Historic Profits

And why taxpayers shouldn’t stand for it any more

by Bill McKibben

Le Monde diplomatique (April 09 2012)

Along with “fivedollaragallongas”, the energy watchword for the next few months is: “subsidies”. Last week, for instance, New Jersey Senator Robert Menendez proposed ending some of the billions of dollars in handouts enjoyed by the fossil-fuel industry with a “Repeal Big Oil Tax Subsidies Act”. It was, in truth, nothing to write home about – a curiously skimpy bill that only targeted oil companies, and just the five richest of them at that. Left out were coal and natural gas, and you won’t be surprised to learn that even then it didn’t pass.

Still, President Obama is now calling for an end to oil subsidies at every stop on his early presidential-campaign-plus-fundraising blitz – even at those stops where he’s also promising to “drill everywhere”. And later this month Vermont Senator Bernie Sanders will introduce a much more comprehensive bill that tackles all fossil fuels and their purveyors (and has no chance whatsoever of passing this Congress).

Whether or not the bill passes, those subsidies are worth focusing on. After all, we’re talking at least $10 billion in freebies and, depending on what you count, possibly as much as $40 billion annually in freebie cash for an energy industry already making historic profits. If attacking them is a convenient way for the White House to deflect public anger over rising gas prices, it is also a perfect fit for the new worldview the Occupy movement has been teaching Americans. (Not to mention, if you think about it, the Tea Party focus on deficits.) So count on one thing: we’ll be hearing a lot more about them this year.

But there’s a problem: the very word “subsidies” makes American eyes glaze over. It sounds so boring, like something that has everything to do with finance and taxes and accounting, and nothing to do with you. Which is just the reaction that the energy giants are relying on: that it’s a subject profitable enough for them and dull enough for us that no one will really bother to challenge their perks, many of which date back decades.

By some estimates, getting rid of all the planet’s fossil-fuel subsidies could get us halfway to ending the threat of climate change. Many of those subsidies, however, take the form of cheap, subsidized gas in petro-states, often with impoverished populations – as in Nigeria, where popular protests forced the government to back down on a decision to cut such subsidies earlier this year. In the US, though, they’re simply straightforward presents to rich companies, gifts from the 99% to the 1%.

If due attention is to be paid, we have to figure out a language in which to talk about them that will make it clear just how loony our policy is.

Start this way: you subsidize something you want to encourage, something that might not happen if you didn’t support it financially. Think of something we heavily subsidize – education. We build schools, and give government loans and grants to college kids; for those of us who are parents, tuition will often be the last big subsidy we give the children we’ve raised. The theory is: young people don’t know enough yet. We need to give them a hand when it comes to further learning, so they’ll be a help to society in the future. From that analogy, here are five rules of the road that should be applied to the fossil-fuel industry.

1. Don’t subsidize those who already have plenty of cash on hand. No one would propose a government program of low-interest loans to send the richest kids in the country to college. (It’s true that schools may let them in more easily on the theory that their dads will build gymnasiums, but that’s a different story.) We assume that the wealthy will pay full freight. Similarly, we should assume that the fossil-fuel business, the most profitable industry on Earth, should pay its way, too. What possible reason is there for giving Exxon the odd billion in extra breaks? Year after year the company sets record for money-making – last year it managed to rake in a mere $41 billion in profit, just failing to break its own 2008 all-time mark of $45 billion.

2. Don’t subsidize people forever. If students need government loans to help them get bachelor’s degrees, that’s sound policy. But if they want loans to get their 11th Bachelor degree, they should pay themselves. We learned how to burn coal 300 years ago. A subsidized fossil-fuel industry is the equivalent of a nineteen-year-old repeating third grade yet again.

