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Beau Berger's List: Government Subsidies

    • . In 1948, with postwar pent-up consumer demand exhausted and the economy sinking back into recession, Truman's "cold-war spending" was regarded by the business press as a "magic formula for almost endless good times" (Steel), a way to "maintain a generally upward tone" (Business Week). The Magazine of Wall Street saw military spending as a way to "inject new strength into the entire economy," and a few years later, found it "obvious that foreign economies as well as our own are now mainly dependent on the scope of continued arms spending in this country," referring to the international military Keynesianism that finally succeeded in reconstructing state capitalist industrial societies abroad and laying the basis for the huge expansion of Transnational Corporations (TNCs), at that time mainly U.S.-based.
    • The Pentagon system of course served other purposes. As global enforcer, the U.S. needs intervention forces and an intimidating posture to facilitate their use. But its economic role has always been central, a fact well-known to military planners. Army Plans Chief General James Gavin, in charge of Army R&D under Eisenhower, noted that "What appears to be intense interservice rivalry in most cases...is fundamentally industrial rivalry." It was also recognized from the outset that these goals require "sacrifice and discipline" on the part of the general public (NSC 68). It was therefore necessary, Dean Acheson urged "to bludgeon the mass mind" of Congress and recalcitrant officials with the Communist threat in a manner "clearer than truth," and to "scare hell out of the American people," as Senator Vandenberg interpreted the message. To carry out these tasks has been a prime responsibility of intellectuals throughout these years.
    • These were tolerable in the days of overwhelming U.S. economic dominance, less so as U.S.-based corporations face serious competitors who can design and produce directly for the commercial market, not awaiting possible spin-offs from high tech weapons or space shots. Furthermore, the cutting edge of industrial development is shifting to biology-based technology. That is one reason why the West, with the U.S. in the lead, is insisting that GATT agreements and NAFTA (North American Free Trade Agreement) provide enhanced protection for patents ("intellectual property"), thus locking the Third World into dependency on high-priced products of Western agribusiness, biotechnology, the pharmaceutical industry, and so on. It is important to ensure that TNCs control seeds, plant varieties, drugs, and the means of life generally; by comparison, electronics deals with frills. Public subsidy and state protection for biology-based industries can not easily be hidden behind a Pentagon cover. For such reasons alone, new forms of state intervention are required (see Year 501, South End Press).

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    • he U.S. federal government and two states are supplying Boeing with "lavish" subsidies that will eventually reach US$23.7 billion, the European Union said Thursday, adding that the payments are already providing the American plane manufacturer with a massive advantage over rival Airbus.
    • The 27-nation EU cited tax breaks, development funding and outright grants to Boeing in its first submission to the World Trade Organization of evidence that the United States is providing support for the Chicago-based plane manufacturer in violation of global commerce rules. The bloc also accused the U.S. of providing vast amounts of hidden support to Boeing through military contracts.
    • The bloc says the U.S. federal government's share of the alleged illegal payments to Boeing included US$18.9 billion in research funds through NASA and Department of Defense grants, tax breaks and reimbursement of development costs since 1990.

       

      It also claims the state of Washington will provide $4 billion in tax exemptions and infrastructure projects for the exclusive benefit of Boeing by the year 2024. Kansas, meanwhile, is to provide the company with US$900 million in tax breaks and subsidized bonds, said the EU

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    • n FY2007 and FY2008 combined, Ex-Im issued $15.3 billion in long-term loan guarantees. Of that total, almost $10 billion, or an average of 65 percent, went toward the purchase of commercial aircraft made by the Boeing Company, the world’s largest manufacturer of commercial jetliners and military aircraft combined. 
      • Beau Berger
        Beau Berger on 2011-04-07

        The Cato Institute's paper on "The Corporate Welfare State" points out the the Export-Import Bank is itself a vehicle for crony capitalism, citing the fact that they provide funding to some of the largest Fortune 500 firms, none of which that would have any problem funding their own projects or ascertaining non-government funding.

    • In FY2007, loans for Boeing aircraft accounted for $4.5 billion, or 62 percent, of $7.2 billion in long-term guarantees.  Boeing reports that sales to foreign customers accounted for about 40 percent of the company's revenues in 2008. 
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