Corporate welfare alive and well in the Obama administration

Who is happiest with President Obama’s nominees to head the EPA (Gina McCarthy) and the Energy Department (Ernest Moniz)? As Tim Carney explains, it’s neither environmentalists on the left nor free marketeers on the right, but the lobby groups that seek as many beneficial — for their corporate members — government subsidies and mandates as possible:

Although Obama regularly talks about ending “corporate welfare,” battling the “special interests” and creating a “level playing field,” he has steadfastly supported government favors for the ethanol industry — favors that increase costs for drivers, taxpayers, ranchers and grocery shoppers.

The Solar Energy Industries Association also applauded Obama’s nomination of McCarthy and Moniz. Solar companies profit from a production tax credit that Obama recently fought to extend, and a plethora of stimulus subsidies such as loan guarantees, tax credits and grants.

Check who’s investing big in solar energy, and you’ll notice a lot of politically connected names, such as Al Gore, Warren Buffett and Vinod Khosla.

And this is not a new thing for the president, Carney notes:

Obama never has been anti-business. His stimulus amounted to billions in corporate subsidies. His health care bill is a boon to hospitals and drug-makers. He was the most important supporter of Bush’s bailout outside the Bush administration in 2008.

Carney’s right. Obama isn’t anti-business. He’s anti-markets.

As I have written before, both liberals and conservatives need to recognize the nexus of Big Government and Big Business is more problematic than either one on its own. Democrats and Republicans both have a bad tendency to scold the industries they don’t like while protecting the ones they do.

Big Green Energy is one industry the Democrats definitely like. As Carney puts it, the idea is: “Politicians and bureaucrats tell business what to do, and business gets to make a profit doing it.”

But only the biggest businesses benefit from that arrangement: Only they can afford the lobbyists who help shape the legislation and absorb the costs the legislation foists on them. The upside for them is they become further entrenched in their markets, keeping smaller competitors at bay and, in some cases, virtually guaranteeing themselves profits.  That builds up a lot of economic sclerosis over time, and it’s one reason America has lost some of its competitive edge.

The good news is that our economy is still dynamic enough — as opposed to, say, many of those in continental Europe — to overcome that sclerosis if we start to unwind that Big Government/Big Business relationship. Obama’s nominees for EPA and Energy suggest that won’t be happening in the next four years. The GOP would do well to spend that time changing its own M.O.

– By Kyle Wingfield

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615 comments Add your comment

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:09 pm

Nicely written, Kyle!

Cheesy Grits is gone but not forgotten

March 8th, 2013
12:12 pm

Unemployment rate drops to lowest in four years

Thank you Obama !!!!

Politico

March 8th, 2013
12:14 pm

Kyle

Good article. Unfortunately I don’t foresee much more than rhetoric from both sides in terms of the relationship of government and big business.

One can go over the Gold Dome to see it is full steam ahead right here in the state. Of course that pales in comparison to the national context, but it is going on regardless.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:15 pm

“Unemployment rate drops to lowest in four years”

Thank you, American industries!

And the American people.

‘Cause naming one thing that government did in the last 2 years to help lower unemployment would be a waste of time and effort.

Centrist

March 8th, 2013
12:16 pm

Cronyism and patronage has been alive and well in both political parties forever. It is just the Democrats’ pretending otherwise that is new.

BuckeyeInGa

March 8th, 2013
12:17 pm

I agree with the article…between this and the banks not being prosecuted for laundering drug money..this is sad..

Cheesy Grits is gone but not forgotten

March 8th, 2013
12:18 pm

And the American people.

‘Cause naming one thing that government did in the last 2 years to help lower unemployment would be a waste of time and effort.

So its only Obama’s fault when it goes up

Gotcha.

Centrist

March 8th, 2013
12:19 pm

Record 89,304,000 Americans ‘Not in Labor Force’ — 296,000 Fewer Employed Since January. Not counting them in unemployment statistics is creative and purposely gives a false impression.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:22 pm

“So its only Obama’s fault when it goes up”

Reading comprehension with you is so lacking, Cheesy.

Did you see President Incompetent’s name in my post?

Finn McCool (the system isn't broken; it's fixed)

March 8th, 2013
12:28 pm

Good article Kyle. Glad to see the Cons are finally clued in.

Now you are ready for this:

http://deanbaker.net/books/the-conservative-nanny-state.htm

Yes, it’s a free book readable online.

independent thinker

March 8th, 2013
12:30 pm

Germany recently hit a milestone of supplying more than 1/3 of its electricity from solar. Of course to a bunch of hayseed members of the stupid party that fact has no significance. They think the only thing you can get from the sun is a sunburn and red neck.Keep paying GA. Power those whopping increases as they profit from the cost overruns on nuclear plants that may never be completed. And none of it comes from solar in sunny Georgia

Centrist

March 8th, 2013
12:30 pm

The liberal media only highlighting Republican cronyism is not new – just taken to new heights.

