Archive for the ‘Crony Capitalism’ Category

The Kronies are here to protect a huge corporate welfare program

June 17, 2014 1 comment

Yesterday the first episode of “The Kronies” was released. The Kronies is new short cartoon series that somewhat parodies old Saturday morning cartoons (do they exist anymore?) Back in January the project was launched with a website and some introductory videos for the cast (shown below). I’ve been meaning to do a post about the pending reauthorization of the Export-Import bank, but thanks this great webisode of The Kronies I can put that off for a little while.

Here is the episode in question. It is only one and a half minutes long.

The Harry Reid line was classic! I also love the fact that The Kronies videos take on both sides of Crony Capitalism: the politicians and the big corporations.

When it looks like a vote is pending on this issue I will likely do an actual post showing why it is time for the Export-Import bank to go away. But sadly there is likely to be little true resistance to renewing this corporate welfare institution… It is also worth noting that signing the bill renewing the bank two years ago is one of the many campaign promises Obama has broken over the years.

For anyone interested here are the introductory videos of the The Kronies released earlier this year:

Kronies TV Commercial: Get the Kronies Action Figures!

Meet Bankor the Profit!

Meet Kaptain Korn!

Meet Big-G!

Meet Parts & Labor!

Meet Ariel Stryker!

It is time to get serious about reducing corporate welfare, including farm subsidies

November 25, 2013 6 comments

Over at there is a good post reminding us that more money goes to corporate welfare than social welfare programs.  How much more goes to corporate welfare than social welfare? points to a report at for the answer:

About $59 billion is spent on traditional social welfare programs. $92 billion is spent on corporate subsidies. So, the government spent 50% more on corporate welfare than it did on food stamps and housing assistance in 2006.

I’m no fan of any government welfare programs, whether they be corporate or social. I do however think it makes many fiscal conservatives look hypocritical when they attack social welfare programs and ignore the billions of dollars used in wealth-redistribution done for special interest groups in rich industries.

The energy industry (oil, coal, wind, solar, etc..) is often a target for those of us opposed to corporate welfare. And right fully so, they account for a large portion of corporate welfare. Yet that industry is not the biggest corporate welfare recipient. It is actually the agricultural industry. This from the ThinkByNumbers report:

However, the largest fraction of corporate welfare spending, about 40%, went through the Department of Agriculture, most of it in the form of farm subsidies. (Edwards, Corporate Welfare, 2003) Well, that sounds OK. Someone’s got to help struggling family farms stay afloat, right? But in reality, farm subsidies actually tilt the cotton field in favor of the largest industrial farming operations. When it comes to deciding how to dole out the money, the agricultural subsidy system utilizes a process that is essentially the opposite of that used in the social welfare system’s welfare system. In the corporate welfare system, the more money and assets you have, the more government assistance you get. Conversely, social welfare programs are set up so that the more money and assets you have, the less government assistance you get. The result is that the absolute largest 7% of corporate farming operations receive 45% of all subsidies. (Edwards, Downsizing the Federal Government, 2004) So instead of protecting family farms, these subsidies actually enhance the ability of large industrial operations to shut them out of the market.

As the Farm Bill takes center stage again it is time to look at truly getting rid of corporate welfare subsidies for the agricultural industry. Now I don’t think it would be a good idea to cut the subsidies cold turkey. The unintended consequences of that would cause undue short-term hardship on the economy. As a nation we are already experience enough government-produced hardship upon the economy. Instead we need to get back to a five-year plan that will remove farm subsidies. Doing so would allow the agricultural industry to plan accordingly. It would also remove the largest corporate wealth-redistribution scheme and allow food prices to closer reflect free-market prices.

Personally I don’t believe the current majority of DC politicians will be willing to take on the lobbying power of the agricultural industry. But if the fiscal conservatives in DC want to be taken seriously they have to look at all forms of welfare. Supporting corporate welfare over social welfare is not just hypocritical, it makes them appear to be ‘bought and paid for’ by special interest groups.

Will defense spending ever be fixed in DC

November 18, 2013 2 comments

tanque_xilographic_styleDefense spending is always a hot topic in DC. From my point of view there are two different political approaches to the political side of defense spending in DC:

  • There are those that want to increase defense spending.
  • There are those that pretend they want to decrease defense spending.

Very few politicians in DC actually want to reduce defense spending. True reductions in defense spending would mean going against special interest groups that support DC politicians.

