However, it is a good time to do this review of political corporate cronyism for a number of reasons. First, it is always good to see how our politicians in Washington are handing out our tax dollars to their business and union cronies, usually for a return payment to their perpetual reelection campaigns.
Second, House and Senate politicians have been in secret negotiations over the past few months, trying to finally come up with a formal and rational Federal budget, something they have not done for the past five years. I expect to hear the President, and Reid and Pelosi start yelling really soon that they see a need for tax increases in order to have a sound budget.
Today, we will again rebut this insanity by showing how billions and billions of dollars could be trimmed from the Federal budget spending stream by stopping the massive corporate welfare that the Federal government indulges in with our wealth. Our constant assertion that no American, rich or poor, should pay an additional penny in taxes as long as the Federal government is as wasteful, petty, and fraud infested with our tax wealth and, as we will see today, as long as they continually give out our tax wealth to their cronies in big business is still valid.
The main basis for this post is an article that was written by Tim Carney in a March Washington Examiner piece: “Trickle-down Dems would line pockets of big business.” He took a detailed look at the budget plan that Senate Democrats had put together.
Remember, Democrats have always tried to position themselves as the protector of the common citizen and that the evil Republicans were in bed with the big, bad corporations that were abusing American citizens and workers in every way possible. As you will see, every politician, including Democrats, are very good at abusing us, as illustrated by their proposed budget back in March, an approach that I bet has not changed at all since then.
When reviewing the following corporate welfare programs the Senate Democrats were propping in that early 2013 budget proposal, keep in mind how they tried to set up the budget philosophy, in their own words: "The Senate Budget takes the position that trickle-down economics has failed as an economic policy and that true national prosperity comes from the middle out, not the top down."
Trickle down economics has failed? That is their position in the intro to their budget. But they then go off and start giving away billions of taxpayer dollars to rich corporations in the weak, often vain, hope that this will some how trickle down the corporate ladder and create jobs. Hypocrisy at its worst.
1) The so-called Federal Export-Import Bank is supposed to support U.S. exports by lending taxpayer money or guaranteeing private loans to foreign buyers of U.S. goods. Yes, the American taxpayer, via the Federal government, gives our wealth to foreigners to buy products from U.S. companies. The Democrats wanted to keep that entity in existence in their budget proposal.
This might be a good idea except for the fact that like many years before, in 2012 Ex-Im dedicated more than 80 percent of its loan-guarantee dollars to subsidizing Boeing sales. The overwhelming majority of the program’s dollars goes to a single company. Shouldn’t the shareholders and owners of Boeing be the ones helping finance the purchase of its products, not the American taxpayer?
The writer, Tim Carney, points out the hypocrisy quite nicely: “Democrats may argue that these Boeing subsidies -- and Boeing just got a $1.2 billion guarantee last week -- create jobs. But a party that "creates jobs" by giving taxpayer subsidies to Boeing should not complain about "trickle-down economics."
2) Another crony infested proposal by the Senate Democrats was a $20 billion "investment" in broadband -- laying fiber optics, especially in rural areas. But the New York Times published a story last February about an 11-student schoolhouse in rural Colorado, eleven students total, which received three fiber-optic Internet lines, funded by a whopping $100 million taxpayer grant to a consortium featuring IBM. That comes out to about $33 million for each line, about $9 million for each of eleven students.
Who's really benefiting here, the students or the companies? And how many “jobs” were created with this $100 million “investment? Probably none, if only three lines were installed. Imagine how much money would be wasted if the Senate actually gave out $20 billion in the same manner.
3) Back within that early 2013 budget attempt was a call to spend money on "Investing in life science research." To prove their point and the priority for spending more on life science research (whatever that means), the Senate Democrats referenced an important sounding group called United for Medical Research (UMR).
Who or what is UMR? UMR represents two of the biggest lobbying organizations in Washington: the Biotechnology Industry Organization and the Pharmaceutical Research and Manufacturers of America. Sounds like those folks might have a stake in spending billions on “life science research.”
But this is the same inane argument as the Ex-Im Bank is for Boeing: if this research is so important and so lucrative, than the businesses and companies behind the UMR should be funding the research out of their shareholder bucket of cash, not the American taxpayer. It is the shareholders who will get the eventual big payoff from the research with likely very few jobs created in the process.
4) Also cited in the Democratic budget proposal is the Alliance for a Stronger FDA, which is another group funded by BIO, PhRMA, Pfizer, Merck, Eli Lilly and Johnson & Johnson. So the big drug companies are at the teller’s window also, looking to get the American taxpayer to fund what they should be paying for from a research perspective.
5) Not mentioned in the article is the hundreds of other sweetheart deals that corporations get from Washington. Solyndra and other crony infested alternative energy companies wasted billions of dollars of taxpayer wealth with nothing in return from an alternative energy perspective. Last week, we talked how General Motors will never repay the American taxpayer the $10 billion it still owes us. Fannie Mae and Freddie Mac at last count were approaching almost $200 billion worth of taxpayer bailout costs. Democrats had no problem funding these major corporations with taxpayer payer wealth.
True capitalism requires a level playing field where all the competitors live, thrive or die based on their own hard word, abilities, and innovation. Crony capitalism, as practiced by the Senate Democrats in their budget proposal and day-to-day activities, intentionally tilts the playing field to the advantage of connected companies, usually big companies, that milk the capitalism culture in Washington to their own benefit and the detriment of the American taxpayer and other, more honest competitors.
Consider some information from the political campaign tracking website, Open secrets. According to their analysis, the following companies contributed the indicated amounts of money to politicians:
- In 2012, the Boeing corporation contributed $3.4 million to election campaigns and spent $15.6 million on lobbying.
- Their level of political contributions placed them in the top 99.6% of all contributors and their lobbying expenses placed them in the top 99.7% of all companies that spent money on lobbying.
- In 2012, Johnson and Johnson contributed $1.4 million to election campaigns and spent $5.9 million on lobbying.
- Their level of political contributions placed them in the top 98.7% of all contributors and their lobbying expenses placed them in the top 98.2% of all companies that spent money on lobbying.
The most insulting part of the whole Senate Democrats’ budget process was the thought that this was NOT trickle down economics. It is the exact definition of trickle down economics, give taxpayer money to preferred corporate friends and cronies and hope that some incremental jobs might get created, enough to get the incumbents reelected.
I hate it when they think we are too stupid to recognize their lack of integrity and depth. A pathetic way to run a country. A way that leads to wasted spending, declining investment, $17 TRILLION debt loads, crony corruption, and just a slimy feeling of what Washington is all about.
So when the Democrats emerge from the current secret budget talks, ask them how 1) how much is Boeing, General Motors, Merck, and others getting from the taxpayers this time, and 2) why should we swallow any tax increases on any common American citizen while these corporations are getting billions for spending millions.
Keep the following image in mind while you wait for the answers to these questions, courtesy of Tim Carney:
There's a colorful description for this sort of policy: feeding the horse to feed the birds. If you want to feed birds, you could set out birdseed in a bird feeder. Or you could throw some hay to the horses, and let the birds feast on what comes out the other end.
Here's a more polite term for the Democrats' economic approach: "trickle down."
BS is BS no matter what you call it. Or in Mr. Carney's example, we have horses rather than bulls so HS is HS no matter what you call it.
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