Corporate Welfare

Cut Corporate Welfare

It's time to rein in crony capitalism.

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America's biggest welfare queen is someone you've probably never heard of. She's Hispanic. She's been living off other people's hard-earned tax money for years. And she's gotten rich doing it.

Her name is Iberdrola. She's a Spanish energy company that has invested in U.S. power facilities. And according to the advocacy group Good Jobs First, she's raked in more than $2 billion from Uncle Sam in just the past few years.

Good Jobs First maintains a subsidy tracker where you can look up which companies are getting rich from public funds. It recently issued a report on "Uncle Sam's Favorite Corporations—the companies that have gained the most from federal grants, special tax preferences, loans, and loan guarantees.

The biggest beneficiaries ("by an order of magnitude") are Bank of America, Citigroup, and other major financial institutions that were bailed out during the 2008 financial crisis. The Federal Reserve, the Troubled Asset Relief Program, and so on threw trillions of dollars at U.S. and foreign banks in a desperate effort to stabilize the financial system. It worked. In many cases (though not all), the institutions repaid the money. In some cases the federal government actually earned a profit.

But hundreds of other companies have raked in billions of dollars in direct grants. Along with Iberdrola, NextEra Energy, NRG Energy, Southern Company, Summit Power, and SCS Energy all have reaped more than $1 billion in federal largess, often receiving payments through programs meant to boost renewable energy. At the same time, many coal companies have taken huge sums from Washington through grants and coal production tax credits. So, as with farm programs—some of which subsidize farmers to farm more and some of which pay farmers to not farm at all—Washington thwarts its own objectives by subsidizing both renewable fuel sources and the fossil fuels they're supposed to replace.

In fact, Good Jobs First didn't even bother to include farm subsidies in its report on the "subsidy-industrial complex," because other organizations (such as the Environmental Working Group) already cover that ground quite thoroughly. Yet that still left Good Jobs First with more than 1,000 federal programs to comb through. Having done so, it was able to tally 164,000 individual subsidies of one sort or another.

Now, some of those "subsidies" are tax credits directed at individual economic actors (as opposed to a tax credit available to all businesses), which leads the group to overstate the actual amount of subsidization going on. Letting a company keep some of its own money is not the same thing as giving it money taken from others. Budget discussions often ignore that distinction, and some budget wonks even talk about tax breaks as "tax expenditures." But that misrepresents what is actually going on, because it takes a government's-eye view of things that treats all wealth as belonging first to Uncle Sam, who then divvies it up among various beneficiaries, one of whom is the people who actually earned it. It also leads to the illogical conclusion that raising taxes is synonymous with saving money.

Still, the Good Jobs First report reveals to an embarrassing degree just how much the federal government props up what are supposed to be private enterprises. A single section of one federal law—Section 1603 of the 2009 American Recovery and Reinvestment Act (ARRA)—has ladled out more than $23 billion to corporations, including $473 million to Duke Energy and $208 million to Exelon. A Portuguese company, EDP-Energias, has reaped more than $722 million through that section.

Then there are the companies that get their federal money from a wider array of sources. General Electric has received hundreds of millions in Energy Department, Commerce Department, and other agency funds. What's more, the handouts go mostly to some of America's biggest and richest corporations: Nearly half of all the funding flows to Fortune 500 companies. And the federal government is giving money to plenty of foreign corporations as well—including Toshiba, EDF-Electricite de France, and Siemens. (Smaller domestic beneficiaries include Dominion Resources and Berkshire Hathaway, parent company of The Richmond Times-Dispatch.)

And remember: All of this is merely the federal side of the subsidy-industrial complex. States and local governments have thrown huge sums at big corporations, too. Good Jobs First's report on those subsidies found states have handed out tens of billions of dollars through "megadeals" valued at $75 million and up—sometimes way up: Washington State handed over $8.7 billion to Boeing. In fiscal 2014 Boeing also had $18 billion in federal contracts, and over the past 15 years has collected $457 million in federal grants.

Good Jobs First is not optimistic about shutting off the spigot of taxpayer money anytime soon. It notes that other organizations, such as the Cato Institute, have been documenting egregious levels of corporate welfare for decades, with little to show for it except acid indigestion. Still, those looking for signs of hope can find at least one or two.

First, more states and localities have come to the realization that huge subsidies for pro sports stadiums and Hollywood movie shoots are suckers' bets. They may get around to extending the economic reasoning to other corporate handouts, too.

What's more, a recent public-opinion survey (the General Social Survey) found, as always, that Americans want government to spend more and tax less. Yet the public is broadly supportive of spending cuts in two relevant areas: welfare and foreign aid.

Slashing federal subsidies would cut corporate welfare, including welfare for foreign companies. Two birds. One stone. What's not to like?

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  1. No alt text?!
    Look at those two!

  2. “The Federal Reserve, the Troubled Asset Relief Program, and so on threw trillions of dollars at U.S. and foreign banks in a desperate effort to stabilize the financial system. It worked.”

