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?