Subsidies Galore: Corporate Welfare For Politically-Connected Businesses Is Bipartisan

Guess what? Both Republicans and Democrats love crony capitalism. This is one of the reasons citizens should always fear “bipartisanship.” Better for us generally if the folks in Washington are at each other’s throats.

(From Investors Business Daily)

Business plays a vital role in a free market. In real capitalism there are no guaranteed profits. But corporate welfare eliminates this handicap for the well-connected.

Business subsidies that allow politicians to channel economic resources toward their preferred ends distort investment and trade. Moreover, turning government into an engine of illicit profit encourages what economists call rent-seeking. Well-organized special interests usually triumph over the broader public and national interest…

…For instance, the Export-Import Bank is known as Boeing’s Bank. It provides cheap credit for foreign buyers of American products. Which, ironically, gives foreign firms an advantage over U.S. producers who must pay full fare. Ex-Im’s biggest beneficiary in recent years has been China, especially its state-owned firms.

The Overseas Private Investment Corporation underwrites U.S. investment in potentially unstable nations. If the project pays off, investors win. If not, the rest of us lose. Why should the public guarantee investor profits?

At the other end of the commercial spectrum is the Small Business Administration. Smaller firms are a vital part of the American economy but they are not an underserved market. There is no dearth of, say, liquor stores. SBA is a response to a political opportunity, not an economic need.

Sending your money to pet programs and contributors is a big part of the political game. GOP and Dem. They want your money almost even more than your vote. (Even if you vote them out they can always become lobbyists. Usually for better pay.)