Skip to comments.Corporate Welfare
Posted on 03/23/2011 4:19:34 AM PDT by Kaslin
In America today, the biggest recipients of handouts are not poor people. They're corporations.
General Electric CEO Jeffrey R. Immelt is super-close to President Obama. The president named Immelt chairman of his Council on Jobs and Competitiveness. Before that, Immelt was on Obama's Economic Recovery Advisory Board. He's a regular companion when Obama travels abroad to hawk American exports. (Why does business need government to do that?)
"Jeff Immelt is perhaps the CEO who is most cozy with President Obama," says journalist Tim Carney. "General Electric is structuring their business around where government is going ... high-speed rail, solar, wind. GE is lining up to get what government is handing out."
Businesses love to have government as their partner. There's safety in it. Why take chances in a marketplace full of fickle consumers and investors, when you can get secure money and favors from the taxpayers? It's an old story, and free-market advocates as far back as Adam Smith warned against it. Unfortunately, too many people think "free market" means pro-business. It doesn't. Free market means laissez faire -- prohibit force and fraud, but otherwise leave the marketplace alone. No subsidies, no privileges, no arbitrary regulations. Competition is the most effective regulator.
Left-wingers criticize corporate welfare until it's for something they like -- for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
But for some reason, other products and services are different, according to people like Obama and Draut.
"We desperately need high-speed rail in this country," she says, meaning the taxpayers must be forced to finance it.
The government gives companies billions of dollars to develop new trains. Guess who receives some of that money.
The problem is that government has no wealth of its own. All it can do is move wealth from where the market would have channeled it to where politicians want it. Who knows what would have happened if free people had the money that goes to high-speed rail? Maybe cancer would have been cured.
"The private sector isn't going to cure cancer by itself," Draut says.
Greedy drug companies aren't going to cure cancer? I asked.
"They would have by now, if they could."
People with a central planner's mentality have what F.A. Hayek called "the fatal conceit."
I'd have thought the fall of the Soviet Union would have taught us that central planning is destructive, but the conceit of the central planners lives on. Maybe the problem isn't merely economic ignorance. Maybe it's something more sinister: a wish to keep the freeloading system going. After all, if politicians and business leaders admit that government cannot play a constructive role in the economy, what grounds would there be for subsidies, shelter from competitors and other privileges at the people's expense? The anti-free-market ideology is a vast rationalization for favoritism.
The favors, of course, go those who are best at lobbying for them, those with connections and the means to make big campaign contributions. So the government pours billions of taxpayer dollars into wind farms that are half-owned ... by GE.
I bet it's a waste of money.
"Well, maybe it is," Draut says. "But it should be one thing that we, as a nation, are investing in so that we aren't left behind."
This sort of nonsense provides intellectual cover for privilege and crony capitalism.
I guess it keeps them from moving jobs overseas. Or not. Which is a good thing, or so the Free Traders tell me.
Stossel, an economic idiot for sure.
So he thinks businesses are greedy and corporations get welfare?
The buzz words are quite revealing.
and it might be about to get a little worse:
The free ride should be over for everyone. Corporations too.
Tell me again why we are subsidizing Big Oil? Big Pharma? Agriculture’s Mega Farms?
Those gimme’s too should be on the block.
Lefties have a point that we can’t balance the budget on the backs of the poor. I am sensitive to folks who truly need help. But GE isn’t one of those folks.
They say “if they could cure cancer they would have”. well Government has been throwing money at it and other diseases for a good 60 years and they haven’t done it either.
Government has been throwing money away period for damn little result.
He may be off on the greed, but welfare is the right term to use regarding government handouts to corporations.
Go read the article again, and if you have to, again and again. He is talking about GE and Immelt , who was the CEO of General Electric and is a big 0bama ass kisser
Furthermore, this administration has shown over and over again that its judgment is not just flawed but upside down.
GE's Board needs to make plans to replaced Immelt ASAP.
Thanks, you explained it better then I could
Government control of private property, including businesses, for the common good, as determined by government, is fascism.
I wish people would use that word more. It’s a good word and an accurate reflection of what’s been happening in this country since FDR.
The recipients of the largest amount of Federal money are the elderly to the tune of $1,300 Billion for Social Security and Medicare.
I would describe it as 'tough-in-check'.
IMO - Stossel is one of the good guys - so I start from there when I read his work.
If he was too afraid to single out GE then that’s his problem.
I’ve heard those buzzwords from the left for too long.
If you think businesses are ‘greedy’ and corporations get ‘welfare’ then that’s your prerogative.
Corporations don’t pay taxes. Their shareholders and their customers pay the tax. Less hiring too.
