Barney Frank hits a Home Run

[Gordon B]

Reprinted from http://www.clubforgrowth.org/blog/archives/039110.php
comments by Club For Growth contributor Andrew Roth

A Liberal Teaches Republicans About Free Markets

Congressman Barney Frank (D-MA) is so liberal that we disagree with him about 99% of the time on fiscal issues. However, he gave a GREAT speech yesterday on the House floor that I’ve republished below.

Let me set up the speech this way — on Tuesday, the House debated the Agriculture Appropriations bill. Several Republicans were offering amendments to subsidize and protect various industries. Or they were publicly voicing their opposition to proposals that cut protectionist programs (i.e. an amendment that sought to cut sugar subsidies by 6%). This prompted Barney Frank to stand up and say:

Mr. Chairman, I am here to confess my reading incomprehension. I have listened to many of my conservative friends talk about the wonders of the free market, of the importance of letting the consumers make their best choices, of keeping government out of economic activity, of the virtues of free trade, but then I look at various agricultural programs like this one. Now, it violates every principle of free market economics known to man and two or three not yet discovered.

So I have been forced to conclude that in all of those great free market texts by Ludwig von Mises, Friedrich Hayek and all the others that there is a footnote that says, by the way, none of this applies to agriculture. Now, it may be written in high German, and that may be why I have not been able to discern it, but there is no greater contrast in America today than between the free enterprise rhetoric of so many conservatives and the statist, subsidized, inflationary, protectionist, anti-consumer agricultural policies, and this is one of them.

In particular, I have listened to people, and some of us have said let us protect workers and the environment in trade; let us not have unrestricted free trade; but let us have trade that respects worker rights and environmental rights. And we have been excoriated for our lack of concern for poor countries.

There is no greater obstacle, as it is now clear in the Doha round, to the completion of a comprehensive trade policy than the American agricultural policy, with one exception, European agricultural policy, which is much worse and just as phony.

Sugar is an example. This program is an interference with the legitimate efforts at economic self-help in many foreign nations. So I appreciate the leadership of the gentleman from Arizona [Jeff Flake] and the gentleman from Oregon [Roy Blumenauer]. Here is a chance for some of my free-enterprise-professing friends to get honest with themselves, and now maybe we will see some born-again free enterprisers in the agricultural field.

Brilliant!

[Gary Sisco]

True. In vain, though, as brilliance normally is.

[Doc Martin]

I have never, and I mean never, seen any evidence that Republicans are any stronger (in the long run) on the total free market package. Most republicans I am aware of are quite against it as far as I can tell, favoring a corporate/state conjoining similar to Germany in the first half of the 20th century. (Not to say that I've seen any evidence that the Democratic Party supports free markets either, I have only seen evidence of individuals supporting the free market).

Several years ago, I watched on CSPAN as Barney Frank and Gerald Solomon debated dairy subsidies. Solomon, the conservative, represented a dairy farming district, and supported the subsidies.
Frank represents urban consumers of milk, and opposed subsidies and price supports. Frank made reference to Mises, Hayek and Friedman in his speech supporting the free market side.
So this is not a total fluke, although it is clearly a matter of representing the interests of the district, rather than abstract free market ideology.

[Gary Sisco]

They're not. It's just fuel for tongue wagging. They wouldn't know a free market -- if only because one would necessarily include the free movement of labor as well as capital -- if it bit them on the ass and even then they wouldn't like it.

[Root Doctor]

http://www.cato.org/pubs/pas/pa225.html

"This study finds that corporate pork is pervasive.

Congress funds more than 125 programs that subsidize private businesses.


Business subsidy programs cost federal taxpayers more than $85 billion annually and the dollar amount has been growing substantially in recent years.


Every major cabinet department, including the Defense Department, has become a conduit for government funding of private industry. Within some cabinet agencies, such as the Department of Agriculture and the Department of Commerce, almost every spending program underwrites private businesses.
The following list includes some of the more egregious taxpayer subsidies to industries and firms.

