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Crony capitalism describes an economic and political environment in which pursuing and obtaining government favors is both part of everyday life and a necessary protocol for succeeding in business. Where crony capitalism exists, notions of meritocracy have been displaced by notions of cronyism or kleptocracy or something similar. Crony capitalism has ebbed and flowed in our history, and it seems as though today it is on the rise. Just looking at late 2012 and early 2013, one could talk for hours about the examples of crony capitalism—for example, the $78 million tax write-off in the new tax bill for NASCAR drivers. That write-off may be very popular—I don’t know—but it is crony capitalism. The tax benefits for the New York Liberty Zone provide another example. Yet another was the tax victory given to companies operating in American Samoa by Chris Dodd—a former Connecticut Senator—who now represents Hollywood’s movie studios. He got those companies a two-year extension on a provision allowing film and television producers to expense the first $15 million of production costs incurred in the United States—a kind of wholesale crony capitalism.
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