Covid-19 Corporate Welfare

corporate-welfareI find myself agreeing with much in the Guardian’s article “Airlines and oil giants are on the brink. No government should offer them a lifeline“, but for completely different reasons from its author.

Do Not Resuscitate. This tag should be attached to the oil, airline and car industries. Governments should provide financial support to company workers while refashioning the economy to provide new jobs in different sectors. They should prop up only those sectors that will help secure the survival of humanity and the rest of the living world.

The idea that “governments” have any idea of how to optimize the economy makes me laugh. That said, I agree the government shouldn’t prop up industries that are non-essential. This will, however, hurt a lot of people and lead to chaos in the economy.

They should either buy up the dirty industries and turn them towards clean technologies, or do what they often call for but never really want: let the market decide. In other words, allow these companies to fail.

“Governments” can’t find their asses with both hands, far less turn industries toward anything, but I agree that they should let the market decide. The idea that oil, airline, or auto industries will simply fail is laughable, but individual companies may fold up and consolidate in the near term. Again, this will hurt a lot of people.

This is our second great chance to do things differently. It could be our last. The first, in 2008, was spectacularly squandered. Vast amounts of public money were spent reassembling the filthy old economy, while ensuring that wealth remained in the hands of the rich. Today, many governments appear determined to repeat that catastrophic mistake.

I agree that selling our children’s futures to bail out the banks with the lame excuse that they were “too big to fail” was a very bad thing. We already see the US doing the same this time around. Crony capitalism is the opposite of a true free market.

The “free market” has always been a product of government policy.

Bullshit. Government policy can help to protect it, but the free market is simply a manifestation of the instinct to preserve one’s genetic line.

If antitrust laws are weak, a few behemoths survive while everyone else goes down.

It is natural (due to our herd mentality) for any industry that is not commoditized to be dominated by one big player–what Geoffrey Moore calls a ‘gorilla’ in his excellent book “Inside the Tornado“. For example, Microsoft came to dominate operating systems and desktop applications, even though there were solid competitors like Apple. Weak antitrust laws had little to do with this, though Microsoft did engage in some shady business practices.

If dirty industries are tightly regulated, clean ones flourish.

This is only true if the clean ones can deliver what is needed more effectively. For example, prohibition attempted to prevent the sale of alcohol in the US. This led to the rise of the mafia who were able to take the market from the “dirty” capitalists who had previously run it.

If not, the corner-cutters win.

Cost cutters always win. The government has taxed the hell out of gasoline for ages. People still use gasoline powered cars because even though the government has massively inflated the price of gas, there is no better alternative yet.

But the dependency of enterprises on public policy has seldom been greater in capitalist nations than it is today. Many major industries are now entirely beholden to the state for their survival.

I agree. We should end corporate welfare.

Governments have the oil industry over a barrel – hundreds of millions of unsaleable barrels, to be more precise – just as they had the banks over a barrel in 2008. Then, they failed to use their power to eradicate the sector’s socially destructive practices and rebuild it around human needs. They are making the same mistake today.

It’s not a mistake. Governments are owned by the oil industry, the banks, and other large donors. Even if they weren’t, I doubt they would be able to rebuild anything. Venezuela’s communist government has eradicated its oil industry, and has only succeeded into sinking the county into poverty.

The Bank of England has decided to buy debt from oil companies such as BP, Shell and Total. The government has given easyJet a £600m loan even though, just a few weeks ago, the company frittered away £171m in dividends: profit is privatised, risk is socialised. In the US, the first bailout includes $25bn (£20.1bn) for airlines. Overall, the bailout involves sucking as much oil as possible into strategic petroleum reserves and sweeping away pollution laws, while freezing out renewable energy. Several European countries are seeking to rescue their airlines and car manufacturers.

Storing oil makes sense. Removing useless regulation makes sense. Corporate welfare does not.

Don’t believe them when they tell you they do this on our behalf.

I don’t. That’s why I’m a libertarian.

recent survey by Ipsos of 14 countries suggests that, on average, 65% of people want climate change to be prioritised in the economic recovery.

The two are unrelated. At least 65% of the people are morons.

Everywhere, electorates must struggle to persuade governments to act in the interests of the people, rather than the corporations and billionaires who fund and lobby them. The perennial democratic challenge is to break the bonds between politicians and the economic sectors they should be regulating, or, in this case, closing down.

You will never do this as long as you support the establishment.

Even when legislators seek to represent these concerns, their efforts are often feeble and naive.