Through Sematech, a consortium of very large U.S. computer microchip producers, the Pentagon provides nearly $100 million a year of support to the industry. But of the more than 200 chipmakers in the United States, only the 14 largest, including Intel and National Semiconductor, receive federal support from Sematech.[3] Originally designed to help U.S. firms compete against foreign competition, Sematech now subsidizes the largest producers to help fend off smaller domestic competition.[4]


An estimated 40 percent of the $1.4 billion sugar price support program benefits the largest 1 percent of sugar farms. The 33 largest sugar cane plantations each receive more than $1 million.[5]


Through the Rural Electrification Administration and the federal power marketing administrations, the federal government provides some $2 billion in subsidies each year to large and profitable electric utility cooperatives, such as ALLTEL, which had sales of $2.3 billion last year.[6] Federally subsidized electricity holds down the costs of running ski resorts in Aspen, Colorado, five-star hotels in Hilton Head, South Carolina, and gambling casinos in Las Vegas, Nevada.[7]


Last year the Forest Service spent $140 million building roads in national forests, thus subsidizing the removal of timber from federal lands by multi-million-dollar timber companies. Over the past 20 years the Forest Service has built 340,000 miles of roads -- more than eight times the length of the interstate highway system -- primarily for the benefit of logging companies.[8]


The Department of Agriculture Market Promotion Program spends $110 million per year underwriting the cost of advertising American products abroad. In 1991 American taxpayers spent $2.9 million advertising Pillsbury muffins and pies, $10 million promoting Sunkist oranges, $465,000 advertising McDonald's Chicken McNuggets, $1.2 million boosting the international sales of American Legend mink coats, and $2.5 million extolling the virtues of Dole pineapples, nuts, and prunes.[9]


Last year a House of Representatives investigative team discovered that federal environmental cleanup and defense contractors had been milking federal taxpayers for millions of dollars in entertainment, recreation, and party expenses.[10] Martin Marietta Corporation charged the Pentagon $263,000 for a Smokey Robinson concert, $20,000 for the purchase of golf balls, and $7,500 for a 1993 office Christmas party. Ecology and Environment, Inc., of Lancaster, New York, spent $243,000 of funds designated for environmental cleanup on "employee morale" and $37,000 on tennis lessons, bike races, golf tournaments, and other entertainment.[11] Such activities give new meaning to the term "corporate welfare."

Congress can no longer afford to ignore the growing scourge of corporate welfare. Any serious attempt to balance the budget will require a strategy for getting businesses off the $85 billion annual dole."

This was written in 1995. One can only imagine how much fatter this pig has grown.

[Gary Sisco]

A free market to these motherfuckers means they can help themselves to this pile of cash and that pile of cash and so forth.

[Darryl G. Thomas]

Usually when protectionism is talked about the image of the family farmer is invoked. If our agriculture was dominated by small, family farmers protectionism might be legit. But from what I've read US agriculture is dominated by huge agribusinesses. So that explains Republican support for farm subsidies.

[Uli]

Originally Posted by Gordon B

Brilliant!

Really?

Everybody and their cousins know that.

It's a shame that one mite admire the guts it apparently takes to spread common knowledge in congress.

I agree, Franks did good, except he should've directed his diatribe to all concerned, not just the republicans.

[Maybe if we subsidized oil it'd keep the prices at the pump down. tsk]

[rollhead]

Originally Posted by Doc Martin

I have never, and I mean never, seen any evidence that Republicans are any stronger (in the long run) on the total free market package. Most republicans I am aware of are quite against it as far as I can tell, favoring a corporate/state conjoining similar to Germany in the first half of the 20th century. (Not to say that I've seen any evidence that the Democratic Party supports free markets either, I have only seen evidence of individuals supporting the free market).

Several years ago, I watched on CSPAN as Barney Frank and Gerald Solomon debated dairy subsidies. Solomon, the conservative, represented a dairy farming district, and supported the subsidies.
Frank represents urban consumers of milk, and opposed subsidies and price supports. Frank made reference to Mises, Hayek and Friedman in his speech supporting the free market side.
So this is not a total fluke, although it is clearly a matter of representing the interests of the district, rather than abstract free market ideology.

