Koch: It's Only Crony Capitalism When I Don't Benefit

The right-wing press is chock-a-block with articles decrying the Obama administration’s romance with industrial policy. So reflexive is this ideology that some of them are even written by major beneficiaries of industrial policy, whose sense of entitlement must be so ingrained that they fail to notice this anomaly.

Exhibit A appeared in Monday’s Wall Street Journal op-ed page, in which Charles Koch of Koch Brothers fame took out after crony capitalism and industrial policy.

“We are on dangerous terrain when government picks winners and losers in the economy by subsidizing favored products and industries,” Koch wrote. He further complained that government is currently “subsidizing and mandating politically favored products in the energy sector,” singling out “solar, wind and biofuels” for examples of sectors currently being helped out.

But not a word about oil and gas can be found in Koch’s litany of complaints. Could this be because Koch Industries, of which Koch is chairman and CEO, was originally and is still primarily an oil-refining and pipeline company, though it has also diversified into such fields as paper, asphalt, chemicals, cattle ranches, commodity trading, and buying elections? A study by the Environmental Law Institute has tallied the amount of U.S. subsidies to the fossil fuel industry between 2002 and 2008 at roughly $72 billion. Earlier this year, President Obama called for ending the subsidies to oil companies, but a bill by Senator Robert Menendez (D-N.J.) to do just that failed to muster the 60 votes required to surmount the cloture barrier this summer (it got 51 votes). Though Koch Industries spent more than $50 million on its lobbying efforts in Washington from 2006 and 2011, according to the Center for Responsive Politics, there’ s been no report of it lobbying for Menendez’s bill to end the government’s subsidy to the oil industry.

Koch’s hypocrisy isn’t his alone. It epitomizes the double standard of right-wing opponents of industrial policy who neglect to note all the industrial policies that benefit either their own industries (if they’re oil men, bankers, military contractors, and so on) or the industries that write them checks (if they’re politicians who are funded by oil men, bankers, military contractors, and so on). The oil depletion allowance is industrial policy, lowering the tax bills of such behemoths as Exxon-Mobil at a time when public needs and the deficit are soaring. The exclusion of derivatives from regulation, which banks insisted on over the cautionary objections of Clinton administration Commodities Futures Trading Commission chief Brooksley Born, was industrial policy, benefiting the banks while imperiling, and eventually bringing down, the entire economy. Congressional appropriations for military hardware that the Pentagon neither wants nor needs is industrial policy. The fact that 27 nations have treaties with the U.S. that enable their residents to avoid any U.S. taxation of their casino winnings is industrial policy that brings in millions, if not billions, in high-roller business to such GOP mega-donors as Sheldon Adelson and Steve Wynn. You get the picture.  

 Yet Koch, Adelson, Wynn and Wall Street are providing unprecedented levels of funding to the cause of removing Obama and his dangerous ideas about industrial policy.  
 
Like I said, Chutzpah Prize for the Week, and it’s only Monday.

Comments

OIl depletion losses are a standard part of any company's drilling expenses. Many of these companies are relatively small. Without being able to deduct their business expenses they woudl be broke.

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