    Uh, I think the best you can say is that ‘it didn’t turn into a rat hole’.
    Whether “it” had anything to do with “stabilizing the financial system” is certainly not proven.

    1. It didn’t work. The market adjusted, as it always does. Of course, the fact that we’ve not had a true recovery is indeed the work of the government.

      1. 3% GDP and 61 straight months of job growth in the private sector isn’t a “true recovery”?

        You are pretty damned stupid I know. But what constitutes a true recovery?

        1. BUUUUUUTTTTTTPPPPPLUUUUUUGGG

        2. One not driven by a bubble, characterized by widespread disability fraud, and people dropping out of the labor force at record rates.

          1. The same people who arranged and backstopped those loans are telling you how awesome those loans were for the economy. Who are you going to believe, 3% GDP or your own lying eyes?

            1. Or some shreeeking turd?

          2. Shreek believes the government numbers. They wouldn’t lie about the numbers, says Shreek. Because that would be wrong.

            *wipes a tear*

            Glorious.

        3. The 1920 depression started as bad as the 1929 depression. The 1920 depression was over and done with in 18 months. The 1929 depression took 16 years.

          The 2006 “Great Recession” is 9 years and counting. Unemployment only looks as good as it does because they stopped counting too many people.

          Fuck off, history repeating slaver.

        4. 61 straight months of job growth

          Which somehow just got us back to the number of jobs we used to have, not counting the millions of people who have joined our population.

          Yeah. Big success. Woot.

          1. It’s only employment growth if you forget population growth and ignore the people who have given up and fallen off the lists. Unemployment is still way down.

        5. Fuck you are one stupid demfag.

          First: When then government spends more money, guess what increases? That’s right the GDP. So your first number is laughable at best and complete crockshittery at worst.

          Second: Even if you take the 61 months of job growth seriously(and since this administration continues to drop off the long term unemployed in order to boost their numbers, we don’t), we have basically gotten back to where we were before the crash. Five years to get 8.4 million jobs back is nothing to crow over.

          Over all, I’d say only about 8% of your post is factually accurate.

      2. Pro Libertate|3.30.15 @ 12:11PM|#
        “It didn’t work”
        You’re right. Even Obo agrees:
        “In 2009, President Obama promised that the American Recovery and Reinvestment Act would “create or save” 3.5 million jobs over the next two years and that the unemployment rate would not rise above 8.5 percent. By the end of 2010, he promised, unemployment would have dropped to 7.25 percent. Furthermore, White House economists forecast that without ARRA spending, the unemployment rate would increase from 7 percent to 8.8 percent. Unfortunately, the administration’s estimates were wrong by a vast margin.”
        http://www.nationalreview.com/…..ue-de-rugy

  3. The biggest beneficiaries (“by an order of magnitude”) are Bank of America, Citigroup, and other major financial institutions that were bailed out during the 2008 financial crisis. The Federal Reserve, the Troubled Asset Relief Program, and so on threw trillions of dollars at U.S. and foreign banks in a desperate effort to stabilize the financial system.

    They were all loans, for crying out loud. As much as I hate Bush he (really Paulson forced the loans on them) didn’t just gift them trillions.

    1. Palin’s Buttplug|3.30.15 @ 12:07PM|#
      “They were all loans, for crying out loud.”

      You stupid shit, they were “loans” so long as there was a chance of recovering the money. If not, they were no longer “loans”, they were gifts of taxpayer money.
      Peddle youe slimy lies somewhere else, turd.

      1. Here. We earned $4.57 billion interest on Bank of America. About the same on Citi. Tell us who didn’t repay?

        https://projects.propublica.org/bailout

        A couple of small ones didn’t. Ones you wouldn’t know about.

    2. BUUUUUUUUUUTTPLUUUUUUUUUUUUUG

  4. OT: We’re going to need more spying now:

    Libertarians attack NSA, one confirmed dead

    Beat you to it, HuffPo.

    1. I thought it was tranny coke users attack!

      1. Tomato, tomahto.

        1. That’s the previous thread.

    2. U.S. law enforcement officials also tell CBS News that cocaine and a weapon were found in or near the vehicle, and it is now believed that the people in the car were men dressed as women.

      Yep, definitely libertarians.

      1. NEEDZ MOAR WEED

        1. and Mexican ass sex.

    3. It’s the culture of distrust fomented by libertarians with their anarchist ideas like the fourth amendment and their conspiracy theories like the fourth amendment.

  5. (Smaller domestic beneficiaries include Dominion Resources and Berkshire Hathaway, parent company of The Richmond Times-Dispatch.),/I

    So out of the hundreds of companies Berkshire owns the best you have is a dinky little paper?

    1. BUUUUUUTTPLUUUUUUUUUGGGGGG

    2. Since Hinkle is a writer for the Times-Dispatch it’s good to disclose that sort of thing. Otherwise people like you would accuse him of not disclosing. Good to know that you’ve gone full idiot on us.

    3. I was going to post the same quote, but with a bit better brand of snark:

      Been nice knowing you, A. Barton Hinkle.