3. Sometimes you’ll subsidize something for a sensible reason and it won’t work out. The government gave some of our money to a solar power company called Solyndra. Though it was small potatoes compared to what we hand over to the fossil-fuel industry, it still stung when they lost it. But since we’re in the process of figuring out how to perfect solar power and drive down its cost, it makes sense to subsidize it. Think of it as the equivalent of giving a high-school senior a scholarship to go to college. Most of the time that works out. But since I live in a college town, I can tell you that twenty percent of kids spend four years drinking: they’re human Solyndras. It’s not exactly a satisfying thing to see happen, but we don’t shut down the college as a result.

4. Don’t subsidize something you want less of. At this point, the greatest human challenge is to get off of fossil fuels. If we don’t do it soon, the climatologists tell us, our prospects as a civilization are grim indeed. So lending a significant helping hand to companies intent on driving us towards disaster is perverse. It’s like giving a fellowship to a graduate student who wants to pursue a thesis on “Strategies for Stimulating Donut Consumption Among Diabetics”.

5. Don’t give subsidies to people who have given you cash. Most of the men and women who vote in Congress each year to continue subsidies have taken campaign donations from big energy companies. In essence, they’ve been given small gifts by outfits to whom they then return large presents, using our money, not theirs. It’s a good strategy, if you’re an energy company – or maybe even a congressional representative eager to fund a reelection campaign. Oil Change International estimates that fossil-fuel companies get $59 back for every dollar they spend on donations and lobbying, a return on investment that makes Bernie Madoff look shabby. It’s no different from sending a college financial aid officer a hundred-dollar bill in the expectation that he’ll give your daughter a scholarship worth tens of thousands of dollars. Bribery is what it is. And there’s no chance it will yield the best energy policy or the best student body.

These five rules seem simple and straightforward to me, even if they don’t get at the biggest subsidy we give the fossil-fuel business: the right – alone among industries – to pour their waste into the atmosphere for free. And then there’s the small matter of the money we sink into the military might we must employ to guard the various places they suck oil from.

Simply getting rid of these direct payoffs would, however, be a start, a blow struck for, if nothing else, the idea that we’re not just being played for suckers and saps. This is the richest industry on Earth, a planet they’re helping wreck, and we’re paying them a bonus to do it.

In most schools outside of K Street, that’s an answer that would get a failing grade and we’d start calling subsidies by another name. Handouts, maybe. Freebies. Baksheesh. Payola. Or to use the president’s formulation, “all of the above”.

_____

This article was first published in TomDispatch, 5 avril 2012.

Bill McKibben is Schumann Distinguished Scholar at Middlebury College, founder of the global climate campaign 350.org, a TomDispatch regular, and the author, most recently, of Eaarth: Making a Life on a Tough New Planet (2010).

More by Bill McKibben: http://mondediplo.com/_Bill-McKibben_

http://mondediplo.com/openpage/payola-for-the-most-profitable-corporations-in

Article source: http://billtotten.wordpress.com/2012/05/03/payola-for-the-most-profitable-corporations-in-history/

Article source: http://historicprofits.com/2012/05/03/payola-for-the-most-profitable-corporations-in-history-bill-tottens/

Article source: http://historicprofits.com/2012/05/05/payola-for-the-most-profitable-corporations-in/

Article source: http://historicprofits.com/2012/05/05/payola-for-the-most-profitable-corporations-in-historic-profits/

And why taxpayers shouldn’t stand for it any more

by Bill McKibben

Le Monde diplomatique (April 09 2012)

Along with “fivedollaragallongas”, the energy watchword for the next few months is: “subsidies”. Last week, for instance, New Jersey Senator Robert Menendez proposed ending some of the billions of dollars in handouts enjoyed by the fossil-fuel industry with a “Repeal Big Oil Tax Subsidies Act”. It was, in truth, nothing to write home about – a curiously skimpy bill that only targeted oil companies, and just the five richest of them at that. Left out were coal and natural gas, and you won’t be surprised to learn that even then it didn’t pass.

