The new tycoonery.

• Author: Fraser, Steve
• Position: The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics - Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill - Book review

The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics by Jonathan Chait Houghton Mifflin. 304 pages. $25.

Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) by David Cay Johnston Portfolio. 352 pages. $24.95.

As I write this review, the front page of the April 16 New York Times carries two headlines that say it all: "Big Tax Breaks for Business in Housing Bill" and "Wall Street Winners Hit a New Jackpot: Billion-Dollar Paydays." The first tells the story of how our duly elected representatives in Congress, faced by a national calamity of home foreclosures and mass bankruptcies, have managed to craft a piece of legislation that will turn that disaster into a boondoggle of tax breaks for automakers, airlines, and energy producers. The second shows how top hedge fund managers pull down bounties "unimaginable, even in Wall Street's rarefied realms." The Big Con and Free Lunch join a vast armada of literature chronicling the astonishing inequalities of wealth and income that have earned our own era the dubious sobriquet "second Gilded Age." Indeed, at no time since the late 1920s has the gap between the haves and the have-nots been so gigantic.

New York Times Pulitzer-winning reporter David Cay Johnston's Free Lunch amounts to a rap sheet itemizing with one appalling story after another how the big business community has managed to turn all levels of government into a gigantic slush fund--behavior that ought to be considered criminal and sometimes has amounted to murder. Johnston sometimes calls this "corporate socialism," by which he means a system in which the American taxpayer is assiduously fleeced to subsidize the exorbitant profits or the equally exorbitant losses of corporate America.

Johnston is a great admirer of Adam Smith and often makes use of pointed remarks by the eighteenth century avatar of the free market to skewer our contemporary tycoons who pretend to be Smith's disciples but in real life stay as far away from the competitive marketplace as their tax shelters, government subsidies, lobbying machines, and legal sleights-of-hand will allow them. Thus Johnston quotes Smith: "This disposition to admire, and almost to worship, the rich and the powerful ... is, at the same time, the greatest and most universal cause of the corruption of our moral sentiments."

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Who has been more admired--worshipped even--over the past quarter century than Warren Buffett, the "Oracle of Omaha"? Buffett, legend would have it, is a plain-spoken, down-home billionaire who stands up for those hoary traditions of hard work, long-term productive investment, and self-reliance. Well, not quite. Buffett's company, Berkshire Hathaway, benefited to the tune of two-thirds of a billion dollars in interest-free government loans to float a call center...