of its roadster…..it’s only electric claim to any fame at all.
    That’s the death knell for Tesla, but it came only AFTER the owners had run through all of that free taxpayer cash.
    No wonder they are willing to bundle a bit back to Obama.
    They partied hard while most of the country was suffering.
    Elon Musk the Tesla CEO is a playboy with a very expensive lifestyle to enjoy.
    Musk flew to DC 12 times to see Obama since he took office.
    Musk’s corporate jet got a tax break, too.

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  3. Hedy says: 3

    I was never a Obama fan but when he ran I thought maybe he would do something different and change things boy what a joke that was. I guess we will never have politics for the people it is politics for politicians and how can we screw the people….

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  4. Greg says: 4

    Google, of course, has invested years in the president and have pushed for regulation of the Internet through “Net Neutrality” and have staffed key executives in White House positions.

    The purpose of net neutrality is to keep the internet from being controlled by large corporate entities to their own advantage. Basically, it says that content must be treated equally in terms of how much is charged for bandwidth. An equal rate should be charged for moving equal amounts of data on the electronic highway. Comcast, for instance, which offers their own internet phone service, doesn’t get to charge magicJack double the rate for moving the same amount of data as anyone else. A regulation that says Comcast cannot do that is an entirely sensible regulation, good for both the consumer and for free market competition.

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  5. johngalt says: 5

    @Greg:

    The purpose of Net Neutrality that you stated sounds benign, and a lot of people will accept it at face value as being in their best interest. However, the reality of it is something quite different. Here is the best explanation of why NN is wrong that I have seen;

    There is no “Network Neutrality” without government intervention in the internet. They are one and the same.

    To get good technical arguments why we should not have NN laws you have to understand how the internet works and how economics works. Both fields of study are, unfortunately, very much beyond the experience of most internet folks… even very technical ones. Understanding how TCP works on a high level is not going to really help you much in understanding why NN is just silly.

    Plus “Network Nuetrality” is really very poorly defined. Its one of those things terms that is designed to really confound the issue and be all things to all people. Political types understand very deeply the idea that people only hear what they want to hear. If NN sounds good to you then you will automatically filter out things you don’t like and if NN sounds bad to you then you will automatically filter out things you like.

    Just like how you like the idea of having a nice internet connection, and NN is for you having a nice internet connection, so you filtered out all ideas that NN is 100% about implementing government laws on ISPs. All you have to do is read the books published on the subject… at the very core of NN debate is the concept that you cannot trust major corporations and that you need governmental intervention to protect people from their greed.

    To understand why NN is stupid you have to understand how the the internet, on the physical layer, operates.

    The original design created a series of “tier”s: you have backbone providers (tier one), regional carriers (tier two) and then ISPs (tier three). The major backbone providers ran the main internet networks…. they provided services that spanned around the entire USA and even around the entire globe. The tier two folks would purchase bandwidth from the backbone providers then run various data connections (like a T1 or T3 line or whatever) out to various cities. ISPs would then purchase the bandwidth from them, pay for a connection to their local offices, then provide networking services to businesses and individuals through phone lines and dedicated data connections.

    Anybody who takes networking class would be aware of these sort of relationships. It is clean, logical, and well designed. It also kept control of the internet in the hands of the major backbone providers and this is how they wanted it kept.

    Over time the ISPs and teir two folks became increasingly dissatisfied with the level of service and costs that the backbone providers provided.

    If I am trying to send traffic to another ISP that is in the next county or the next state then why does it make sense to keep paying the backbone provider when I can set up my own connection and get internet connection to them at cost instead of having my profits drain into the back bone providers?

    So that is were you had peering relationships. ISPs and teir two folks just started making their own connections to everybody else instead of relying on the backbone providers. Then you have the ISPs getting larger and setting up their own dedicated networks and pushing the higher levels out of the market more and more.

    So now instead of being forced to send network bandwidth over the backbone providers you can send bandwidth from ISP to ISP to ISP directly or a whole host of other possibilities. Each with their own set of costs, bandwidth, latency, and technical issues.

    There has been a huge number of disputes and in fighting over who should pay for what.

    This is, needless to say, insanely complicated. Different routes involve different relationships, different contracts, different costs at different times of day, etc etc.

    And this has also gone into providing faster and faster connections at lower costs with a massive increase in reliability. Efficiency is up and costs are down and we have to thank economics and private enterprise.

