Cronyism is alive and well in the Obama administration. That’s no surprise, it’s just Chicago politics.
Powerline has a post today called: Obamacare, a Uniquely Vicious Form of Corruption. In it, John exposes the special treatment of the one of the “friends of Obamacare,” AARP, being written by our elite bureaucrats into the regulations on Obamacare. Powerline quotes an article by Karl Rove in the Wall Street Journal exposing the cronyism:
The Obama administration’s behavior to date suggests that it will not hesitate to take care of its friends. The Senate Republican Policy Committee’s health policy analyst, Chris Jacobs, points out that the administration has already given an extravagant gift to the AARP (American Association of Retired Persons), a key player in passing the Patient Protection and Affordable Care Act.
The AARP provided a big chunk of the $121 million spent on ads supporting the bill’s passage, as well as $21 million on lobbying in 2009, according to the Center for Responsive Politics. HHS’s proposed regulations on Dec. 21 exempted the AARP’s lucrative “Medigap” plans from the rate review and other mandates and requirements. …
The AARP is also exempt from the new law’s $500,000 cap on executive compensation for insurance executives. (The nonprofit’s last CEO received over $1.5 million in compensation in his last full year, 2009.) It won’t pay any of the estimated $14 billion in new taxes on insurance companies, though according to its 2008 consolidated financial statement, it gets more money from its insurance offerings than it does from dues, grants and private contributions combined. Nor will it have to spend at least 85% of its Medigap premium dollars on medical claims, as Medicare Advantage plans must do; the AARP will be held to a far less restrictive 65%.
It’s not hard to connect the dots. The Obama administration is using waivers to reward friends. On the flip side, business executives will be discouraged from contributing to the president’s opponents or from taking any other steps that might upset the White House or its political appointees at HHS.
John makes a great point:
We’ve heard a lot about “crony capitalism” in recent years, but this is something worse–crony socialism. The Obama administration is running, in effect, a protection racket–nice business you have here, too bad if something should happen to it. We’re passing legislation that may destroy your business, but don’t worry–if you pay us our protection money, we will give you a waiver. By American standards, this is corruption of a uniquely vicious sort.
So… We have unions being paid off with preferential treatment in the GM and Chrysler bailouts. We have public employee unions paid off with the stimulus. And now we have AARP being paid off in a big way for supporting Obamacare. Isn’t it getting a little obvious.
John hits the nail on the head. In an environment where the bureaucracies become the enforcers of a protection racket, dealing out punishment for the uncooperative and reward for the “friends,” what are companies supposed to do? Do you suppose this type of thing helps create jobs going forward, as companies realize that there can be a bureaucratic shakedown at any moment, and small players realize they can’t afford the political patronage necessary to be allowed to compete?