Gerald Solomon was my congressman in a heavily Republican, gerrymandered district (which loops around liberal Albany). The Republican farmers around here hate government, but are the first in line to shake down government and weap loudest when any effort is made to reduce or do away with subsidies. But of course, it didn't stop them from loudly complaining about Clinton's hypocricies.

Republicans only like free market ideology when it benefits their financial backers.

By the way, Solomon has been replaced here by John Sweeney, the New York congressman and right-wing henchman who helped organize the "spontanious" rioting of "Floridians" over the 2000 recount.

[Scott Dolan]

Originally Posted by jazzbluescat

[Maybe if we subsidized oil it'd keep the prices at the pump down. tsk]

We already do. And quite heavily.

Originally Posted by Scott Dolan

We already do. And quite heavily.

You're shitting me, when did this start? Surely not to the oil companies?

[Scott Dolan]

http://www.earthtrack.net/earthtrack/index.asp?catid=54

Originally Posted by Scott Dolan

http://www.earthtrack.net/earthtrack/index.asp?catid=54

Are we being cranky?

[Dr Dave]

Scott's link is excellent, but let this spell it out for you:

original link here

U.S. Oil Industry Subsidies – $5 Billion Every Year

1. Immediate Expensing of Exploration and Development Costs – $200 million/year Oil, gas, and coal producers can immediately expense (write off) most or all of their development costs. Other businesses must deduct these expenses over a longer period of time.
2. Percentage Depletion Allowance for Oil and Gas – $600 million/year
Independent oil and gas companies can deduct 15 percent of their sales revenue using the special percentage depletion allowance – instead of the standard cost depreciation – regardless of the actual loss in value over time.
3. Requiring Full Coal Firm Support for the Black Lung Fund – $350 million/year
Designed to internalize the health-related costs of coal mining, this fund requires government support to pay for work-related disabilities of coal miners.
4. Intangible Drilling Costs – $500 million/year
Integrated oil and gas companies can immediately deduct 70 percent of "intangible" drilling costs. Most other businesses deduct such expenses over time and therefore receive less of a tax benefit.
5. Passive Loss for Oil and Gas – $100 million/year
This tax shelter for investors in oil and gas allows certain owners to offset "passive losses" against income to pay lower taxes.
6. Non-Conventional Fuel Production Credit – $1.3 billion/year
This tax credit for certain types of fuel extracted from "non-conventional" sources was intended to provide incentives for petroleum alternatives, but most of the credit has gone for oil and gas production.
7. Tax Breaks for Enhanced Oil Recovery – $100 million/year
Expensing (writing off) tertiary injectant costs and the tax credit for enhanced oil recovery encourage extraction of difficult to reach and expensive oil deposit remnants.
8. Clean Coal Technology Program – $250 million/ year
This program helps finance private companies to develop cleaner burning coal technologies by providing up to 50 percent in federal matching funds.
9. Coal R&D – $100 million/year
The Department of Energy supports research in technology programs for producing, refining, and burning coal products.
10. Other Fossil Energy R&D – $100 million/year
The federal government provides subsidies for oil and natural gas research and development.
11. Multilateral Development Bank Loans for Fossil Fuel – $80 million/year
The U.S. federal government supports several multilateral development banks, which provide loans for fossil fuel development in other countries.
12. Export Import Bank Guarantees for Fossil Fuel – $300 million/year
The Export Import Bank provides federal loan guarantees for investments in unstable countries. A portion of these loans are used for fossil fuel development.
13. Capital Gains Treatment of Royalties on Coal – $15 million/year
Individual owners (as opposed to corporations) who lease out their coal mining rights are able to pay capital gains taxes on these royalties, rather than the higher top individual income tax rate.
14. Income Tax Exemption for Publicly Owned Utilities – $200 million/year
Publicly owned utilities and cooperatives are not subject to federal income tax on their profits or retained earnings. Some of these utilities use fossil fuels.
15. Rural Utilities Service Loans – $900 million/year
The federal government provides low-interest loans to rural-electrification cooperatives. These cooperatives have invested heavily in energy plants using fossil fuels.
16. Tax Exemption for Publicly Owned Utility Bonds – $550 million/year
Publicly owned utilities (POUs) can issue tax-exempt bonds. A significant portion of POUs have invested in energy sources using fossil fuels.

