Corporate Welfare

GOP: Green Subsidies Bad, Boeing Subsidies Awesome!


You go to hail!

Timothy P. Carney with the latest from the crony capitalism beat:

Here's the state of Republican economic policy today: A $35 billion federal loan-guarantee program for wind and solar companies is scandalous "crony capitalism" that must be shut down and investigated.

But a $100 billion federal loan guarantee program mostly benefiting Boeing and Caterpillar should be expanded by 40 percent. […]

On Wednesday, a large majority of Republican congressmen voted to reauthorize [the Export-Import Bank] (whose current charter expires later this month) and increase to $140 billion the legal limit on taxpayer exposure from Ex-Im financing. Currently, taxpayers are exposed to nearly $100 billion in Ex-Im loans and loan guarantees.

By supporting Ex-Im, instead of trying to kill it, Republicans aren't merely calling into question the concept of free enterprise, they are passing up the chance to make President Obama's corporate welfare a central theme of the 2012 election.

Whole thing here. Reason has been criticizing the Ex-Im Bank since like forever.

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  1. Why does the government have to subsidize any business? Beyond buying votes, that is?

    I’ve heard the argument with companies like Boeing that we’re protecting our industrial capacity to make military equipment, but to the extent that’s necessary, buying stuff makes a whole lot more sense than handing money over.

    1. A rhetorical question, I presume.

      1. Mostly. I sure can’t think of another reason. “Jobs” means the same thing, and it’s bull, anyway.

    2. I think it begins and ends with buying votes. Stories like this also put the lie to the notion that Red and Blue are markedly different. No, the only difference is the way in which they choose to overspending our money.

      1. Hey, Blue unanimously chose to support this in this case.

        When GWB was President, a fair number of liberals opposed Ex-Im Bank funding. However, with a conservative and libertarian rebellion against it, 100% of the Dems fell in line rather than risk funding failing.

        It’s as though it’s all a charade, no?

    3. They claim that it’s cheaper to encourage exports than to buy it themselves.

      They’ll also claim that the Ex-Im Bank loans are actually profitable, so there’s no risk. That begs the question of why the private sector couldn’t or wouldn’t handle it themselves, though.

      1. They’ll also claim that the Ex-Im Bank loans are actually profitable, so there’s no risk. That begs the question of why the private sector couldn’t or wouldn’t handle it themselves, though.

        I have a feeling that the profit they make is more akin to “profit” than the popularly held notion of the term. Furthermore, I’d be inclined to believe that these programs use “accounting” to realize their profit potential. “Accounting” is the numerology of government agencies that is more existence justifier and sorcery for the governing classes than anything of useful application.

    4. Not just buying votes. Its also/primarily crony enrichment.

      Vote buying is more of an entitlement program thing, just because of the head count of an entitlement program versus a business subsidy.

      1. That’s true enough, but I think they’d have trouble doing that without the vote-buying component.

  2. Are there any astronomers out there that could tell me how large a meteor would have to be to annihilate Congress while in session and leave everyone else unharmed?

    1. So, do you just want to zap the Capital Building? Or do you want to get K Street as well?

      Uh oh, I think I have been identified as a domestic terrorist… I hear the DHS black helicopters.

      1. I’ll count everyone outside DC as “everyone else”. Omelette, eggs. Only way to be sure. Etc.

    2. Didn’t one of the Tom Clancy novels end with Congress being wiped out in a joint session? A Japanese Kamikaze airline pilot or something?

      1. Yes. A 747 which elevated Jack Ryan from a placeholder VP to President. IIRC it was Debt of Honor.

      2. It was also the beginning of “Executive Orders.”

  3. It makes sense when one remembers that the Republican party was founded by mercantilists and has remained remarkably true to that system.

    Mercantilism is not free-market capitalism. To the contrary, they believe in the state directing and protecting industry.

