Have a listen here.
Myron Ebell, Director of CEI’s Center for Energy and Environment, takes a look at the brewing Solyndra scandal. Solyndra is a company that makes solar panels and recently declared bankruptcy. In 2009, the federal government gave Solyndra a $535 million loan even though its own analysts predicted the company would go bankrupt in 2011. The company’s cozy relationship with political figures, including a major political donor with an investment stake, make the loan — and its low interest rate — look rather suspicious.
Posted in CEI Podcast, Spending, Stimulus, The New Religion
Tagged crony capitalism, green jobs, Myron Ebell, rent seeking, solar panels, solyndra, stimulus scandal, subsidies
Politico headline from today: “Qualcomm exec calls for small-business research funding.”
Alternative headline: “Businessman asks government to give money to businesses.”
Government should not give money to private businesses, period. Businesses should compete in the marketplace, not Washington. There is a lot of money to be made by selling people things they want. Companies that do a good job of that deserve every cent they earn.
Subsidies are not earned. Nor are they given to companies make things people want. Companies already doing that don’t need handouts. In short, corporate welfare is allocated by politics instead of economics.
What Mr. Jacobs is asking for would be a boon for lobbyists and politically favored businesses. But it would be a drag on everyone else. And not only because they would be paying for the handouts. Lost innovations are part of the price. The money spent on corporate welfare is money not spent on more worthy projects.
See also Wayne Crews and I on corporate welfare in the new edition of CEI’s Agenda for Congress.
Posted in Economics, Public Choice, Spending
Tagged cei agenda for congress, corporate welfare, dueling headlines, headlines, irwin mark jacobs, politico, qualcomm, Ryan Young, subsidies, wayne crews
Joe Biden believes that government played a large role in the success of railroads in the 19th century. In this video, Don Boudreaux points out that that isn’t actually true. There were four transcontinental railroads. Three of them received subsidies. The fourth was the Great Northern Railway, founded by Canadian immigrant James J. Hill. He alone rejected any special government favors.
All three subsidized railroads went into receivership. Hill’s Great Northern Railway remained solvent, and is still in business today as the BNSF Railroad.
Posted in Economics, The Market Process
Tagged bnsf railroad, Don Boudreaux, government meddling, great northern railway, james j. hill, joe biden, joe biden gaffe, private enterprise, railroads, subsidies
More than 60 different agencies publish more than 3,500 new regulations every year. There are more than 1,000 federal subsidy programs covering everything from mohair to ethanol. When the government involves itself in that many different projects, some of them are bound to contradict each other.
For example, the federal government spends more than $1 billion per year on anti-obesity programs. But the federal government also spent more than $12 million to help Domino’s Pizza tout its new recipe with 40 percent more cheese; this is roughly the opposite of an anti-obesity program.
Dairy Management, the USDA-funded program that gives taxpayers’ dollars to Domino’s, Pizza Hut, and other private firms, is designed to help dairy farmers. By encouraging restaurants to use more cheese in their recipes, the USDA is achieving its goal of giving dairy farmers more business. But it also undermines the competing federal goal of reducing obesity.
Government has a long history of undermining its own goals. One of the more famous examples involves paying farmers to destroy their crops in an effort to raise food prices during the Great Depression. When (frequently unemployed) non-farmers complained about having to pay more for food during those hard times, the federal government then took actions to lower food prices – while keeping in place the policies that raised them in the first place.
The spirit of consistent inconsistency goes beyond the government’s spending habits. Vice President Biden will have a meeting today in the White House about government transparency. It will be closed to the public.
This letter of mine ran in today’s New York Times in response to Paul Krugman’s July 4 column.
To the Editor:
Paul Krugman is at a loss to explain why some people oppose extending unemployment benefits. One reason people hold such an opinion is that when government subsidizes something, there tends to be more of it.
The more government subsidizes unemployment, the more people will indulge in it for longer periods of time.
Washington, July 6, 2010
The writer is a journalism fellow at the Competitive Enterprise Institute.
Posted in Correspondence, Economics, Price and Wage Controls, Publications, Spending
Tagged new york times, ny times, paul krugman, subsidies, unemployment, unemployment benefits, unintended consequences