@@

March 8th, 2013
12:31 pm

Cronyism and patronage has been alive and well in both political parties forever. It is just the Democrats’ pretending otherwise that is new.

Kinda like the family values Republicans. Thing is sexual indiscretions have no impact on our economy.

We all pay for the dem’s hypocrisy.

Reform the tax code!

Lil' Barry Bailout - OBAMAPHONE!!!

March 8th, 2013
12:32 pm

In the Republican version of corporate welfare, Americans unnecessarily subsidize businesses that provide them with products and services they want or need. In the Obozo version, Americans give money to Obozo donors running fake businesses and then they go under while their Obozo-donating owners keep the cash.

JF McNamara

March 8th, 2013
12:39 pm

“Carney’s right. Obama isn’t anti-business. He’s anti-markets.”

Which markets is he against? Stock market at an all time high. Seems like all markets are doing fine to me.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:40 pm

Get rid of all loopholes and subsidies, including the mortgage interest deduction.

Just another subsidy for the builder and banking industries.

Take half the expected increase in revenue and put it towards rate reduction, the other half towards deficit reduction, and add a similar amount of dollars as spending cuts.

Bye, bye deficits!

HDB

March 8th, 2013
12:41 pm

“Obama isn’t anti-business. He’s anti-markets.”

WHOA!!! The same can be said for Republicans……

Ronald Reagan eliminated tax credits for residential uses of alternative energy, thereby closing the solar and wind markets to consumers. Because of that, GE…which was previously the industry leader in wind technology…lost ground to Siemens AG….who is now the leader in producing wind turbines. Germany now produces 1/5 of its energy from renewable sources (wind/solar, et. al.). When the tax credits were restored by Bill Clinton, the US had already lost ground to the Germans…and the Chinese!!

Both sides are guilty, Kyle………

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:42 pm

“Which markets is he against?”

Generally, the free market.

As to the stock market, it has little to do with the health of the economy.

Finn McCool (the system isn't broken; it's fixed)

March 8th, 2013
12:42 pm

Get rid of all loopholes and subsidies, including the mortgage interest deduction.

We can agree on this.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:46 pm

“Ronald Reagan eliminated tax credits for residential uses of alternative energy, thereby closing the solar and wind markets to consumers. Because of that, GE…which was previously the industry leader in wind technology…lost ground to Siemens AG….who is now the leader in producing wind turbines.”

Whoa, yourself, HDB.

Eliminating tax credits doesn’t close a single market, and you know it. Does it make it les enticing? Yes. But it closes nothing.

And using a wind turbine company example when discussing closing a market to consumers is like comparing a hammer to a flyswatter. Sure, they can both get the job done, but who’s going to use a wind turbine on their home?

Thomas Heyward Jr

March 8th, 2013
12:46 pm

Republican plebes vote for smaller gov everytime but NEVER get it.
Dems vote for bigger government and ALWAYs get what they want.
I’m having to reconsider which group of sheep are less smarter……………………..lol
But anyhow————-
.
Jacob Hornberger gets it———Libertarians are superior .
.

I think I feel sorrier for conservatives than I do for liberals. That’s because it’s increasingly clear that so many conservatives want so desperately to be like libertarians but they just can’t bring themselves to let go of the statism that grips their hearts and minds. For example, conservatives’ favorite mantra is “free enterprise, private property, and limited government.” Yet, they cannot let go of their undying allegiance to Social Security, Medicare, Medicaid, farm subsidies, FDIC, public housing, corporate bailouts, public schooling, foreign aid to dictators, and virtually every other aspect of the welfare state.

At the same time, even while repeatedly exclaiming against “big government,” another favorite conservative mantra, conservatives cannot bring themselves to let go of their fierce commitment to the vast U.S. military establishment, overseas empire of bases, CIA, foreign interventionism, sanctions, embargoes, torture, assassinations, kidnappings, regime-change operations, the drug war, and the entire Cold War national-security state apparatus that is the very embodiment of “big government.”

In their hearts conservatives know that we libertarians are right in calling for the dismantling and repeal of all these socialist, interventionist, and imperialist programs. Deep down, they know that there is no way to reconcile their favorite mantras with their unwavering commitment to the welfare-warfare state, but they just cannot bring themselves to place their trust in freedom, free markets, and limited government, as we libertarians do.

Finn McCool (the system isn't broken; it's fixed)

March 8th, 2013
12:47 pm

Everyone is against a free market. In free markets it is more difficult to make profits.