As some one who believes in a good defense capability I don’t want our military reduced to a point where it is unable to defend our country. At the same time I believe our military should be efficient in both capabilities and cost. Just last week I listened to top military officials tell Congress there is nothing left to cut without reducing capabilities of our military. Should we believe that? Or were these top military officials telling Congress what they wanted to hear so politicians could keep the status quo for defense spending. Or are these top defense officials saying they cannot make cuts simply because they don’t know where the money is going?

Often when having this debate I will mention military projects that Congress forces upon the Pentagon in order to please special interests. Some examples include

Items like these are “low-hanging fruit” for budget cuts. These cuts could be made immediately without undermining our defense capabilities. When researching defense cuts it is hard to find areas beyond this low-hanging fruit to highlight. An investigation being done by Reuters could explain why:

In its investigation, Reuters has found that the Pentagon is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; thus it continues to spend money on new supplies it doesn’t need and on storing others long out of date. It has amassed a backlog of more than half a trillion dollars in unaudited contracts with outside vendors; how much of that money paid for actual goods and services delivered isn’t known. And it repeatedly falls prey to fraud and theft that can go undiscovered for years, often eventually detected by external law enforcement agencies.

The consequences aren’t only financial; bad bookkeeping can affect the nation’s defense. In one example of many, the Army lost track of $5.8 billion of supplies between 2003 and 2011 as it shuffled equipment between reserve and regular units. Affected units “may experience equipment shortages that could hinder their ability to train soldiers and respond to emergencies,” the Pentagon inspector general said in a September 2012 report.

Because of its persistent inability to tally its accounts, the Pentagon is the only federal agency that has not complied with a law that requires annual audits of all government departments. That means that the $8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996, the first year it was supposed to be audited, has never been accounted for. That sum exceeds the value of China’s economic output last year.

It is kind of hard to determine where to make cuts when there is no good data to work from. It is believable that top defense officials cannot make more cuts simply because they don’t know where the money is going. Perhaps now is the time to look at prioritizing its ‘accounting readiness’. The Pentagon should make it a top priority to update and streamline accounting policies and technology used by the military. Then perhaps we could get real data to find out where defense cuts can be made. Better yet streamlining the defense accounting may actually save millions (or billions) of dollars that are currently being misappropriated or otherwise ‘lost’.

Now the bigger question is if the military-industrial complex would allow such a move to happen? Can we trust DC politicians to reduce spending on defense, even if that would make for a more efficient military? Personally I don’t believe the military-industrial complex and the DC politicians enabling the current defense spending system will allow that to happen.

Will Governor Daugaard mention the beef plant corporate welfare when Aberdeen is ‘Capital for a Day’?

August 8, 2013 1 comment
Angus Cow, Curious by Kim Newberg

Angus Cow, Curious by Kim Newberg

Next week it is Aberdeen’s turn to be “Capital for a Day”. Here is a portion of the news release posted on the South Dakota website:

Activities for the day include a main street walk, tours around town, meetings and a fair walk. Citizens are encouraged to attend the community roundtable meeting to discuss workforce, recruitment and training. This will be held at the Brown County Fairgrounds Clubhouse from 1 – 2 p.m. CDT.

The day concludes with a fair walk at 2:00 p.m., where constituents can talk with Gov. Dennis Daugaard.

The beef plant laying off its workforce last month is a large and recent enough issue to bring up at this community roundtable. As the release says this community roundtable will be used to “discuss workforce, recruitment and training”. This may be a good chance for Aberdeen as a community to bring forth answers (although if I goes like most townhall meetings I’ve been to it won’t really accomplish anything).

But after the townhall meeting Governor Daugaard will be going for a walk and talking with constituents. This would be the perfect time to find out if the Governor understands the dangers of large operations such as the beef plant being completely supported by taxpayer and greencard dollars.

However, I do not expect that to happen. As a true backer of corporate welfare I expect Governor Daugaard will find non-government issues to blame the failed beef plant on. He will also fail to share the blame with bad business decisions made at the plant (why make good business decisions when its the taxpayer dollars your playing with). Instead I expect the Governor to channel the favored progressive economist Paul Krugman. A couple of weeks ago Krugman had this to say about Detroit:

…for the most part the city was just an innocent victim of market forces.