    Right now I have a 16Mb/s connection to the internet for 30 dollars a month. (promotional price). A few years back I was looking at getting a dedicated T1… that would of cost between 700-1300 dollars a month at 1/16th the performance.

    Then on top of that we have different types of networking.

    Lets say you have bittorrent running for downloading bulk movies. Your looking at moving between 700 (low quality) to 8GB (high quality movie) of data over the lifetime of that download.

    versus

    A VoIP connection that is running 16Kb/s per second and will maybe only move 10-20 MB over the life of the conversation.

    Would you be happy if your BT download was running at 30Kb/s?
    Would you be happy if your VoIP connection had a quarter of a second delay that would shoot up to 2 or 3 seconds and had a lot of missing words?
    Would you be angry if the BT download connections took 2-3 seconds to build if you could get the connections at 16Mb/s?
    Would you be happy if your VoIP connection had 30Mb/s of excess bandwidth even if your only going to use 1/5th of one percent of it?

    With all sorts of different ways and different costs of shoving data around on the internet it make sense that the ISPs and other network providers will be making trade offs in latency vs bandwidth vs costs based on what type of data and the quality of service demanded of different types of protocols.

    All network neutrality laws will do is just institutionalize one specific way to route traffic on the internet regardless of efficiency or cost or any innovations in routing technology or peering relationships.

    Long, I know, but the issue is much more involved than you put forth in your comment.

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  6. Nan G says: 6

    GE’s Imelt is another Obama crony capitalist…..

    General Electric Co.’s health care unit, the world’s biggest maker of medical imaging machines, is moving the headquarters of its 115-year-old X-ray business to Beijing.

    GE Healthcare is the world’s biggest maker of magnetic resonance imaging and cardiac tomography scanners.
    http://www.boston.com/business/articles/2011/07/26/ge_moving_x_ray_business_to_china/

    No idea how many Americans will lose their jobs over this.
    GE refuses to list all of its operations separately.

    But GE already closed all its light bulb manufacturing in the USA in favor of Chinese workers.

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  7. Ken Moore ,hi, VERY NICE BLOG thank’s for having me visiting.
    so sorry about JACK LAYTON, SUCH A NICE GUY,

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  8. guyfawkes99,
    very telling POST, that is not fair for the AMERICAN VOTERS, which are being led by the money,
    one get the most of, regardless of incompetence to do the job,
    and the one who seek the POSITION OF THE PRESIDENCY, WHICH BRING THEIR HIGHLY SUPERIOR KNOWLEDGE AND INTELLECT TO MAKE A GREAT PRESIDENT, ARE BEING PUT ON THE BACK
    BY MEDIA WHICH COLLECT THE MONEY FOR THEIR SELLING GAME,
    JUST BECAUSE HE GET TO GIVE THEM BIG CONTRACTS IF THEY PAY FOR HIS ELECTION,
    WHAT A SHAME ON THEM, TO ACT AS TRAITORS FOR MONEY THEY ARE ALL JUDAS,

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  9. Liberal1 (objectivity) says: 9

    The article makes the artificial distinction between ‘crony’ capitalists and capitalists. What shall we call the non-crony capitalists–’true’ capitalists. The fact is that cronyism is a natural characteristic of all capitalism–and socialism, and communism, and fascism.

    The author just uses the term, and its negative connotation, to give emotional credence to his argument. If you turn to left-wing blogs, you’ll find that they use the same term against the Right. Such emotionally based arguments denigrate the effect of reason.

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  10. Nan G says: 10

    @Liberal1 (objectivity):
    The exact same can be said of the whole idea of shouting ”racist” to end arguments on issues where Obama is concerned.
    The unfairness of that name-calling is compounded by the very fact that blacks refuse to recognize real racism on their own parts.
    There is still a false belief that, since they are powerless they therefore can never be racist.
    “Crony” is a highly charged term, as filled with as many negative connotations as the term “racist.”

    Edited to add:
    It is far more useful to debate based on actions and beliefs rather than to throw around such highly charged language.

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  11. THE SOOTHSAYER says: 11

    Thank you John Galt, my knowledge of networking is more latent with RCA then NBC and Sarnoff building radio maxing analog ground signals with wireless broadcasting. Government is in the tax business and they see all this Internet activity free flowing regardless of boundaries and they want some method to funnel, filter and capture the activity so it can be measured subject to taxation. People pay static taxes leasing from their ISP carrier but goverment wants a piece of the traffic flow. NN is just another means allowing government to rummage through your pockets stealing loose change and if they get a nickle one month they will demand a dime the next..

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