Crony Capitalism And Its Variety Of Flavors
I can’t help but think that Romney’s newly invigorated crony-capital (e.g., Solyndra) schtick is very much a double-edged sword for him. I mean, isn’t he the candidate who, notwithstanding his claimed concern about the federal deficit, refuses to support the proposed elimination of the federal government’s subsidies to the oil and gas industry, and who (as per a speech he gave last winter in, I think, Utah) wants the federal government to sell most of the national forest and park land to the logging industry because, well, the public doesn’t need those forests and parks?
Or am I mistaken in thinking that the Koch brothers have vast oil, gas and logging interests—and that the brothers contribute heavily to Romney, his super PACs and other Republican fundraising groups?
Or that Romney’s proposal to tie the level of his proposed increases in Defense spending to the level of annual GDP output, rather than, y’know, this country’s national defense needs—might have something to do with crony capitalism?
Not even to mention a stunningly perverse pinstriped-patronage version of Keynsian economics. Okay, I’ll mention it:
Romney’s plan calls for linking the Pentagon’s base budget to Gross Domestic Product, and allowing the military to spend at least $4 dollars out of every $100 the American economy produces.”
— Defense spending to spike $2.1 trillion under Romney, CNN Money, May 10, 2012.)
Been wondering when this interesting little policy proposal, and its obvious purpose, would start to get some national media attention. There’s no time like the present. Not that our blog is a national media outlet. But we can pretend.
I have said it before, but after you have more houses by multiples of everyone else with bedrooms and bathrooms in numbers that far outsize the family, along with boats and planes and trains and opportunities to travel anywhere and everywhere when ever and your income is ever increasing…maybe it is time to spend the extra money on something else? Do we really need a bigger house with more toilets?
That of the top 19 military spending nations 17 are considered allies and the other 2 are trading partners one so much so that they buy our debt in big numbers for safe keeping, maybe we really don’t need to indulge our paranoia in a means that permenately stakes the level of paranoia?
Cutting our military/security by 1/2 adn actually relying on our allies as being an allie would suggest we could we would still be at a combined $1 trillion in military spending against the 2 supposed adversaries.
I really think the issue of this proposal of Romney’s is separate from the issue of what the Defense Department budget should be as a matter of national security needs—because the proposal itself, weirdly, untethers the amount from national security needs and instead tethers it to the growth of the economy.
Of course, Keynesian economics means that the level of government spending should be inverse to, rather than parallel to, the health of the economy, if the purpose of the expenditure is to aid the economy. This proposal, by contrast, is openly geared toward increasing the amount paid to military contractors when the economy is already doing well. It’s truly, baldly a proposal for huge crony-capitalist payoffs.
Can you describe in greater detail the subsidies you’d like to see eliminated? According to the link above, well over 1/2 the “subsidies” don’t seem like they’re specific to oil & gas companies. AFAIK, LIFO accounting is commonly used across multiple industries. And according to the footnote in the chart, “This number represents the full elimination of Last In, First Out Accounting for all industries.” meaning the authors are ascribing all LIFO “subsidies” to the Oil & Gas Industry. The second subsidy, “Domestic Manufacturing Tax Deduction for Oil & Gas Companies” seems like something, once excluding “for Oil & Gas Companies” that has broad bipartisan support. The fourth subsidy, “percentage depletion allowance” is also an accounting/timing “subsidy”. Both (1) and (3) represent timing differences that once adjusted for would basically have no ongoing impact to revenues.
The linked NYT article doesn’t add anything to this discussion. It just refers to the broad vague “oil & gas subsidies”. Which specific subsidies for oil & gas companies would you like to see eliminated? For example, Obama has supported tax incentives to bring jobs back to the U.S. from overseas – do you want oil & gas companies exempt from these incentives?
My point was to the fact that the conservative mind has been pushing for a 4% of GDP as the norm for military/security spending for a very long time. They did not like the “peace dividend”.
That this has been their push for ages means they don’t care about need analysis beyond that they believe the need equates to the GDP. This is tantamount to saying: I have ever greater income each year therefore I have a need for an ever larger house.
Of course if this is their case that the more GDP rises the more “need” for security then they should also acknowledge who is benefitting from the increased security as it relates to the rising GDP and make them pay for it.