Free the Markets, Mr. Romney, End the Favors
How You Subsidize the Oil Cos to Wreck the Planet
Subsidies separate the true marketer and the true steward from the false. We trim, blend, and append three 2012 articles from: (1) Weekly Wastebasket, Mar 30, on agir-biz by TCS; (2) TomDispatch (published also at LA Times), Apr 5, on Big Oil by B. McKibben (Middlebury College, founder of 350.org); and (3) and Los Angeles Times, Apr 10, on Big Business by J. Goldberg.
by Taxpayers for Common Sense, by Bill McKibben, and by Jonah Goldberg
Don't Fear the REAPer
It's time to put misguided federal handouts to agriculture out to pasture. Farm businesses are experiencing near record income -- $98.1 billion in 2011. It's time for Congress to stop shoveling them taxpayer dollars.
Cash is given to owners of farmland regardless of current crop prices, and there's not even a requirement these crops actually be grown on the land receiving payments. Such "farmers" as Charles Schwab, subdivision homeowners in Texas, and even folks in DC get a share of $5 billion in federal dollars paid out each year.
The President proposed eliminating such direct payments last year, leaders of the Agriculture Committees have acknowledged a need to move on, and even the American Farm Bureau has called for their end.
Of course, that's just the tip of the iceberg, and much larger cuts should be enacted. The Reducing the Deficit through Eliminating Agriculture Direct Payment Subsidies Act of 2011 (REAPS), introduced by Congressman Jeff Flake (R-AZ), is a good first step.
Agriculture is a very technologically advanced sophisticated business and it doesn't need to be on the corporate welfare dole.
To read more
JJS: From handouts to Big Agri to same for Big Oil. Note both farmland and petroleum are natural resources, goods not created by anyone’s labor or capital. Thus the few who control such parts of Earth get “rents” or profits without production.
How You Subsidize the Energy Giants to Wreck the Planet
New Jersey Senator Robert Menendez proposed ending some of the billions of dollars in handouts enjoyed by the fossil-fuel industry with a “Repeal Big Oil Tax Subsidies Act.” President Obama calls for an end to oil subsidies at every stop on his fundraising blitz -- even at those stops where he’s also promising to “drill everywhere.” And Vermont Senator Bernie Sanders will introduce a bill that tackles all fossil fuels and their purveyors.
Depending on what you count, freebie cash for an industry already making historic profits reaches $40 billion annually.
Most who vote in Congress each year to continue subsidies have taken campaign donations from big energy companies. Bribery is what it is; they’ve been given small gifts by outfits to whom they then return large presents, using our money, not theirs. Fossil-fuel companies get $59 back for every dollar they spend on donations and lobbying.
The biggest subsidy we give the fossil-fuel business: license to pour their waste into the atmosphere for free. And then there’s the small matter of the money we sink into the military might we must employ to guard the various places they suck oil from.
Getting rid of all the planet’s fossil-fuel subsidies could get us halfway to ending the threat of climate change. If we don’t get off of fossil fuels soon, our prospects as a civilization are grim indeed. Oil is the richest industry on Earth, a planet they’re helping wreck, and we’re paying them a bonus to do it.
To read more
JJS: McKibben, like many politically opinionated people, has subsidies he likes, others he doesn't. But by putting government before climate, he keeps away some people who'd be willing to put climate before government. Now let's turn from handouts to certain industries to subsidies for Big Business in general -- an editorial at a major paper.
Free the markets, Mr. Romney
Mitt Romney said, "Washington has to become an ally of business, not the opposition of business." This to me is a worrisome statement.
Romney's rhetoric overlooks the broad perception in this country, from Left to Right, that the game is rigged in favor of the well-connected and the too-big-to-fail.
Over the last few years, the country has been subjected to a tutorial about the role of government. Now a lot more Americans understand the problems with corporatism, crony capitalism, and industrial policy.
When government takes it upon itself to be the ally of business, certain biases often take over. For instance, existing industries have a huge advantage over ones that haven't been created yet. A more obvious bias is toward big companies over small ones. Big companies create constituencies and can afford lobbyists to make their case. Moreover, big business becomes a tempting vehicle for other policies like, say, providing healthcare.
Getting into a contest with President Obama over who is a better friend of business is not the winner some might think. Obama has given billions to big businesses, from Wall Street to Detroit. The stimulus was full of tax breaks and gimmicks aimed at business; he calls them special-interest loopholes when companies he doesn't like get them.
Big corporations are enjoying record profits under Obama, but as Romney noted, "New business start-ups -- and that's normally where we get job growth after a recession -- are down to the lowest level in 30 years." He needs to follow that train of thought.
One of the things Romney did at Bain Capital was take businesses apart. And that was a good thing. Free markets depend on failure, or what Joseph Schumpeter called "creative destruction." You can't have light bulbs without destroying much of the candle-making business. At Bain, Romney was part of the process that fueled innovation.
There's a huge difference between being pro-business and pro-free market. The government's role in the free market is to keep it free and fair, not to play favorites.
What if Romney wins? A Romney White House that starts out saying "How can we help business?" would end up in a bad place, and so would America.
To read more
JJS: All subsidies -- and taxes -- have problems. They all distort prices, require expensive bureaucracy, violate quid pro quo, and reinforce the status quo. Are problematic subsidies (and taxes) even necessary? Would you still get the services many people expect from government? Like public schools and medical insurance (only for seniors in the US)?
Sure, there are substitutes to subsidies. For example, you could recover all the rents we spend for farmland and oil and natural goods in general (which would be a good thing to do anyway) and with that fat spending stream direct a share into everyone’s pockets, sort of like Alaska’s oil dividend. Getting an extra $1k/mnth, citizens could choose their own teachers and doctors who’d meet their specific needs.
Rather than argue against certain subsidies as being wasteful or unfair or ecocidal, we could more simply argue against subsidies in general. Similarly, rather than argue against certain taxes in particular for being unfair or inefficient, we could more simply argue against taxation in general. We could promote land dues to replace taxes and a citizens’ dividend to replace subsidies -- the policy of geonomics, or, of natural law.
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
As China, the US, etc confront corruption …
The view of both us and a big newspaper
ClawBack details tax bias for big business ...
Email this article Sign up for free Progress Report updates via email
What are your views? Share your opinions with The Progress Report:
Page One Page Two Archive Discussion Room Letters What's Geoism?