Wednesday, April 22, 2015

The United States of Subsidies

State intervention in economic production arises only when private initiative is lacking or insufficient, or when the political interests of the State are involved. This intervention may take the form of control, assistance or direct management.
-Benito Mussolini in  Fascism: Doctrine and Institutions  (pp. 135-136)

Current government support of selected corporations should not be confused with free market capitalism. It is Mussolini crony economics.  -RW


  1. What do we call this? Mercantilism? Interventionism? Progressivism? Neomercantilism? I don't like the term state capitalism because capitalism takes enough abuse.

  2. and fraud....

    ManorCare's Medicare Fraud Under Carlyle Ownership
    HCR ManorCare accused in Medicare suit
    Feds say firm collected millions in false claims

    Carlyle monetized ManorCare's physical assets for $6.1 billion in March 2011. In June of 2011 Carlyle announced it would take ManorCare public but never executed the deal. Carlyle owned ManorCare for most of the period in question. The government's press release stated:

    The government’s complaint alleges that ManorCare, which is owned by The Carlyle Group, exerted pressure on SNF administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in the provision of medically unreasonable and unnecessary services to Medicare and Tricare patients. ManorCare allegedly set prospective billing goals designed to significantly increase revenues without regard to patients’ actual clinical needs and threatened to terminate SNF managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments. ManorCare also allegedly increased its Medicare payments by keeping patients in its facilities even though they were medically ready to be discharged.

    Note that healthcare quality will not be "improved" by PPACA's multiple moneychases. Expect more cheating and fraud to optimize reimbursement, just as ManorCare continued under Carlyle Group ownership. It's the sorry state of abysmal management and insider politics in our PEU world, where cheating equals opportunity.

  3. Its called Fascism. There's no other word for it. It is morally reprehensible and practically enriches the few by stealing from the many. There is no justification for it and yet it continues because far too many people believe in might makes right no matter which end of the club they find themselves. Great post RW.