The Biggest Crony Capitalist Game in Town
With Republicans publicly feuding with corporations over state election laws, there was some slight hope that the GOP’s pique might take root just long enough to end the decades-long crony capitalist gravy train.
No more taxpayer-subsidized stadiums…no more tax breaks or grants to businesses relocating from one state to another…no more carve-outs for the powerful, the connected, and the well-represented.
It turns out corporations don’t need Republicans to ladle out the subsidies. Democrats are just as eager to do so and on a much bigger scale. As economist Veronique de Rugy writes, President Joe Biden’s infrastructure plan is one, big corporate welfare scheme. For example:
Freight railroads, which will get a share of that $80 billion, are very lucrative, too. As former budget director David Stockman explains in a recent newsletter, freight railroads “have prodigiously reinvested in tracks and rolling stock.” He adds that these companies don’t need help, “especially not Warren Buffett, who owns a big chunk of the Burlington Northern Santa Fe … The latter, in fact, posted $23.5 billion of sales, $5.5 billion of net income and $3.6 billion of CapEx during 2019. And the figures for the other big publicly held railroad companies are similar.”
Bailout Buffett? Sure, why not? There’s also plenty for telecoms, utilities, airlines, and a lot more. But let’s not forget the proposed boost to labor unions:
One example is a $400 billion handout to expand access to long-term, home- and community-based care services under Medicaid and extend its Money Follows the Person program. While this has nothing to do with infrastructure, The Wall Street Journal explains how it has everything to do with bolstering unions, writing that Biden’s proposal highlights that “his home-care plan would ‘create good middle-class jobs with a free and fair choice to join a union … and the ability to collectively bargain.’ This is where the SEIU comes in.” The Service Employees International Union, they write, “has been able to exploit Medicaid home-care programs to expand its membership with help from state Democratic lawmakers.”
And all of this is just in the proposed legislation. The final product, and final dollar amounts, will change substantially as the feeding frenzy (and congressional earmarks) gets underway.