Crony Capitalism

Don Sorchychcro·ny cap·i·tal·ism

“Is an economic system characterized by close, mutually advantageous relationships between business leaders and government officials.”

This is where governments begin to rot whether the government is local, county, state or national.

We have had a fair amount of crony capitalism (CC) here in Cave Creek and Washington is known for the practice.

From Wikipedia:
“Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism. Crony capitalism is believed to arise when business cronyism and related self-serving behavior by businesses or businesspeople spills over into politics and government, or when self-serving friendships and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals.

“The term ‘crony capitalism’ made a significant impact in the public arena as an explanation of the Asian financial crisis. It is also used to describe governmental decisions favoring ‘cronies’ of governmental officials. In this context, the term is often used interchangeably with corporate welfare; to the extent that there is a difference, it may be the extent to which a government action can be said to benefit individuals rather than entire industries.”

There are thousands of examples of CC so it is a widely used practice. Notice, for example, politicians’ net worth seem to grow although the gains are not based on salary.

Since we don’t pay council members here they probably have no financial gain from their position but is it possible that gains of some kind derive from decisions favoring certain businesses? I hope not.

However, why does the town staff close our roads for four businesses on the west side of Cave Creek Road? The Roadhouse and Hideaway are primary beneficiaries of this town practice, despite needing more parking spaces because they pack their parking lots with out-of-town vendors, while local brick and mortar businesses suffer losses on the best business days. And, worst of all, the 80 percent of town citizens who don’t want roads closed suffer delays using the only road in and out of town. It is not even close to being fair.

How did this happen? In some cases the events were primarily due to Town Marshal Adam Stein’s planning but Town Manager Peter Jankowski apparently approved his actions.

The current council appears to be wakening and most new council members made promises road closure would only be allowed for the Wild West Days, Fiesta Days and Cactus Shadow’s Homecoming parades.

Current council seems to be afraid to make strict decisions and move on. It turns out that the town already had controlled a small part of the problem but CC had reared its head. Any event four days or more needed council approval. Stein admitted with a red face that he broke the 10-day long Bike Week into two events, thus avoiding the required council approval.

With Jankowski’s support council voted in a development agreement for a barrel sign in front of the Roadhouse. What Jankowski didn’t tell the council is that it is 100 percent on town property and so we the citizens own the liability if someone hits it.
So why is it still there?

During the recent council election, mayor-elect Ernie Bunch refused to promise not to close roads in spite of the fact it is classic CC. So I assume other council members who pledged to stop closing our roads will out vote him. I have a promise from a shoo-in vote for mayor or council who will be delighted to serve against any CCer.