I am betting if Daugaard will answer questions about the beef plant failing (after being built and supported with corporate welfare) the answer will involved the “free market” and make it sound as if nobody could have foreseen this tragedy. Sadly that may sound like the “truth” to someone who loves to use taxpayer dollars for subsidizing favored special interests. However, those of us that care about fiscal responsibility can see this situation, just as with Detroit, has nothing to do with “market forces”. In this case an inept management team being supported by government bureaucrats (backed by elected officials coming with gifts of taxpayer dollars) were the only real “forces” that are to blame..

If Daugaard does not start to become the conservative Republican he pretends to be (although honestly he doesn’t try too hard) maybe it is further proof South Dakota needs a libertarian Governor. I could be wrong. He might have good answers. But I think it more likely he will find ways to avoid touching any real corporate welfare topics. Maybe I’ll have to leave my fair booth for a while next Friday afternoon.

PS. He could try blame this on Rounds because that is who was governor when this beef plant fiasco started. But that doesn’t excuse Daugaard’s continued support of Rounds actions at the beef plant. It is also unlikely he will attack Rounds going into the election season.

The State of South Dakota must help correct the situation it created at Northern Beef Packers

July 27, 2013 Comments off
Angus Cow, Curious by Kim Newberg

Angus Cow, Curious by Kim Newberg

That might sound like a funny headline from a libertarian blogger. But yes, I think we have a case where the government must step in to help. For anyone that missed the news the Northern Beef Packers in Aberdeen laid off 260 workers on Wednesday. This was after missing payroll the Friday before. At that time I made the case that government-created situations such as this mean we need a more libertarian governor. Now I am going to make the case that the State should assist these 260 workers.

The Northern Beef Packers (NBP) plant was created in part through the EB-5 program; which allows green cards for “jobs created”. Former Governor Rounds proudly intervened in the market to create the current NBP situation.  Add to this the plethora of taxpayer dollars used (either directly or indirectly through tax breaks) and the NBP plant is a text-book case of cronyism and corporate welfare at its worst. The cronyism that was started by Governor Rounds, and currently being continued by Governor Daugaard, in Aberdeen shows the true victims of government intervention into the market: the average working American citizen.

Now that 260 workers have been laid off it is time for the State to at least put a band-aid on the situation it created. The hard-working people who worked at NBP are understandably angry and seeking answers. In a dirty trick move NBP filed for Chapter 11 Bankruptcy before the South Dakota Labor Department could ensure the workers got their three weeks of pay that was never received. There is no excuse for NBP to behave in such a way; especially since most of their operations have been taxpayer-funded! The workers at Northern Beef Plant are not simply numbers for politicians to play with so they can sell green cards. These workers are hard-working people who expect honest pay for honest work. When cronyism enters the picture all honesty between the company and its employees are false.

That is why at this time I believe it is best for the State to provide emergency support for these families. This would not be a case of welfare or government intervention, it is a case of the State stepping in to help band-aid a situation it created. Apparently the State of South Dakota has a surplus of $24.2 million when the fiscal year ended last month. Part of that money could be used as short-term relief for these families until NBP is forced to pay its workers. If that means creating a special session of the legislature I would say that is OK. Right now what is important is to help these families, and determine later how to prevent such situation in the future.

On that note I would like to give a hat-tip to many Aberdeen residents that have been helping these displaced workers. Although I have been traveling the last few days, I have kept in touch with people back in Aberdeen. I have heard of church groups and non-profit organizations stepping up to assist the affected families. That is great to hear. I would urge anyone in the Aberdeen area reach out to their local charitable organizations to see if there is a way they can help. No matter how anyone feels about the political side of this story the human side of this story is still the most important aspect.

As I close this post I would like to urge Governor Daugaard and our State Legislators to see if there is a way they can help these hard-working South Dakota residents. This is not a case of welfare. Rather it is a case where the State should step in to assist people getting their lives back after being the victim of taxpayer sponsored cronyism.

R.I.P. Keynesian Economics. Now can we get back to real economic progress?

May 28, 2013 1 comment

1343667790Over at the Independent Institute there is a good article from Burt Abrams providing one more rather large piece of evidence that Keynesian Economics simply doesn’t work. Mr. Abrams looks at how the $787 billion stimulus passed in the 2009 American Recovery and Reinvestment Act (ARRA) simply did nothing to improve the economy. US citizens should be downright livid about the gambled loss of three-quarters of a trillion taxpayer dollars.

