Corporate Welfare Quotes
Abrams originated this famous phrase which many have been used subsequently for various “socialized” government benefits that were available to the rich but not the poor. He was referring to the fact that at the time, the government provided housing assistance to the rich by having federally insured mortgages and granting tax deductions for the interest in home mortgages, but there was no assistance to the poor who could only afford to rent and had no tax deductions nor was there any federal public housing assistance. During the Great Recession the phrase was often used when the government gave bail out money to General Motors and the largest banks who were close to bankruptcy, but the landscaping gardener or the hot dog vendor whose business was falling because of the recession were told that is the capitalist system—there are some winners and some losers. The government officials who advocated the bailout did not disagree about the fairness and appropriateness of the Abrams phrase but if they had not bailed the banks out, the entire economic system of the country would probably have collapsed and the ensuing depression would hurt the average worker and the poor even more. Related to the recent “too big to fail” concept.
Unfortunately for McCain too many Republicans feared his ideas of reform such as elimination of corporate welfare and campaign finance reform. He lost to George W. Bush.
Much if the American industrial revolution was assisted by government subsidies of one kind or another. Railroads, telegraph, armaments, foundries are just a few.
While many use the invention and development of the Steamboat as an example of breakthrough technology by private enterprise, the reality was that Fulton and Livingston could not raise the private capital to develop the vessels and start operating them until the State government stepped in and granted them a monopoly for 20 years in the waters of the entire state of New York including the Hudson River and New York Harbor. This was one of the first examples of “corporate welfare” and subsidies for development of new technology. Fulton’s company used the courts to enjoin anyone else from operating a steamboat, and Fulton could charge very high rates as he had no competition thanks to New York State. Other boat operators then went to New Jersey which passed its own allowing anyone stopped by NY courts to sue Fulton & Livingston for triple damages. The lower Hudson River and New York Harbor was on the shores of BOTH states and each had an equal claim to jurisdiction. The Supreme Court settled the dispute in one of the major legal cases in American history. See {624485}
This Republican mantra has been central for the Republicans for the entire century after Theodore Roosevelt who thought that business had to be regulated and controlled. The same basic speech has been given by conservative Republicans ever since.
While this is a common complaint in the American political dialogue at the beginning of the 21st century, it is interesting that this was the conclusion of a foreign political scholar studying that period—one who was generally a great admirer of America.
While many use the invention and development of the Steamboat as an example of breakthrough technology by private enterprise, the reality was that Fulton and Livingston could not raise the private capital to develop the vessels and start operating them until the State government stepped in and granted them a monopoly for 20 years in the waters of the entire state of New York including the Hudson River and New York Harbor. This was one of the first examples of “corporate welfare” and subsidies for development of new technology. Fulton’s company used the courts to enjoin anyone else from operating a steamboat, and Fulton could charge very high rates as he had no competition thanks to New York State. Other boat operators then went to New Jersey which passed its own allowing anyone stopped by NY courts to sue Fulton & Livingston for triple damages. The lower Hudson River and New York Harbor was on the shores of BOTH states and each had an equal claim to jurisdiction. The Supreme Court settled the dispute in one of the major legal cases in American history. See {624486}
Most Americans agreed with this policy upon which Cleveland had run, but it was not favored by the companies that had been benefitting from monopolies, protective tariffs, corporate subsidies and corporate welfare, and government largess. Ironically, at the time, large American business was generally opposed to free trade and were supported by the Republican Party. The Democrats wanted free trade—just the opposite of the beginning of the 21st century.
