Capitalism With Benefits: The Republicans Remain Big Oil’s Prostitute

Mar 09 2011 Published by under Uncategorized

Republican spending cuts so far are aimed at regulatory agencies and social programs that serve millions of working-class Americans and the poor. They have been single-minded in eliminating programs based on religious dogma even though their cuts will eradicate nearly a million jobs in total if they have their way. They have not seriously considered cutting defense spending or raising taxes on corporations or the rich, and have made no effort to create jobs. President Obama proposed cutting subsidies and tax breaks for oil companies as a means of cutting expenditures, but Republicans have categorically refused to consider ending the giveaway to the most lucrative industry in America.

Republicans, conservative pundits and think tanks consistently promote free enterprise while they decry entitlement spending for citizens, and yet they continue bestowing subsidies on an industry that is awash in profits. Conservatives will never admit it, but subsidies are corporate entitlements that Republicans fight for at the expense of social programs that help millions of American citizens. Republican hypocrisy is despicable, but giving entitlements to the energy industry while they are reaping immense profits shows contempt for the American people.

At a House Federal Budget Oversight meeting last week, Tom Davis, (former chairman of the oversight committee), Gene Dodaro (Comptroller General), and Ryan Alexander (Taxpayers for Common Sense) testified that the oil industry receives subsidies and avoids paying royalties for oil they extract from the Earth.  The three expert witnesses reiterated their belief that the oil industry should not receive subsidies, and must begin paying royalties for the oil they take. Each of the witnesses also informed the committee that Democrats (Ed Markey D-Mass) have proposed legislation to “encourage” the oil industry to pay the royalties but every Republican legislator voted against measure.

Whether or not Republicans believe it is acceptable to give entitlements to the energy industry, there is an aspect of the issue that is contradictory to conservative’s belief in free market capitalism. Throughout the health care reform debate, Republicans repeated the mantra that allowing free market capitalism to drive health care costs down was preferable to reforming the health care system. The Republicans branded health care reform a socialist program even though the AHCA effectively guarantees the insurance industry 40 million new customers when the law is fully enacted. Giving subsidies to an established industry whether it is agriculture, manufacturing, or energy is entitlement spending, but for Republicans, entitlements are fine as long as corporations are the recipients.

It is understandable to give grants and subsidies to emerging technologies until they become established, but the oil industry is not emerging and consistently posts record profits. Subsidies for clean energy make sense to allow innovation and development, but once they are established the handouts should cease.  Government subsidies pay an industry if the price of their goods falls below a certain level worked out between the industry in question and the government. One would think that the champions of free market capitalism would stay true to their ideology, but Republicans have no integrity.

If the price of oil falls below a profitable level, it is too bad for them. Americans are not beholden to the oil industry, and it is not their responsibility to insure that it remains profitable if the market drives prices down. Republicans have claimed for two years that the government cannot afford to give citizens assistance for anything and have labeled the unemployed, retired, and disabled lazy for expecting government handouts the country can ill-afford. Republicans claim America is broke as their reason to cut spending on social programs, and yet have no problem giving free money and resources to the oil industry. The GOP is not willing to enforce royalty collection on the oil industry, so the industry is getting free oil and the government is paying them to take it. It does not resemble free market capitalism because it is free money. It is no wonder the economy is stagnating; revenue is decreasing and oil companies receive tax breaks and taxpayer dollars while recording outlandish profits.

There are myriad reasons America is facing economic uncertainty, and with record deficits, it makes sense to look carefully at cutting spending on wasteful programs. Giving tax breaks, subsidies, and free natural resources to the oil industry is beyond wasteful and the country cannot afford to continue guaranteeing the oil industry’s record profits.

Americans are hungry, unemployed, and losing their homes but Republicans will not stop giving free money and resources to the oil industry. If Republicans believe that free market capitalism is the ideal for America, let corporations succeed or fail on their own. If a citizen walked into a market, loaded their shopping cart and demanded cash for the goods they were stealing, they would be summarily thrown in jail. Oil companies take natural resources without paying for them and receive cash because it is acceptable to Republicans. As with all things Republican, they bristle at the thought of holding the oil industry to the same standards that ordinary Americans must conform to. Instead of letting free market principles the GOP advocates control business, they are handing out entitlements that could be used to pay down the deficit and help ordinary citizens. However, helping Americans is not part of the GOP’s ideology unless the Americans’ names are Koch, Shell, Exxon-Mobil and BP.

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