Government protecting corporations - iteration #10,741,692

Here is a truly appalling story concerning the rise of corporatism in America.  The general issue I want to raise is this: most of those who defend capitalism in the sense that includes allowing for private ownership of the means of production, wage labor, and massive wealth disparities as a result, typically claim that genuine capitalism must be distinguished from "crony-capitalism" and that we cannot allow the government to become an organ for the support of the most economically powerful.  But I've simply never understood how this was supposed to work.  The whole theory of the beast presupposes that people are self-interested maximizers.  Does that not apply to those in government?  And if it does, then how exactly do we prevent their corruption?  Is there some magical way to take the possibility of graft in all its myriad forms from bending government to the will of those with the most money?  In short, if the watchdogs of the level playingfield are just people like us, growing up in a system that encourages self-interest and greed, why would one think there was any hope of stopping the slide from capitalism to corporatism.

Anyway, even if you don't share my concerns about the general issue, I trust that this story is revolting enough to be worth a post on its own.