cronyism

Taxpayers on the hook for $1.2 trillion in corporate welfare since 2000

When we think about welfare, most of us think about government programs aimed at reducing poverty. While we point out that the poverty rate has remained virtually unchanged since the “war on poverty” began in 1964, despite spending $12 trillion, we tend to ignore the money spent on corporate welfare.

Most Republicans turn a blind eye to corporate welfare, after all, they say, it’s “good for business.” But what’s good for business isn’t always good for taxpayers. Writing at National Review, Stephen Moore points us to a study showing that the federal government has doled out $1.2 trillion in corporate welfare over since 2000, a figure that doesn’t even scratch the surface given the pervasiveness of bailouts and subsidies for favored, politically-connected industries:

This week an Illinois-based watchdog group, Open the Books, issued a new report that scrupulously tallies up all federal grants, loans, direct payments, and insurance subsidies flowing to individuals and companies. It examined all accounts from the Department of Commerce to the Department of Transportation and found that corporate-welfare payments from the federal government to the Fortune 100 companies, from 2000 to 2012, amounted to $1.2 trillion. I recommend a visit to the website openthebooks.com, if you can stomach it.

Netflix CEO Reed Hastings Said Something Dumb about ISPs

A version of this post originally appeared on George Scoville’s blog.

 

Courtesy of Politico Morning Tech, here’s a real doozie of a quote from the head of the world’s premier video streaming service:

Some big ISPs are extracting a toll because they can — they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay.

Woof. Charging a toll is exactly what ISPs are doing, not only because they can, but because they should:

Verizon can only supply a limited amount of mobile bandwidth on its 3G and 4G networks — just like a 12-volt battery can only supply a limited amount of power. When many users with no barrier to their consumption of data — or at least no barrier above a $30 per month fee — they have in effect incentives to over-consume the limited resource. This is a classic collective action/tragedy of the commons case, and the fact that, [when consumers face very low prices for network access], Verizon’s network experiences strain from lots of data-hungry consumers [and can’t keep up with demand], the current pricing system is inefficient.

American taxpayers funding Russian companies, conservative group says

Ex-Im Bank

The Club for Growth has waded into foreign policy, an unusual area for an organization that exclusively emphasizes free market policies, by urging on the U.S. Chamber of Commerce to join its call for an end to taxpayer-subsidized loans to Russian companies, amid escalating tensions between the United States and Russia.

In a statement on Wednesday, the Club for Growth pointed to a January 2013 story from Reuters on discussions between the Export-Import Bank and Gennady Timchenko, a Russian billionaire, for “U.S. government-backed funding to buy luxury aircraft.” Timchenko was described as “a long-time associate of Russian President Vladimir Putin.”

Another story highlighted in the statement was an August 2000 report from the Center for Public Integrity which noted that the Export-Import Bank had “guaranteed $489 million in credits to a Russian oil company whose roots are imbedded in a legacy of KGB and Communist Party corruption, as well as drug trafficking and organized crime funds

“We don’t think that the Export-Import Bank should exist at all, let alone even consider giving loans and loan guarantees to Russian oligarchs and companies with ties to the Russian mob,” said Club for Growth President Chris Chocola.

EconPop: Breaking Down the Economic Ideas of Films and TV Shows

EconPop: Dallas Buyers Club

There’s no denying that we live in a pop culture age, and it’s difficult to spread of limited government and free market ideas through ordinary means, especially if we plan to reach and engage young people.

Founded by economist Russ Roberts and John Papola, EconStories has already developed a unique way of communicating economic ideas through visual storytelling.

In 2010, the two created a hip-hop music video, “Fear the Boom and Bust,” in which the economic views of John Maynard Keynes and Friedrich Hayes were debated. The video came at a time when there was a debate over the merits of a $835 billion stimulus bill that was designed to lift the United States out of the throes of the Great Recession.

A little more than a year later, EconoStories released a second video, “Fight of the Century,” featuring Keynes and Hayek. The video focused on the lack of any real economic recovery despite billions and stimulus spending and consecutive years of $1+ trillion budget deficits. To date, the two videos have garnered more than 7.2 million views on YouTube.

United Liberty talked with John Papola, a director and producer, about EconStories’ latest project, EconPop, which is presented in partnership with the Moving Picture Institute. EconPop brings economic ideas found in popular movies and TV shows and breaks them down in a fun and unique way.

Today in Liberty: Facebook CEO expressed NSA frustrations to Obama, CFOs say minimum wage hike would curb hiring

“The greater the power, the more dangerous the abuse.” — Edmund Burke

— Pen and Phone: In its latest executive action, the Obama administration has decided to reverse cuts to Obamacare’s cost-sharing subsidies that it previously said would be trimmed because of the Budget Control Act, better known as the sequester. “Last year, the Office of Management and Budget (OMB) said the subsidies would face a roughly 7 percent cut under sequestration,” The Hill reports. “Budget officials changed that in their latest report, removing the subsides from a list of programs the sequester will hit.” Presumably, the administration will have to cut elsewhere in the budget to make up for preserving these subsidies.

