Wednesday, Leonardo DiCaprio made a visit to Trump Tower. The reason? Selling the incoming administration on the creation of “millions of green jobs.” He wants the government to put its thumb on the scale to favor his pet industries. This nonsense must stop, and President Trump’s first one hundred day agenda would benefit from a plan for ending the out-of-control crony capitalism that has made this kind of activity commonplace.
DiCaprio is easy to criticize: a movie star who addresses the UN. He hectors the government to spend money on things that voters do not prioritize as highly as he does…because, you know, he knows best. But this does more than just infuriate voters. It is regulatory capture but on a grand, political scale. It warps capital markets, warps entire sectors of our economy and diverts entrepreneurs from market-driven pursuits.
It is not a theoretical point. Take the case of Elon Musk, who has become one of the more successful entrepreneurs chasing government dollars. In a sense, Musk is a tragic story of how one of the world’s most talented entrepreneurs has become sidetracked by crony capitalism.
We are all aware of President Obama’s obsession with electric vehicles (EVs), for example. In 2011, he pledged that the United States would have one million new generation electric cars on the road by 2015 and pledged billions to do it. He and a bipartisan consensus in Congress wasted gobs of money and warped markets to miss that absurd goal by a yawning margin. Likewise, he threw billions at solar energy with direct and indirect subsidies. Solar power is still not cost competitive.
From that, Musk made billions.