IMHO, Corporations should be paying little or no taxes to the federal government.
Taxes of a reasonable amount to the state or city where they are located should be something negotiated by those entities.
Stossel has been writing on crony capitalism for a while now. The buzz words are used to describe corporations which are seduced by government into becoming part of "creeping socialism."
” corporations which are seduced by government “
Just as ‘democracy can only survive until the populace discovers that it can vote itself largesse from the public coffers’, capitalism can only survive until corporations discover that they can co-opt the power of Government for competitive advantage...
If there was ‘seduction’, it was mutual and consenting....
Isn't it always?
"The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism ownership of government by an individual, by a group, or by any other controlling private power" FDR (and he would know ;-) )
end all corporate and agricultural subsidies
If only Jack Welch was still heading up GE...this Immelt fool is just an idiot. I think he is putting his eggs in the wrong basket.
But if I recall my American History correctly, if it wasn't for 'Corporate Welfare', aka: Deal Making with the FedGov, the USA's westward expansion into 'Injun Country' never would have happened (Or occurred as fast as it did).
That said 'Corporate Welfare' I refer to was with those *evil* Railroad Barons. And where those *evil* Baron's tracks were laid, towns, people and families soon followed. Additional 'Corporate Welfare' for the *evil* RR Baron's gave us the First Transcontinental Railroad and the 'Golden Spike' - which ended the race between the Central Pacific and Union Pacific railroads.
So come on John. If your beef is with GE man-up and fricken say it. Don't hide behind an ambiguous 'Corporate Welfare' rant.
Regulatory capture is the objective.
A million here or there, whatever it takes.
Just so long as the spec our products.
That is very true and corporations go along with it because they think it make their competitors have to play by the same rules...[tho that isn’t working too well when the goods are coming from overseas, in some cases].
Plus, corporations, the larger ones anyway, don’t particularly care what the regulations etc cost anyone. They just shrug and point to government...and mark up the cost of complying.
when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you when you see corruption being rewarded and honesty becoming a self-sacrifice you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.
But if I recall my American History correctly, if it wasn’t for ‘Corporate Welfare’, aka: Deal Making with the FedGov, the USA’s westward expansion into ‘Injun Country’ never would have happened (Or occurred as fast as it did).
Thus, the “Corporate Welfare” aka Deal Making with the FedGov, led inexorably to even more government interference with the economy.
This happens all the time - government actions lead to bad outcomes that justify additional government actions. Current case in point: “Well meaning” politicians subsidize “green energy”, get critized because the promise of cheap clean energy is not realized, and pass legislation to demand power companies buy a quota of “green energy”, causing power rates to increase.
Whether it is ethonol, wildmills, solar, electric cars ... it is crony capitalism, where the government is picking winners and losers ... except that the taxpayers lose.
The end doesn’t justify the means. Taking people’s money and giving it to someone else is thievery.
You two are just the type of “conservative” this article was written to address.
That's a line. When sellers can't shove the tax to their buyers, they eat the tax out of their profits and their shareholders' returns -- they pay.
Signing up the public to pay business taxes directly and take full responsibility for that revenue handle has been a 40-year holy grail of the pigs at the trough.
IMHO, Corporations should be paying little or no taxes to the federal government.
Cant. Garbage. "IMHO you ought to be paying my property tax." -- How do you like that one? Hey, I got expenses!!
Clarity bump, bears repeating. Ayn Rand used to puke on ideas like that -- at book-length.
He did. He wrapped it around the Tim Carney quote, which pointed directly at GE and Immelt and said that GE is doing corporate welfarism under Immelt's guidance:
"General Electric is structuring their business around where government is going ... high-speed rail, solar, wind. GE is lining up to get what government is handing out."
Seems clear enough to me. You're just pissed at Stossel for calling out Fortune 500 companies that prefer to milk the public.
I’m going to DVR Stossel tomorrow.
March 24, 2011 10:54 AM UTC by John Stossel
FREELOADERS: A John Stossel Fox News Special (10PM ET This Friday)
Some Americans actually make a living begging for money. Professional panhandlers, theyre called, sometimes making more than $100 in a day. John Stossel tried it in Manhattan, and made over $11 in one hourthat would be $23,000 a yeartax free!
Its a small example of why some said that the USA is turning into a nation of freeloaders. The Manhattan Institutes Heather MacDonald says that beggars shes encountered have the most deep-seated sense of entitlement that Ive ever come across.
GE CEO: “We are all Democrats Now”
now I get what he meant! Charlie Rangel, Tim Geithner,
but you'll never win in Iowa with that "meanspirited" talk.