Still, President Obama is now calling for an end to oil subsidies at every stop on his early presidential-campaign-plus-fundraising blitz – even at those stops where he’s also promising to “drill everywhere”. And later this month Vermont Senator Bernie Sanders will introduce a much more comprehensive bill that tackles all fossil fuels and their purveyors (and has no chance whatsoever of passing this Congress).

Whether or not the bill passes, those subsidies are worth focusing on. After all, we’re talking at least $10 billion in freebies and, depending on what you count, possibly as much as $40 billion annually in freebie cash for an energy industry already making historic profits. If attacking them is a convenient way for the White House to deflect public anger over rising gas prices, it is also a perfect fit for the new worldview the Occupy movement has been teaching Americans. (Not to mention, if you think about it, the Tea Party focus on deficits.) So count on one thing: we’ll be hearing a lot more about them this year.

But there’s a problem: the very word “subsidies” makes American eyes glaze over. It sounds so boring, like something that has everything to do with finance and taxes and accounting, and nothing to do with you. Which is just the reaction that the energy giants are relying on: that it’s a subject profitable enough for them and dull enough for us that no one will really bother to challenge their perks, many of which date back decades.

By some estimates, getting rid of all the planet’s fossil-fuel subsidies could get us halfway to ending the threat of climate change. Many of those subsidies, however, take the form of cheap, subsidized gas in petro-states, often with impoverished populations – as in Nigeria, where popular protests forced the government to back down on a decision to cut such subsidies earlier this year. In the US, though, they’re simply straightforward presents to rich companies, gifts from the 99% to the 1%.

If due attention is to be paid, we have to figure out a language in which to talk about them that will make it clear just how loony our policy is.

Start this way: you subsidize something you want to encourage, something that might not happen if you didn’t support it financially. Think of something we heavily subsidize – education. We build schools, and give government loans and grants to college kids; for those of us who are parents, tuition will often be the last big subsidy we give the children we’ve raised. The theory is: young people don’t know enough yet. We need to give them a hand when it comes to further learning, so they’ll be a help to society in the future. From that analogy, here are five rules of the road that should be applied to the fossil-fuel industry.

1. Don’t subsidize those who already have plenty of cash on hand. No one would propose a government program of low-interest loans to send the richest kids in the country to college. (It’s true that schools may let them in more easily on the theory that their dads will build gymnasiums, but that’s a different story.) We assume that the wealthy will pay full freight. Similarly, we should assume that the fossil-fuel business, the most profitable industry on Earth, should pay its way, too. What possible reason is there for giving Exxon the odd billion in extra breaks? Year after year the company sets record for money-making – last year it managed to rake in a mere $41 billion in profit, just failing to break its own 2008 all-time mark of $45 billion.

2. Don’t subsidize people forever. If students need government loans to help them get bachelor’s degrees, that’s sound policy. But if they want loans to get their 11th Bachelor degree, they should pay themselves. We learned how to burn coal 300 years ago. A subsidized fossil-fuel industry is the equivalent of a nineteen-year-old repeating third grade yet again.

3. Sometimes you’ll subsidize something for a sensible reason and it won’t work out. The government gave some of our money to a solar power company called Solyndra. Though it was small potatoes compared to what we hand over to the fossil-fuel industry, it still stung when they lost it. But since we’re in the process of figuring out how to perfect solar power and drive down its cost, it makes sense to subsidize it. Think of it as the equivalent of giving a high-school senior a scholarship to go to college. Most of the time that works out. But since I live in a college town, I can tell you that twenty percent of kids spend four years drinking: they’re human Solyndras. It’s not exactly a satisfying thing to see happen, but we don’t shut down the college as a result.

4. Don’t subsidize something you want less of. At this point, the greatest human challenge is to get off of fossil fuels. If we don’t do it soon, the climatologists tell us, our prospects as a civilization are grim indeed. So lending a significant helping hand to companies intent on driving us towards disaster is perverse. It’s like giving a fellowship to a graduate student who wants to pursue a thesis on “Strategies for Stimulating Donut Consumption Among Diabetics”.

