The dictionary definition of crony capitalism is “an economic system characterized by close, mutually advantageous relationships between business leaders and government officials.” By contrast, real capitalism is the system whereby private companies ply their trades in an open and fair marketplace. Which definition applies to a deal that the Orange County Board of Supervisors recently approved at John Wayne Airport?
This month the board voted 3-to-1 for a deal that allows Clay Lacy Aviation to build three new hangars to serve private airplanes. Per the VoiceofOC, “the county government won’t be able to use the space until at least 2055 when Clay Lacy’s lease ends, aside from a small area of the project dedicated to the OC Sheriff’s Department.” Wagner voted “no” vote, with Janet Nguyen abstaining.
Supporters called the project a win for the county given that a company is upgrading its infrastructure. But Wagner described it as a deal that’s unfair to other taxpayers. That’s because the county has granted the private company the right to float private-activity bonds — an authority generally reserved to public agencies. Under the arrangement, the company will pay the bonds with private money, but it avoids paying taxes on the profits.
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Wagner was right to raise objections. This plan fits the definition of crony capitalism.
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