Holy shit.

[Scott Dolan]

Cranky?

I was pointing you towards facts that you have no idea existed.

[Al in NYC]

I'm not a free marketeer, and don't really believe that such a thing can exist in reality, or if it did that would be of any particular benefit to the human race. But the thing that makes me the most crazy about the folks who talk the loudest in our politics about the so-called "free" market is their immense hypocrisy. I'm glad to see Barney Frank call them on it.

It has always seemed to me that these so-called "free" market folks stand only, in the end, for private enrichment and control, and an extremely limited public sphere. In fact, as this sort of action shows, the type of public sphere they really want is one that rewards them, protects them, limits potential competition, and limits the rights of any possible opposition to them. One that puts workers and the rest of us as much in thrall to capital and the logic of profit as possible, an idea which they cover up by making it look like irrefutable science when it suits them, or like naked power when necessary. As Gary says, these people couldn't deal with anything like a true free market, and would try as quickly as possible to legislate it out of existence if it ever came to pass.

What this sort of "free" market inevitably means in practice is a market that is "free" and truly beneficial only to those in power, and their powerful friends. For these beacons of freedom it means let us line our pockets and those of our friends, rig the terms of the game to ensure continued pocket lining, limit the rights of our opposition as much as possible, and fuck you jack. Can it be that the real voices for freedom, such as they are in the US today, come from the left(ish) portion of the spectrum of our politics, from the much-reviled ALCU and their ilk? It is a strange and ugly world indeed in which those in support of actual freedom and individual rights are castigated as anti-American and shunted off to the margins, while the most naked forms of favoritism and corruption go unchecked and virtually unopposed in our federal government under the guise of "freedom." A world in which Barney Frank, a loony marginal political figure to the "free" market right, has to stand up and tell them (vainly, as Gary points out ) what their own purported philosophy actually means.

You can see how little these "free" marketeers think of human freedom in any meaningful sense, and how far they will go to protect their prerogatives, by the people they ally themselves with: the old-line bigots of the old south, the theocratic Christian right, all those who want to limit or curtail any rights of workers, the dictators of poor (but often resource rich) third world countries, the anti-internationalists, the isolationist closed border nationalists, the neo-con (neo-imperialist) might-makes-right militarists, and of course the whole semi-secret world of the mercenaries (umm, “contractors”), the kidnappers (uh, sorry, "rendition specialists”), the torturers, the phone tappers, the data collectors, the people who believe that any excess of government control and intrusion can be excused by the magic words "national security". Real freedom lovers to be sure these folks -- in love with their freedom to maximize their profits and to stifle anyone who opposes their quest to do so.

[Slurpy]

Great post, Al!

Originally Posted by Scott Dolan

Cranky?

I was pointing you towards facts that you have no idea existed.

Oh. I thought you thought that I didn't know what subsidizing means, I do.

I'll have to study this oil subsidizing a bit, it smells funny.

[Gordon B]

Originally Posted by Slurpy

Great post, Al!

Every free market person I know would take Barney Frank's side against that of Congress.

Al's diatribe is not really directed against pro-market folk but against politicians.

[Al in NYC]

Originally Posted by Gordon B

Every free market person I know would take Barney Frank's side against that of Congress.

Al's diatribe is not really directed against pro-market folk but against politicians.

True, my diatribe was aimed at the politicans. But I can't forget that these politicians, and their party, are who most pro-market folk have decided to side with and support. And a group less interested in people's freedom, and more interested in the enrichment and protection of a certain class, would in my view be hard to find in American history. Which only serves to deepen my skepticism about the dedication of most of the free market crowd to actual freedom -- particularly if it threatens to cut into their profits.

[Gordon B]

Originally Posted by Al in NYC

True, my diatribe was aimed at the politicans. But I can't forget that these politicians, and their party, are who most pro-market folk have decided to side with and support. And a group less interested in people's freedom, and more interested in the enrichment and protection of a certain class, would in my view be hard to find in American history. Which only serves to deepen my skepticism about the dedication of most of the free market crowd to actual freedom -- particularly if it threatens to cut into their profits.

