How The Democrats Love Their Corporate Welfare Policy
By: Warner Todd Huston
What is it we hear echoing in the left-o-sphere? Don’t we hear all the time that the left is chock-full-o-nuts on how those eeeevil capitalists are so in love with what they call “corporate welfare”? Aren’t the nutrooters always railing about how the right is so in bed with business, giving them oh so many tax breaks? Of course, the left loves their corporate welfare, too. So much so that they’ve gone back to slipping it into play even when it was defeated not only by the right, but deplored and castigated by the left’s pals in Europe and the international community.
I am talking, of course, about the infamous (and infamy is the proper word) Byrd Amendment. This little bit of poison was repealed by Congress in 2005, but the decrepit Byrd and his shifty friends snuck it back into law by camouflaging it in a recent spending bill. So now it’s back as law even though many countries in the world are upset about it, even though it harmed our trading reputation the last time this dose of hemlock was forced on our trading partners world wide, even though all it really ends up being is corporate welfare.
So, what is it? Itâ€™s a nasty piece of protectionist policy — the Continued Dumping and Subsidy Offset Act — that makes it quite lucrative for American businesses to claim that they are put at an unfair advantage by foreign products. How it works is a U.S. company will file paperwork with the federal government claiming that they are being harmed by unfair business practices from a foreign product. The government then slaps a high, punitive tariff on that foreign product and pays the American business the amount of the increased tariff. That’s it. The business doesn’t have to prove anything. There is no inspection agency, accounting agency or compliance agency to check the claims. They just get paid.
It was also meant to take some investigative burdens off the federal government. Instead of the government doing the investigating, it was up to the US business to file the complaint and any punitive tariff fees would go directly to any US company making the complaint instead of into the US treasury where tariffs are supposed to go. This made it quite lucrative for big business to suddenly find that they were being treated meanly by foreign companies… whether it was true or not. After all, big business had the prerequisite large legal department to file the paperwork. Then, they could take their large windfall and use that to beat the competition even here in the US, driving smaller companies to the brink of bankruptcy with a different form of unfair trading practices; government subsidy.
In August, the Wall Street Journal reported the costs of this thing.
As of 2007, some $1.9 billion had been handed out to thousands of supplicants, from bee keepers to steel manufacturers. The lion’s share has gone to big business. A GAO report found that between 2001 and 2004, more than half of Byrd money went to five companies, and 20% went to just one, an Ohio bearings maker named Timken. In the 2007 rankings of 1,982 payees, Idaho’s Micron semiconductor company won the jackpot, with $37,938,402.
In September, the warning that the Journal gave in August came to pass. Foreign nations are beginning to slap high tariffs on our own exports because of the unfair tariffs they are suddenly facing.
Specifically, Japan’s cabinet decided late last month to slap a 10% tariff on ball bearings and tapered roller bearings that could knock U.S. producers out of competition in Japan. The decision cited what Japan’s Ministry of Finance accurately calls “illegal disbursement under the ‘Byrd Amendment.’” That follows a European Union decision in May to extend punitive duties on a range of other American products. The tariffs hit just as U.S. exports have become the main source of American growth amid the housing slump and credit crunch.
What we have here is the Democrats giving free money to big business. This is called corporate welfare. This also means that Democrats and their henchmen on the left are not telling the world the truth when they say they are against such things.
When even their pals in Europe are steamed, one would think the American left would take notice. But, when it means filling their pockets, there is no ideology, no principle but greed by which they live.
So, nice going Byrdies. But, I sure hope you tell your voters in America’s manufacturing sector why they are losing their jobs and seeing their plants close down.