Wikipedia defines crony capitalism as "a pejorative term describing an allegedly capitalist economy in which success in business depends on close relationships." It cites China, India, Indonesia, Argentina, Brazil, Malaysia, Russia "and most other ex-Soviet states."
The Golden State arguably has the nation's densest business regulatory structure, a jumble of rules and regulations. There's a continuous, high-decibel debate over whether this red tape is necessary to protect the environment, workers' rights, health and other public goods or is an overreaching, job-killing barrier to investment.
Whether positive or negative, there's no doubt this regulatory thicket is difficult to penetrate. It also gives rise to crony capitalism, in which those with specific development projects seek, even demand, single-purpose exemptions from those who hold political office.
Indeed, it often appears that some regulations exist primarily to compel those seeking exemptions to cozy up to state legislators or others. The complicated and pointless regulations governing horse racing and the distribution and sale of liquor are two examples.
Last year we saw Ed Roski Jr., a prominent and well-connected Southern California developer, team up with the City of Industry to secure a blanket exemption from the California Environmental Quality Act, including a ban on litigation, for their plans to build a professional football arena.
As the Roski bill rocketed through the Legislature, winning support even from liberal lawmakers who ordinarily oppose any exceptions to CEQA, a few naysayers warned that it would reverberate in other efforts to get single-purpose exemptions for projects.
Just weeks after signing the Roski bill, Gov. Arnold Schwarzenegger proposed that he and future governors be given the authority to exempt up to 100 specific projects from CEQA – a proposal still pending in the Capitol.
Meanwhile, another Los Angeles suburb, Downey, is pushing a bill that would exempt it from environmental laws as well as state law requiring that blight be proved for expansion of any redevelopment zone, so that it can add millions of dollars in local subsidies to federal subsidies for a Tesla Motors electric car plant.
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