You haven't been reading libertarian or conservative writers these days. Most of them, bloggers and op-ed writers alike are disgusted with the Republican Congress and Bush.

[Uli]

Originally Posted by Gordon B

You haven't been reading libertarian or conservative writers these days. Most of them, bloggers and op-ed writers alike are disgusted with the Republican Congress and Bush.

Better late than never.

[Al in NYC]

Originally Posted by Gordon B

You haven't been reading libertarian or conservative writers these days. Most of them, bloggers and op-ed writers alike are disgusted with the Republican Congress and Bush.

Yeah, but first they elected this Congress, and elected Bush, and then even given the evidence elected him again. It wasn't like there weren't folks out here who told them exactly what was going to happen. There were lots of us, and we got called a lot of nasty names for our trouble.

Whole fat lot of good it does for you folks to complain now.

[Dr Dave]

Originally Posted by Al in NYC

True, my diatribe was aimed at the politicans. But I can't forget that these politicians, and their party, are who most pro-market folk have decided to side with and support. And a group less interested in people's freedom, and more interested in the enrichment and protection of a certain class, would in my view be hard to find in American history. Which only serves to deepen my skepticism about the dedication of most of the free market crowd to actual freedom -- particularly if it threatens to cut into their profits.

As a dyed-in-the-wool free trader and liberal, it is difficult to respond to your post except to say that the politicians you are talking about have learned to say "free trade" but remain deeply suspicious of it. Which is to say they are not free trade advocates at all. They are just another protectionist life-form, albeit with a more evolved talent for hypocrisy and duplicity.

[walto]

Originally Posted by Al in NYC

I'm not a free marketeer, and don't really believe that such a thing can exist in reality, or if it did that would be of any particular benefit to the human race.

I'm utopian about "free markets." I think they would improve the lot of most people, but only if they were "really free" (in the Georgist sense). Without eliminating rent-seeking in natural resources and a tax and regulatory system that's prejudicial to workers and investors, what you get when you "deregulate" is often just worse for everybody except those who are paying the politicians for the "deregulation."

But the thing that makes me the most crazy about the folks who talk the loudest in our politics about the so-called "free" market is their immense hypocrisy. I'm glad to see Barney Frank call them on it.

I agree with Gordon that this paragraph is unfair to the true believers. They aren't evil hypocrites, just, IMHO, generally, wrong.

It has always seemed to me that these so-called "free" market folks stand only, in the end, for private enrichment and control, and an extremely limited public sphere. In fact, as this sort of action shows, the type of public sphere they really want is one that rewards them, protects them, limits potential competition, and limits the rights of any possible opposition to them. One that puts workers and the rest of us as much in thrall to capital and the logic of profit as possible, an idea which they cover up by making it look like irrefutable science when it suits them, or like naked power when necessary. As Gary says, these people couldn't deal with anything like a true free market, and would try as quickly as possible to legislate it out of existence if it ever came to pass.

More of the same there, I think. As Gordon says, there are lots of honest libertarians. The internet seems absolutely full of them. Generally, they don't have much experience in government, and they have a restrictive notion of freedom. Politicians, otoh, mostly do what they think will get them re-elected. The geographical nature of our divvying up of offices determines to a very significant extent what subsidies they'll support or oppose. But let's not be so self-righteous about this--voters (i.e., citizens--even those who post knowingly on internet sites) are pretty much the same. They want subsidies that will benefit them, oppose those that don't, and want their legislators to represent their (our) interests. And our geographical location affects those interests. Libertarians are in general, less hypocritical than others on this stuff--simply because they're more inclined to think about it. At least I think so. Of course that doesn't make them right about anything. But it's not "free marketers" that are to blame for the widespread hypocracy in politics, though it may be that those who ape their talk are big contributers.

What this sort of "free" market inevitably means in practice is a market that is "free" and truly beneficial only to those in power, and their powerful friends. For these beacons of freedom it means let us line our pockets and those of our friends, rig the terms of the game to ensure continued pocket lining, limit the rights of our opposition as much as possible, and fuck you jack. Can it be that the real voices for freedom, such as they are in the US today, come from the left(ish) portion of the spectrum of our politics, from the much-reviled ALCU and their ilk? It is a strange and ugly world indeed in which those in support of actual freedom and individual rights are castigated as anti-American and shunted off to the margins, while the most naked forms of favoritism and corruption go unchecked and virtually unopposed in our federal government under the guise of "freedom." A world in which Barney Frank, a loony marginal political figure to the "free" market right, has to stand up and tell them (vainly, as Gary points out ) what their own purported philosophy actually means.

