Crony Capitalism Is the Real Enemy, Not Socialism

The Question Everyone Is Asking, and Why They’re Asking It Wrong

Is America heading toward socialism? You can’t open a newspaper or scroll through a feed without seeing that question debated. Democratic socialist candidates are gaining traction in various races, and pundits are comparing the movement to the Tea Party wave of 2010. But I want to push back on the framing, because I think it misses something far more important.

The real issue is not socialism versus capitalism. The real issue is crony capitalism, and how it has eroded trust in free markets from both sides of the political spectrum.

What the New Left and the New Right Actually Agree On

Here is something that should give every investor and every American pause. The new populist left and the new populist right, despite disagreeing on immigration, cultural issues, and foreign policy, share one fundamental belief: the economic policies of the past are not working.

That convergence matters. When you have people on opposite ends of the political dial arriving at the same conclusion about the economy, something real is going on underneath the surface. These are not fringe voices. This is a broad, growing sentiment that the system is rigged, and honestly, on certain levels, they are not wrong.

The JD Vance Problem

Let me use Vice President JD Vance as an example, because I think he illustrates the danger clearly. His personal story is compelling. He served his country. He pulled himself up. And his experience in the private sector, specifically in venture capital, was not a success. That is okay. Failure and recovery are part of the American story.

But what concerns me is that Vance has used that experience to fuel a broader skepticism about capitalism itself. He has gone after Milton Friedman. He has taken shots at the Reagan economic framework. There is a piece by Bill McGern that drew a fascinating parallel between JD Vance and JD Rockefeller, noting that both men, despite their very different origins, arrived at a similar conclusion: capitalism does not work for ordinary Americans.

That is a dangerous place for a national leader to land.

Competition Is Still the Customer’s Best Friend

One of the arguments being made to support this anti-market view is that companies like Amazon destroyed local businesses. I reject that conclusion. What Amazon did was force adaptation. The businesses that failed did not fail because Amazon was too powerful. They failed because they did not evolve.

Here is what I see right now in Tampa and in cities across the country:

• Small independent bookstores filling specific community needs
• Specialty retailers carving out niches that big-box stores cannot serve
• Local businesses thriving precisely because they offer something mass retail cannot replicate

I am broadcasting from offices in Italy at the moment, and right around the corner there is a bookstore that took over an old movie theater. The screen is still up, movies play on the balcony, and books fill the floor below. The place is packed every single day. That is not a business that Amazon destroyed. That is a business that found its footing in a competitive environment.

Competition benefits the customer. Full stop. More choices, better prices, higher quality goods and services. The customer decides where money flows, and that is exactly how it should work.

What Investors Need to Watch

Here is why this matters for your portfolio and your financial future:

• Policy risk is rising on both sides of the aisle, as populist economic ideas gain mainstream acceptance
• Attacks on free market principles from political leaders signal potential for increased regulation and market intervention
• Conflating crony capitalism with free market capitalism leads to policy solutions that punish competition rather than protect it
• Investors who ignore political risk in their planning do so at their own expense

The enemy of the American economy is not capitalism. It is the corrupt version of it where politically connected insiders write the rules to eliminate competition. That is what we should be fighting. Not the system that built the greatest wealth-creation engine in human history.