Thursday, September 15, 2005

Corporate Welfare

Should the government bail out bankrupt businesses? Both Republicans and Democrats are willing to subsidize certain industries that are either strong political contributors to their party, or are seen as vital to the American economy. Delta and Northwest Airlines are the latest to receive this so called corporate welfare. However, the results will likely be smaller, slightly more expensive, and less frequent flights in the restructuring after filing Chapter 11. This doesn't appear to help the American consumer, and rarely does.

Libertarians are the most consistent in their opposition to corporate welfare, believing the free market should be allowed to weed out these failing businesses and allow new, more efficient replacements. This would seem to be the best method of dealing with failed businesses, since it routinely happens to smaller companies all the time. The problem is, because of large campaign contributions from these major corporations, politicians are more than happy to fork over subsidies to keep their generous financiers afloat. It is a vicious circle which is almost impossible to penetrate. As a result of corporate welfare policies, it is extremely difficult for new start up companies to enter the market. In fact, it is very comparable to the difficulty challengers face in defeating an incumbent in a political campaign. Is this just a coincidence?

Media policies are just as ripe with this corruption. The Telecommunications Act of 1996, signed into law by President Bill Clinton, virtually eliminated the rules limiting media ownership by any one company within the industry. The result has been massive consolidation, conglomeration, and a loss of diversity across the media spectrum coupled with an explosion in commercialism and a stifling of new technologies attempting to bypass them. The concept of publicly owned airwaves, bandwidth, and spectrum have virtually disappeared thanks to massive privatization efforts jointly crafted by corrupt policy makers and corporate media lobbyist outside of any public input, interest, or view.

For a more detailed outline and resulting consequences of this policy, see the following link:

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