Monbiot: corporate handouts greater than profits
Since Battlepanda finds it remarkable that I’m not a corporate shill, now might be a good time to refer people to George Monbiot’s latest article in the Guardian[UK] — “They bleat about the free market, then hold out their begging bowls“.
As Larry Gambone of Porcupine Blog says of Monbiot’s piece in “The State Socialism Of the Rich – Again“:
Share This“…how corporations get more in government handouts than the profits they make.”
Corporate welfare dwarfs profits
Via Brad Spangler, here’s an article about the wonders of the “free market” and “globalization”:
In his book Perverse Subsidies, published in 2001, Professor Norman Myers estimates that when you add the direct payments US…
[...] Given widespread sentiments of frustration with corporate customer service generally, and looking at widespread corporate dependence on statist subsidy for revenue — the typical business culture looks less like hard nosed and practical stewardship of resources and more like a gigantic exercise in psychological power games, at the expense of actual production and commerce. [...]
That is frightening. From what I understand the same is not true in the States. We bail out airlines - so they could succumb to union demands, go broke and then get subsidies - but maybe that oo will end now that the market has returned to the airline industry. Otherwise we tend to believe that business should go under if its doing poorly - airlines were an exception because of the “barriers to entry” due to huge capital investment requirements (including the planes but also the airports) and the “importance” of them to the overall economy (similar arguments as the highways). Now that small airlines have poroven those theories wrong, we should end the bailouts. Farming is the other exception and that is of course all about helping “small farmers”, though it expanded into regulation of the food industry and help for the big food corporations. That, too should be ended along with tariffs and so forth. But overall, I think we spend about 5% of our budget on subsidies for small business and big corporation baliouts while we spend 60% still on subsidies to the poor.
I don’t think any corporation in the States makes more in subsidies than in profits, except the airlines in the bad years (when they make negative profits) and maybe a few farmers too in the bad years.
Ah, and looking closer at that article, I see that it mentions some US “handouts”. Only, then it says “American oil and gas companies gave $10.3m to political campaigns and received tax breaks worth $4bn.” Okay, I see how that is bribe-like, but it indicates no handout.
TAX BREAKS is letting you KEEP YOUR MONEY. Its not a handout. Its a socialist boon-doggle to try to say that you keeping your money is a gift. Its not the government’s money. If the “handouts” listed for the US are all tax breaks, then they cannot be counted. We are left still with airlines and farms (and steel and things that have tariffs).
It depends on how you count subsidies. The study Monbiot was referring to was conducted using a relatively mainstream approach. I, however, maintain that the vast bulk of corporate subsidies are nearly impossible to precisely quantify beyond the general evidence that they are astoundingly huge. The reason why is that the regulatory state creates a cartelizing effect which suppresses competition from small business — leaving large state-allied corporations with a a dependable monopolistic income stream by virtue of being the only game in town.
Interesting. Like anti-trust laws and regulations on industries? I agree that they are very bad for the market. However, small businesses regularly become big businesses, its not as if they market isn’t able to function at all. I would certainly like to see all regulation and anti-trust legislation repealed immediately, and find out though!
(Howver, that is not subsidies, that is favoritism - the difference being in the indirect nature, money is not redistrbuted, instead laws create hoops that must be jumped through and so forth, but firms may find ways or industries, technologies and so forth to get around all of it, etc.)
In the business world, where success is measured in red or black ink, government favoritism is a de facto form of subsidy.