Exactly.

The recent letter to the government from a cross-party group of MPs calling for airlines to receive a bailout only if they “do more to tackle the climate crisis” could have been written in 1990. Air travel is inherently polluting. There are no realistic measures that could, even in the medium term, make a significant difference.

Instead of bailing out the airlines, why not invest in rapid transit to cut vehicle emissions?

We now know that the carbon offsetting schemes the MPs call for is useless.

Yep, we do.

Every economic sector needs to maximise cuts in greenhouse gases, so shifting the responsibility from one sector to another solves nothing. The only meaningful reform is fewer flights. Anything that impedes the contraction of the aviation industry impedes the reduction of its impacts.

No “sector” is responsible for cutting greenhouse gases. If you want people to fly less, you need to give them an alternative. What are you proposing? Teleconferencing and telecommuting have certainly been given a huge boost by the corona virus. Maybe, now that laggards have seen that teleconferencing can work, there will be less air travel.

The current crisis gives us a glimpse of how much we need to do to pull out of our disastrous trajectory. Despite the vast changes we have made in our lives, global carbon dioxide emissions are likely to reduce by only about 5.5% this year. A UN report shows that to stand a reasonable chance of avoiding 1.5C or more of global heating, we need to cut emissions by 7.6% per year for the next decade. In other words, the lockdown exposes the limits of individual action. Travelling less helps, but not enough.

If we need to hold global warming to 1.5C, we are in trouble. Fortunately, we don’t, although there will be consequences for not doing so.

To make the necessary cuts we need structural change. This means an entirely new industrial policy, created and guided by government.

Government isn’t competent to do this. If you want people to change their behavior, you need to give them an alternative.

Governments like the UK’s should drop their road-building plans.

This guarantees they won’t get reelected, so they’re highly unlikely to do it.

Instead of expanding airports, they should publish plans for reducing landing slots.

Cities rely on availability of air travel to attract businesses. Businesses pay taxes. If cities restrict air travel, businesses will move elsewhere, and they will lose revenue. Are they going to be willing to do this?

They should commit to an explicit policy of leaving fossil fuels in the ground.

And what alternative will they have? Electric vehicles aren’t ready for prime time. They are still too expensive, and there isn’t enough charging infrastructure for them to replace gas powered automobiles. How about, instead of hurting people by forcing them to pay for new, expensive vehicles (whose manufacture produces large carbon emissions), public funds are used to build public transit?

During the pandemic, many of us have begun to discover how much of our travel is unnecessary. Governments can build on this to create plans for reducing the need to move, while investing in walking, cycling and – when physical distancing is less necessary – public transport. This means wider pavements, better cycle lanes, buses run for service not profit.

I largely agree.

They should invest heavily in green energy, and even more heavily in reducing energy demand – through, for example, home insulation and better heating and lighting.

Again, I agree. In BC, the site C hydro project is a great example of a green energy project. Conservation to reduce demand is also an area where regulation is reasonable.

The pandemic exposes the need for better neighbourhood design, with less public space given to cars and more to people. It also shows how badly we need the kind of security that a lightly taxed, deregulated economy cannot deliver.

What the hell does this mean? More policing? More authoritarian control? No thanks.

In other words, let’s have what many people were calling for long before this disaster hit: a green new deal.

The so called “green new deal” called for universal basic income. It should have been called the “red new deal”.

But please let’s stop describing it as a stimulus package. We have stimulated consumption too much over the past century, which is why we face environmental disaster. Let us call it a survival package, whose purpose is to provide incomes, distribute wealth and avoid catastrophe, without stoking perpetual economic growth. Bail out the people, not the corporations. Bail out the living world, not its destroyers. Let’s not waste our second chance.

Don’t bail out the corporations. Don’t increase the welfare state either. Stop mortgaging our children’s future. At most, we should pay for exceptional medical expenses incurred due to Covid-19. Protect the old and the unhealthy, but expect the rest of us to take care of ourselves. The government shouldn’t be forcing businesses to close. Some businesses will have a hard time while people naturally socially distance. Don’t bail them out. Give people who lose their jobs unemployment benefits for a reasonable period. It will be hard, and people will die no matter what we do, but saddling our children with debt is not the answer.

About jimbelton

I'm a software developer, and a writer of both fiction and non-fiction, and I blog about movies, books, and philosophy. My interest in religious philosophy and the search for the truth inspires much of my writing.
This entry was posted in philosophy and tagged , , , , , , , , , , . Bookmark the permalink.

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s