But, instead of getting made I will instead re-post the obituary nicely written by Mr. Abrams. Here is the obituary in its entirety:

Obituary: Keynesian Economics, R.I.P.

Keynesian Economics, aged 77, died peacefully today after a prolonged illness and complications associated with the Great Recession. Born in the 1930′s of British parentage, it rose to preeminence as the dominant macroeconomic theory. It is survived by well-intentioned, but misguided, older economists and politicians who have difficulty facing statistical evidence and commonsense. It leaves a legacy of massive public indebtedness, unsustainable entitlement programs, and slowly growing and sometimes bankrupt economies.

In the 1960′s, its short-run orientation was embraced warmly by U.S. politicians of all persuasions. Its disregard for anything other than the short run was succinctly summed up by its motto, “In the long run, we’re all dead.” In it last years, it provided the justification for the American Recovery and Reinvestment Act of 2009 that undertook bizarre public policies that failed basic benefit-cost assessments: “Cash for Clunkers” that destroyed perfectly usable automobiles, construction of airports in the middle of nowhere (but close to congressmen’s home towns), installation of high-speed rail systems that traversed sparsely settled parts of the country, often without passengers, 5 mph faster than the trains they replaced, and subsidies to wasteful companies that eventually went bankrupt. The Act did not return the economy to full employment as promised but did boost the country’s national debt and helped to lower its credit rating.

Keynesian deficit stimulus spending made the United States, once the greatest and wealthiest country in the world, dependent on foreign lenders. The taxes needed to fund its bloated government spending and service its national debt discouraged the private sector and crowded-out private entrepreneurship. Its national debt will burden future generations and slow economic growth for years to come.

After 77 years, the long run had arrived for Keynesian Economics. Internment is in Potter’s Field.

Watch out liberty movement. Progressivism 2.0 is here, rebranded as No Labels

May 20, 2013 3 comments

Label_001No Labels has been around for a couple of years now. Like many in the liberty movement I’ve basically ignored them. Reason and others have covered them, but I never really paid attention. What did I care about a “bi-partisan” movement. I should have been paying more attention. I’m watching CSPAN as Reps from the House speak out about No Labels and how great it is. As I watch them I am getting their message loud and clear: “we are coming together in a non-partisan manner to rebuild this country in our progressive image”.

To see if this impression was correct I did some research on the No Labels website. Here is a very relevant excerpt from the “Who We Are” section:

No Labels promotes its politics of problem solving in three ways: by organizing citizens across America, providing a space for legislators who want to solve problems to convene and by pushing for common-sense reforms to make our government work.

You will notice that the author of this document emphasized three phrases within the paragraph. Let’s look at these three statements, in reverse order.

pushing for common-sense reforms

This is the main phrase to be afraid of. It is phrases like this that have driven the progressive movement for over a century. Make no mistake about this phrase: reform means social engineering. The purpose of the progressive movement has been to engineer society in their Utopian image without regard to constitutional restrictions, state rights, or individual rights. As I continue to watch Representatives on CSPAN talk about No Labels there is an obvious progressive nature present.

providing a space for legislators who want to solve problems

Hmm, providing a space for legislatures to solve problems. This sounds very familiar. Oh, I know: it’s another group like ALEC, NCSL, or CSG (I’ve previously blogged my opposition of taxpayer dollars to these groups before). No Labels is going to become another place politicians can get pre-made bills to pass in order advance the progressive No Labels movement. It is ironic. At the very same time progressives are attacking ALEC they are putting forth a new group that will do many of the same things of their most hated organization.

organizing citizens across America

This section makes sense for any political organization: they will want to educate voters about their cause. While it makes sense, I believe the liberty movement must watch out! This No Labels group calls itself “non-partisan”. Many believe non-partisan is the same as “without an agenda”. It is quite clear No Labels has an agenda. They will be “educating” voters about their agenda as if it is “the truth”. This is no different from how many political movements act. However it is being done in a dis-honest way: the No Labels movement makes itself appear to be non-political in nature. Hopefully people will see through their deceit.

As time goes on independent thinkers and liberty-minded individuals must keep an eye on this group calling themselves “No Labels”. For those of that can see the damage progressiveness has already done to constitutional, state, and individual rights this does not bode well. But I still have faith real common sense will win over the deceitful “common-sense” proposed by No Labels.

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