    Most people don’t realize that Adam Smith’s Wealth of Nations where the term ‘invisible hand of the market’ was coined was written as a rebuttal of mercantilism and the promotion of economic freedom as an alternative.

    Green energy doesn’t open export markets, because it doesn’t work. Companies like Boeing do. Hence, the promotion of Caterpillar and Boeing while refusing to throw money at windmills and renewable unicorn-fart powered generator plants is completely appropriate in a mercantilist society.

    1. Why is it that when a government prevents consumers in another country from purchasing goods abroad in the form of an embargo it is considered an act of war, but when the same politicians prevent consumers in their own country from purchasing goods from abroad they’re stimulating the economy?
      Makes no sense.

      1. because politicians from both parties share the contempt in which they hold the public. They are all so much smarter than the rest of us.

        1. They are all so much smarter than the rest of usWe the Little People {TM, (c), patent pending}.


        2. If you’re so smart, why can’t you get elected?

  4. Sounds like a pretty good plan to me dude.

  5. Sounds like a pretty good plan to me dude.

    1. It’s about time the squirrels started focusing their wrath on the spambot.

  6. The Boeing / Cat loans are better because, unlike many of the “Green” companies, they will actually pay them back.

    On the other hand, Boeing and Caterpillar and perfectly capable of raising capital with government help. So this is nothing more than a subsidy – like the European Airbus subsidies we get so hissy about.

  7. There were some young turks in the Reagan Administration who actually proposed ending a shitload of corporate welfare including the Ex-Im Bank.

    Luckily for the country older wiser heads soon put those whippersnappers in their place.

  8. No company sould get a government hand out.Not banks,cars,’green energy'( it’s fuel idiots) or ‘farmers’.Of coures a flat tax would be good too.

  9. Part of the reason green technology is uncompetitive is the massive subsidies to fossil fuels. Those subsidies are both direct and indirect. Subsidizing Boeing subsidizes oil consumption indirectly, as feed-in tariffs subsidize solar directly.

    1. I am appending an asterisk to your comment:

      *”Externalities” do not count as direct or indirect subsidies.

      But good point about subsidies for equipment adding artificially created demand for fuel. Subsidized roads do this as well, they do.

  10. Part of the reason green technology is uncompetitive is the massive subsidies to fossil fuels.

    I keep asking for examples, and the only one that shows up is, arguably, accelerated depreciation.

    Got any others? Because accelerated depreciation under the US tax code just doesn’t strike me as the sort of thing that would move the needle on, for example, the international oil markets.

    1. Maybe one could see the restrictions on the import of sugar cane as an indirect subsidy?

      1. Of fossil fuels? Corn isnt a fossil fuel.

        1. The quotas keep ethanol more expensive and inefficient therefore helping fossil fuels (yeah it’s a stretch, that why I ended with a question mark)

      2. Nah. The restrictions on sugar imports are all about helping Florida sugar plantation owners destroy the Everglades.

  11. There’s a chick in the advertising sidebar with her pants unzipped. But she’s giving semi-duckface, so -100000 points.

    1. I always get an ad for ‘a patriot’s one weird trick to slashing electricity rates and breaking Obama’s monopoly’ with a picture of a glassy eyed degenerate staring into the camera.

      I hate that guy.

      1. It stuns me how few people use adblock.

        1. I enjoy advertising, especially the unzipped ones.

        2. I use adblock, but after Reason showed they were willing to nuke the site from orbit to get rid of certain commenters I decided to turn it off for this site to give them extra revenue*. After Postrel left I endeavored to never send a cent to Reason, but I like to help out anyway I can.

          *Does this actually work? Am I slowing this site to comically slow levels for nothing? I’ve asked before but no one answered me.

          1. They only get paid if you click

            1. That’s what she said.

            2. Click products you like to show support for them advertising on reason. And click statism supporting advertisements to give their money to reason. But most of the shit, ignore it.

  12. Green energy to Boeing is like Homeopathy to Open Heart Surgery.

    However, neither should be subsidized. That is all.

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