Like corporate welfare queens everywhere, Justice pitches his plea for taxpayer bailouts in terms of jobs. Yet Governor Justice’s proposal, for example, would simply prolong the dying of an industry that has been declining for years, because West Virginia coal is increasingly expensive and difficult to mine, in the face of national and international competition. Just over 12,000 West Virginians still work in the coal industry.
Conservatives were justifiably outraged when the Obama administration poured billions of dollars in subsidies into companies like Solyndra and other “green energy” programs. They correctly made the point that if alternative‐energy technologies were economically viable, they should take their place in the market and succeed or fail on their merits. Bailouts don’t become free‐market policies just because the industry being bailed out is one you like.
We should know by now that President Trump has little interest in free‐market capitalism. From trade policy to the Import‐Export Bank to his support for ethanol subsidies, Trump has made it clear that his idea of “making America great again” involves government picking winners and losers, largely based on the president’s whims and whether the workers who would benefit voted for him. Far from draining the swamp, Donald Trump simply wants to feed his alligators rather than Democratic ones.
The Cato Institute estimates that corporate welfare costs American taxpayers more than $100 billion annually. And worse than the direct cost is the way in which such subsidies distort the economic decision‐making process and limit the creative destruction that drives innovation and economic growth. The beneficiaries of corporate welfare are seldom entrepreneurs and innovators — or even workers — but rather those crony capitalists who have the right connections or who know how to work the system. This sort of crony capitalism encourages businesses to invest in lobbying and cozying up to politicians rather than invest in serving their customers or developing new products.
That’s a terrible way to run an economy. In fact, studies show that economies dominated by crony capitalism grow more slowly than free‐market economies. By upending market efficiencies, corporate welfare makes us all worse off.
Let’s be clear. I have long been critical of most social‐welfare programs. In the long run, they do more harm than good. Still, it would be nice, for once, if conservatives fought as hard against a bailout for some company as they do against, say, an increase in food stamps.
After all, welfare is welfare.