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Townhall...
Corporate Welfare
By John Stossel
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.
GE.
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.
Read it at Townhall
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