url?sa=t&source=web&cd=1&ved=0CCYQFjAA&url=http://mercatus.org/sites/default/files/Holcombe_Cronyism_web

men—rather than the power of the market and
the rule of law—to decide who will benefit and
who will not. 4
Taylor goes on to document how cronyism led to excessive
risk-taking, partly through Fannie Mae and Freddie Mac,
partly as a result of the 2010 Dodd-Frank financial reform
act, and through the designation of politically connected
firms as “too big to fail.”
When the government has the power to intervene in
people’s economic affairs, to choose winners and losers,
and to designate some firms as worthy of government
bailouts while others must fend for themselves or go
under, people with political connections tend to benefit at
the expense of those lacking such connections. Additional
government oversight and control will push the economy
closer to the model of fascism, which we analyzed in
chapter 5. Critics of crony capitalism should be wary of
the argument that because of favoritism shown by those
in government to their cronies, the government should
have more power over the nation’s economic affairs.
92 LIBERALISM AND CRONYISM