It's hard to disagree with this point that the "leveling of a playing field" (into something that probably will just have an even deeper slope) is going to benefit those in certain positions. I guess all changes to the status quo would result in winners and losers. So, the question is, will the result be "better" or "fairer" or whatever than the present system. And, of course, the devil is in the details and the definitions. Libertarianism is a sort of religion, according to which "removal of regulations" absolutely must produce an improved world, due to efficiency gains and the "invisible hand." I think they're completely wrong about this, but, again, insisting that they're evil and are trying to steal good people's money under the guise of a laissez-faire philosophy is probably mistaking corporate PR (which Congressmen copy for their own purposes) for political philosophy.

You can see how little these "free" marketeers think of human freedom in any meaningful sense, and how far they will go to protect their prerogatives, by the people they ally themselves with: the old-line bigots of the old south, the theocratic Christian right, all those who want to limit or curtail any rights of workers, the dictators of poor (but often resource rich) third world countries, the anti-internationalists, the isolationist closed border nationalists, the neo-con (neo-imperialist) might-makes-right militarists, and of course the whole semi-secret world of the mercenaries (umm, “contractors”), the kidnappers (uh, sorry, "rendition specialists”), the torturers, the phone tappers, the data collectors, the people who believe that any excess of government control and intrusion can be excused by the magic words "national security". Real freedom lovers to be sure these folks -- in love with their freedom to maximize their profits and to stifle anyone who opposes their quest to do so

You're really rolling here, Al, and I almost hate to interrupt, but while I agree that libertarians may be incorrect about what "freedom" is, to blame "free marketers" for stuff like phone tapping and kidnapping is a bit much. This sort of angry and unwarranted attack on a political foe much reminds me of attacks from the right on guys like Gore. I understand your anger with what's currently happening in this country and share it in many ways. But your post seems to me kind of...well...Limbaughian. I guess it's OK to fight fire with fire. Maybe it's even necessary sometimes. But let's be clear what we're doing.

Anyhow, you're an extremely passionate writer, and I think there are a number of candidates who could use (and I hope will find) your speech-writing skills before it's too late...

[Gordon B]

Originally Posted by Al in NYC

Yeah, but first they elected this Congress, and elected Bush, and then even given the evidence elected him again. It wasn't like there weren't folks out here who told them exactly what was going to happen. There were lots of us, and we got called a lot of nasty names for our trouble.

Whole fat lot of good it does for you folks to complain now.

Republicans were clearly better than Democrats on economic freedom issues from 1980-2000. They aren't worse now, merely no better. Kerry offered nothing to economic libertarians in 2004. Nevertheless, they split in their 2004 votes, basically deciding based on foreign policy.

Your posts send me the message that in your view there is no such thing as a principled conservative or libertarian.

[Gary Sisco]

One of the largest petroleum industry subsidies isn't included in Dr Dave's very good list: that would be the amazing cost of paved highways. Which is also one of history's largest-ever subsidies of another basic of American capitalism: the automobile industry.

They'll start if they haven't already (which I doubt) adding even more subsidies to the oil and auto industries for the "hybrid" auto and auto fuel bidniss. The Pentagon will hand out a huge pile of party favors for that bit, as well, on top.

Fact is, American capitalism, esp since WW2, has been and remains a system of public investment for private profit.

And they're slowly moving toward mandatory public investment for private profit, in the form of "privatizing" social security and the most regressive and idiotic scam of all, mandatory health insurance (not health care, mind; health insurance). In short, mandatory "contributions" of venture capital, taken weekly out of your paycheck, in both cases. Together, they'll very quicky add up to hundreds of billions in profits.

[Gary Sisco]

Not to mention the very direct personal subsidies of the ruling class itself in the form of Bushfeldocheneywitz, Inc.'s "tax breaks."