      The best you could come up with is something oblivious to disclosure? You are a sad sad turd.

    4. “A. Barton Hinkle is senior editorial writer and a columnist at the Richmond Times-Dispatch.”

  6. Please do not feed the trolls, folks. This needs to be an adults only topic.

    1. Yeah, this is truly the dog returning to its vomit in this post.

    2. Sorry. Turd’s lies are insulting.

    3. Of course you don’t know shit about this topic.

      Some adult you are.

      1. Whereas ButtPlug knows nothing but shit.

          1. Damn, that’s some awesome praise. I will try to do my best, master!

  7. OT: LA Reason Meet-up report

    On Thursday, I met with Playa, Los Doyers, Sudden, and jesse at the Purple Orchid lounge near LAX. We swapped stories and chewed orphan bones for several hours. Playa generously bought pitcher after pitcher of Lagunitas IPA. Jesse has an amazing beard. Los Doyers could be a male model and Sudden looks a bit like Lawrence from Office Space. I wore my favorite werewolf shirt.

    In keeping with white guy drinking tradtion, here is my score: I drank a Longboard Lager, an Angry Orchard cider, and 4 or 5 glasses of IPA. After we said our farewells, I searched in vain for the McDonalds and the IHOP before returning to the bar to eat peanuts and dance with the the tiki statues while wearing a lampshade on my head.

    When I felt sober enough, I went west on Imperial Highway in search of the 405. For some reason, I turned north on La Cienega and something something ended up in Hollywood. I had the good luck to stumble upon one of the other McDonalds in the LA area and got directions to the 405.

    Incidents like this are the reason why I prefer not to drink anywhere more than a 5 minute walk from where I will be sleeping.

    1. oopsy, east on Imperial. Going west would have gotten wet.

    2. I prefer not to drink anywhere more than a 5 minute walk from where I will be sleeping.

      I’ve found that I can pass out within a five minute walk of any drinking establishment. Problem. Solved.

  8. Jesse has an amazing beard. Los Doyers could be a male model and Sudden looks a bit like Lawrence from Office Space. I wore my favorite werewolf shirt.

    Impossible. I have it on good authority we’re all neckbearded basement dwelling shut-ins heavily afflicted by either adult acne or facial psoriasis.

  9. The problem with cutting corporate welfare is that it is a fools errand.

    For all but the most hardcore anarchists among us your corporate welfare is my essential program and vis-versa.

    Is the F-35 a Federal Jobs Program and Payoff to defense contractors or a necessary component of national defense? The answer is that it is purely a matter of opinion. Are farm subsides corporate welfare or smart policy to ensure the nations food supply? Again, a matter of opinion.

    Cutting corporate welfare is one of those campaign slogans that sounds real good to everyone because who can really be against it. The problem is in the end it is meaningless because all it really says is “I want to stop the programs I don’t support and continue the ones I do”.

    1. The US could defend itself without the F-35. And farm subsidies make food more expensive than it would be otherwise.

      The corn ethanol subsidy/tax break caused a rise in corn prices worldwide which led to hunger in poor countries.

      http://www.forbes.com/fdc/welcome_mjx.shtml

      Which brings us to ethanol. It comes from corn. The amount to be produced is a mandate, not a choice. It’s 13.2 billion gallons this year. Last year we burnt up 40% of our crop. This year, given the expected yield reductions, we could easily destroy over half of our corn.

      The U.S. is by far the world’s largest producer, and our abundant supply is a major factor in keeping the price of the world’s most abundant feed and food grain low?generally around $3.00/bushel. That was before George W. Bush decided that the answer to global warming was to produce ethanol from corn. Hence the rise in corn price that commences with the 2007 passage of the ethanol mandates, followed soon by global food riots. $8.00 corn today will likely bring much more of the same.

    2. “Cutting corporate welfare is one of those campaign slogans that sounds real good to everyone because who can really be against it.”

      You could have stopped with that, and all would have been well.

      “”I want to stop the programs I don’t support and continue the ones I do”.”

      And if you’d just posted that, it would have been honest AND succinct.

    3. Spoken like a corporatist tool Rasilio. Nothing is true, all is permitted.

  10. Hnmm, the “largest” welfare queen has taken all of $2 billion in the past two years. The middle-class subsidies suck up more than that every single day.

    What’s more, a recent public-opinion survey (the General Social Survey) found, as always, that Americans want government to spend more and tax less.

    The Reason tribe never read the rest of the story, which is common knowledge every else (except the other tribes). Americans say government should spend less … except THEIR per programs. And only THEY should get tax cuts. Surprise?

    This is compounded because the Libertarian Establishment (Cato/Reason/Mercatus) has no fucking clue that the middle-class gravy train is several times larger than all the others combined … which is why they have NO tax or economic plan that makes a lick of sense. You can’t fix anything if you never learn why it’s broken.

    1. So because SS/Medicaire are the biggest tickets any discussion of any other wasteful program is completely off the table. Even when smaller programs are less politically toxic to go after.

      like everything else you have posted here, that makes no sense, Hihn

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