A side effect of the bar association is that it limits the quantities of lawyers. The same for the AMA limits the quantities of doctors. Regulations protect consumers while at the same time making it possible for profits to exist. It’s two sides of a coin.

This is what the dean Baker book is all about. No one really wants a “free market”.

JF McNamara

March 8th, 2013
12:49 pm

@Tiberius,

The stock market is an aggregate value of all of the top companies in America. That says a lot about the health of the economy. All of the indexes, including the Wilshire 5,000 are near all time highs.

If he’s against the free market, how can the stock market flourish? If his policies are so bad, shouldn’t the markets be crashing? Shouldn’t unemployment be increasing instead of decreasing?

Finn McCool (the system isn't broken; it's fixed)

March 8th, 2013
12:49 pm

If you are a consumer, you want free markets because what you are buying will be cheaper. If you are an investor in an industry, the last thing you want are free markets in that industry.

If you are both, well, there you are.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:51 pm

“Everyone is against a free market. ”

Speak for yourself, Finn.

Lil' Barry Bailout - OBAMAPHONE!!!

March 8th, 2013
12:53 pm

Tib, you have an issue on the previous thread you need to deal with.

Rafe Hollister

March 8th, 2013
12:53 pm

Bait and switch Obama at his best.

He campaigns:

Against corporate welfare but OK with it, if it is green or helps his campaign contributors.
Against ear marks unless they were already in the spending packages developed under Bush.
Against same sex marriage, but for it now that it is politically correct
Against taking your guns, yet now he is for more gun control
Against secrecy in the Exec branch, but now he is for using secrecy to protect his people
Against unpatriotic and irresponsible spending, but runs up 6T in debt
Against unnecessary wars, but he continued to pursue them both, and continues to engage in one.
Against lobbyist in his WH, yet it is overrun with former lobbyist
Against cutting tax loopholes to raise money, he laughed at Romney’s suggestion, now he campaigns for cutting loopholes.

Just some examples of his bait and switch strategy, of tell them what they want to hear and then do whatever you wanted to do anyway.

HDB

March 8th, 2013
12:54 pm

Tiberius – pulling the tail of the left AND right when needed
March 8th, 2013
12:46 pm

Tibbi, it DID close the market to home consumers….for the ability to apply those tax credits against your personal income taxes would have made the American consumer drive the alternative energy market! Check your personal income taxes and apply the energy credits you’d get off of energy-efficiencies (appliances, insulation, home repairs….)….and note the difference! I wanted toget both solar panels and a wind turbine for my mother’s house back in 1978!! Let me get enough $$$…..I’ll do it NOW…..and let Georgia Power pay ME as an energy source!!

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:54 pm

“The stock market is an aggregate value of all of the top companies in America. That says a lot about the health of the economy.”

No, it says a lot about the PROFITABILITY of the companies, which is why investors invest.

The only way his policies have helped Wall St is to cause companies to save more of their money until times get better. Not necessarily a bad thing, but it has nothing to do with the health of the economy.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:55 pm

“Tib, you have an issue on the previous thread you need to deal with.”

No, I don’t. YOU have an issue with degrading gays, LBB.

Finn McCool (the system isn't broken; it's fixed)

March 8th, 2013
12:56 pm

Do both buyers and sellers benefit when housing prices are high? Buyers would say no.

Do both buyers and sellers benefit in a depressed housing market? Sellers would say no.

JF McNamara

March 8th, 2013
12:56 pm

Tiberius,

I’m not even going to answer that. Anyone who reads that will immediately disregard anything else you write.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:57 pm

HDB, repeating the hyperbole doesn’t make it any less wrong.

No markets were CLOSED (and there was certainly NO market for home-based wind turbines).

They were made less attractive, but NOT CLOSED.

Lil' Barry Bailout - OBAMAPHONE!!!

March 8th, 2013
12:57 pm

GM would have loved to have had a monopoly, sure. Then competitors with superior products wouldn’t have kicked their butts. Consumers would have lost, in the form of higher prices and lower quality.

Cronyism is bad for everyone except the favored company and the politicians whose pockets are being filled.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
12:57 pm

“I’m not even going to answer that. Anyone who reads that will immediately disregard anything else you write.”

JF McNamara-speak for “I got schooled”.

Jefferson

March 8th, 2013
12:58 pm

Reasonable people can come to reasonable conclusions under reasonable conditions, unless you are a republican.

See what I mean.

Lil' Barry Bailout - OBAMAPHONE!!!

March 8th, 2013
12:58 pm

Tib can’t back up his claim, so he doubles down on it.

Now we ALL hate you.

Liar.

jconservative

March 8th, 2013
1:04 pm

“The GOP would do well to spend that time changing its own M.O.”

Not gonna happen.

