Crony Capitalism: Socialism for Tycoons

Many of my libertarian and conservative friends often regale the virtues of capitalism and free markets. Some of them however understand that much of what our system looks like these days is an example Crony Capitalism. Here is how Wikipedia defines it:

Crony capitalism is a term describing a capitalist economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, and so forth.

Nicholas D. Kristof shares this about it in his New York Times opinion piece titled "Crony Capitalism Comes Home".
Here are a few of his thoughts:

I’m as passionate a believer in capitalism as anyone. My Krzysztofowicz cousins (who didn’t shorten the family name) lived in Poland, and their experience with Communism taught me that the way to raise living standards is capitalism. But, in recent years, some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us.
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Capitalism is so successful an economic system partly because of an internal discipline that allows for loss and even bankruptcy. It’s the possibility of failure that creates the opportunity for triumph. Yet many of America’s major banks are too big to fail, so they can privatize profits while socializing risk.

The upshot is that financial institutions boost leverage in search of supersize profits and bonuses. Banks pretend that risk is eliminated because it’s securitized. Rating agencies accept money to issue an imprimatur that turns out to be meaningless. The system teeters, and then the taxpayer rushes in to bail bankers out. Where’s the accountability?

The lack of accountability in Crony Capitalism is troubling. The lawmakers in DC do not seem to have it. The executives in Corporate America do not want it. And the rest of us seem powerless. Small wonder that some feel a need to protest.