Senate Democrats’ “talkathon” more about cronyism than climate change

Senate Democrats will begin an all-night “talkathon” later today and into Tuesday morning to try to raise congressional awareness to climate change, what USA Today describes as the first of many steps to put the issue on the radar before the 2014 mid-term election.

This charade really is more of a nod to big Democratic Party donors who would benefit from policies aimed at combating climate change, as Byron York explains. In short, it’s is another example of cronyism:

Today in Liberty: Keystone XL dealt a blow, Obamacare alternative endorsed by FreedomWorks, Thomas Sowell on Ted Cruz

“Many unions have contracts with employers that are based on a multiple of the prevailing minimum wage. If the minimum wage goes up, union salaries go up by a similar percentage.” — Neal Boortz

— Keystone XL hits a road block not named Obama: The Lancaster County District Court has shot down a 2012 state law that would have sped up the regulatory process to approve the Keystone XL pipeline. “TransCanada now must secure approval for the pipeline route from the state’s utility regulators — a step the 2012 Nebraska law sought to circumvent,” notes Zack Colman of the Washington Examiner. “Judge Stephanie Stacy said [Gov. Dave] Heineman’s move to approve the revised pipeline plan, as the law allowed, was unconstitutional because it wrested control of oil pipeline decisions from the state regulatory body, the Nebraska Public Service Commission. As such, Stacy ruled the law null and void.”

Jon Stewart blasts Obama’s corrupt diplomatic appointments

Jon Stewart on Obama's diplomatic appointees

Jon Stewart took aim at President Barack Obama’s diplomatic appointees in a segment on The Daily Show last night, mocking the White House for handing out ambassadorships to high-dollar campaign bundlers.

Stewart recalled his recent interview with House Minority Leader Nancy Pelosi (D-CA), in which she disputed the notion that money has corrupted Washington, though she said that Republicans are responsible for giving in to special interests.

“It’s good to know that Democrats are impervious to that, because it means that we don’t have to worry about things that Democrats are in charge of,” Stewart said. “For instance, the ambassadors appointed by our Democratic president. Surely he chooses them, then, on their merits.”

Stewart then cut away to footage of a couple of President Obama’s diplomatic nominees who, in Senate confirmation hearings, told senators that they had never visited the countries to which they’ve been appointed to represent American interests.

“Let me ask this, have any of you f**king people been to EPCOT Center? Have you been anywhere?” Stewart said. “Is there rule that ambassadors can’t have set foot in the country they’re going to ambassador? Would it ruin the surprise?”

“I mean, it definitely couldn’t be because the new Norway nominee raised $850,000 for the Obama reelection campaign, or the Argentinean one raised $500,000, or the Icelandic one bundled $1.6 million. Because that would mean not only would Democrats be seen as corrupt, Nancy Pelosi told me personally that only Republicans are,” he added.

New Healthcare.gov contractor’s history rife with tech problems, ethical issues

The new contractor for the federal Obamacare exchange, Healthcare.gov, comes with a sketchy history, according to a weekend report from the Washington Post, one filled with technical problems and allegations of ethical issues.

In January, the Department of Health and Human Services (HHS) fired CGI Federal, the contractor initially tasked with the construction of Healthcare.gov, including the website and backend systems, after the disastrous rollout. The department tasked with implementing the law tapped Accenture to take over the project, bypassing the competitive bidding process.

Though the change in contractors is a sign that the administration is “doing something” to get past the botched rollout of Healthcare.gov, the Washington Post explains that Accenture has a history of problems with state and federal contractors (emphasis added):

Accenture, the contractor urgently tapped to help fix the federal health-insurance Web site, is a favorite of corporate America but has a record that includes troubled projects and allegations of ethical lapses, a review of the consulting giant’s history shows.

Video: Meet the “Kronies”

The Kronies

In vain of 1980s and early 1990s superhero action figures, a recently released video takes aim at the collusion between government and K Street corporations to crush competition from smaller competitors.

The Kronies shows five powerful lobbyist superheroes — Kaptain Korn, Big G, Parts & Labor, Ariel Stryker, and Bankor — who use their political influence to get protectionist tariffs, bailouts, and other deals for their rent-seeking industries. Or, as the video puts it, “Mandating, Tarrify-ing, Inflating, and Boondoggling their way to profits powered by their special konnection to the G-Force.”

Though it’s unclear who is behind the video, it sums up perfectly the cronyism in Washington. Rep. Justin Amash (R-MI), for example,” wrote on his Facebook page, “Here’s how government ‘works’ in one short video.”


The views and opinions expressed by individual authors are not necessarily those of other authors, advertisers, developers or editors at United Liberty.