HDB

March 8th, 2013
1:06 pm

Tiberius – pulling the tail of the left AND right when needed
March 8th, 2013
12:57 pm

“and there was certainly NO market for home-based wind turbines.”

Actually there was, Tibbi, …..but it wasn’t primarily based in the South; home-based wind turbines are primarily found in the Great Plains and the Midwest……..check this out for more: http://www.renewwisconsin.org/wind/Toolbox-Homeowners/Apples%20and%20Oranges.pdf

JF McNamara

March 8th, 2013
1:06 pm

No, Tiberius. I didn’t get schooled. You just wrote something so completely uninformed that I didn’t know how to reply.

You don’t understand how the economy works at all. There is no need to say another word to you. If you are saying that the top 5,000 companies increasing revenues and becoming more efficient to the point they have record profitability doesn’t mean the economy is better, then there’s no help for you.

If you think you won, however, then fine. I’m okay with that.

Aynie Sue

March 8th, 2013
1:08 pm

Right, Kyle! Big Business is forever in holy alliance with government. That’s because Big Business foots the campaign expenses of our politicians. Besides, most Americans think government should be run like a business. Indeed, our government seems to be run like pre-bailout General Motors.

Our economy is able to withstand the high cost of Big Business favors and subsidies because federal deficit spending is injecting sufficient capital to cover 7% of our GDP (10 million of our jobs).

Foolish European governments are trying to reign in their deficits by cutting government spending. Predictably and inexorably, reduced government spending in a sluggish economy produces economic recession and job loss.

Bruno

March 8th, 2013
1:08 pm

Although Obama regularly talks about ending “corporate welfare,” battling the “special interests” and creating a “level playing field,” he has steadfastly supported government favors for the ethanol industry — favors that increase costs for drivers, taxpayers, ranchers and grocery shoppers.

Kyle–For whatever reason, Obama’s supporters fail to notice that most of the “Occupy Wall Street” inequities have gotten worse under Obama’s watch, from corporations sitting on their profits to the huge disparity between executive pay and workers’ pay. But, I guess that as long as he pays enough lip service to “leveling the playing field”, no one will hold him responsible.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
1:10 pm

“You don’t understand how the economy works at all.”

Actually, I do. Far better than you, JF.

What you don’t understand is the stock market and why people invest.

Which is why you got schooled.

“If you are saying that the top 5,000 companies increasing revenues and becoming more efficient to the point they have record profitability doesn’t mean the economy is better, then there’s no help for you.”

Means the companies are in better shape, but not the economy. Come back when our GDP growth is at 6% or more per year, and we’ll talk about the economy being better.

Finn McCool (the system isn't broken; it's fixed)

March 8th, 2013
1:12 pm

The total cost to date of the Iraq war is somewhere in the $2 trillion range

If 41 had only told 43 that he loved him more, we wouldn’t be out $2 trillion.

Tiberius - pulling the tail of the left AND right when needed

March 8th, 2013
1:13 pm

HDB, you’ll never get it. Unless you can sell enough turbines to create multiple wind farms, you won’t make money at it.

And you’re not going to sell enough to homeowners to make up that loss. Even in Wisconsin.

@@

March 8th, 2013
1:14 pm

When someone makes a campaign contribution, it’s followed by the usual “Campaign contributions are not tax deductible.”

Well……?

Obama bundlers closely tied to influence industry

Big pharma? Lawyers representing the financial industry? Real estate tycoons?

schnirt

Finn McCool (the system isn't broken; it's fixed)

March 8th, 2013
1:14 pm

But, I guess that as long as he pays enough lip service to “leveling the playing field”, no one will hold him responsible.

no we hold him responsible. Remember, he got the job as a result of an election. Would we have been in a better situation if we had voted for a guy from Wall street? We thought not. So we voted for the other guy, the lesser evil.

Logical Dude

March 8th, 2013
1:14 pm

Kyle:
Corporate Welfare is alive and well in the United States. Have you described this as a problem before, or are you trying to pull “Liberals should be outraged!!, see! SEE!!” kind of article.

So, really, who can change this?

“The GOP would do well to spend that time changing its own M.O.”

Into what? Can you provide possible solutions to this, or just recognize the continued problems from the last 50 years? (or maybe longer, I ain’t old enough to know)

two riders were approaching

March 8th, 2013
1:15 pm

when the whole Obama phone thing has been debunked about 50 times why does Barry continue to use it? Am I missing something?

Bruno

March 8th, 2013
1:16 pm

Foolish European governments are trying to reign in their deficits by cutting government spending. Predictably and inexorably, reduced government spending in a sluggish economy produces economic recession and job loss.

Will someone please explain to Aynie Sue the difference between the short run and the long run. She obviously doesn’t understand that short-term discomfort is often necessary for long-term health.