5. Don’t give subsidies to people who have given you cash. Most of the men and women who vote in Congress each year to continue subsidies have taken campaign donations from big energy companies. In essence, they’ve been given small gifts by outfits to whom they then return large presents, using our money, not theirs. It’s a good strategy, if you’re an energy company – or maybe even a congressional representative eager to fund a reelection campaign. Oil Change International estimates that fossil-fuel companies get $59 back for every dollar they spend on donations and lobbying, a return on investment that makes Bernie Madoff look shabby. It’s no different from sending a college financial aid officer a hundred-dollar bill in the expectation that he’ll give your daughter a scholarship worth tens of thousands of dollars. Bribery is what it is. And there’s no chance it will yield the best energy policy or the best student body.

These five rules seem simple and straightforward to me, even if they don’t get at the biggest subsidy we give the fossil-fuel business: the right – alone among industries – to pour their waste into the atmosphere for free. And then there’s the small matter of the money we sink into the military might we must employ to guard the various places they suck oil from.

Simply getting rid of these direct payoffs would, however, be a start, a blow struck for, if nothing else, the idea that we’re not just being played for suckers and saps. This is the richest industry on Earth, a planet they’re helping wreck, and we’re paying them a bonus to do it.

In most schools outside of K Street, that’s an answer that would get a failing grade and we’d start calling subsidies by another name. Handouts, maybe. Freebies. Baksheesh. Payola. Or to use the president’s formulation, “all of the above”.

_____

This article was first published in TomDispatch, 5 avril 2012.

Bill McKibben is Schumann Distinguished Scholar at Middlebury College, founder of the global climate campaign 350.org, a TomDispatch regular, and the author, most recently, of Eaarth: Making a Life on a Tough New Planet (2010).

More by Bill McKibben: http://mondediplo.com/_Bill-McKibben_

http://mondediplo.com/openpage/payola-for-the-most-profitable-corporations-in

Article source: http://billtotten.wordpress.com/2012/05/03/payola-for-the-most-profitable-corporations-in-history/

Article source: http://historicprofits.com/2012/05/03/payola-for-the-most-profitable-corporations-in-history-bill-tottens/

[Note:  This item comes from reader Brett Glass.  DLH]

From: Brett Glass brett@lariat.net
Subject: SOPA: Pro-regulation companies are suddenly anti-regulation when it hurts profits from piracy
Date: January 21, 2012 9:16:02 PM PST
To: “Dewayne Hendricks” dewayne@warpspeed.com

Google is no friend of Internet freedom
By Phil Kerpen
Published January 20, 2012

For the better part of a decade, companies like Google and IAC/InterActiveCorp have been pushing for the federal government to regulate the Internet in the name of net neutrality, and I’ve been fighting them every step of the way.

We beat them in Congress.

We beat them in the courts.

We beat them in public opinion.

But we lost to them on a 3-2 party line vote at the Federal Communications Commission, led by long-time IAC/InterActiveCorp general counsel turned FCC chairman Julius Genachowski. The FCC’s unlawful order gives that commission the self-appointed power to regulate how the broadband networks that comprise the Internet operate. (At least until courts again weigh in and stop them.)

This is an ongoing, high-stakes fight over whether the physical infrastructure of the Internet will remain a competitive, free-market, innovative foundation for the broader technology sector and the U.S. economy, or be reduced to something more like a regulated utility or even a government-owned-and-operated network.

Google and its allies have for years argued that a free-market, unregulated Internet will result in Internet service providers blocking web sites, disrupting services, and otherwise wreaking havoc, ignoring the obvious effectiveness of competition to discipline such abuses. They’ve told us that only benevolent government regulators can protect us.

Net neutrality regulations benefit those companies, of course, by ensuring they won’t pay any of the cost of building broadband networks, leaving those considerable costs to fall completely on consumers and taxpayers.

So I’m suffering from serious cognitive dissonance when the very same companies that have adamantly pursued regulation of the physical networks that comprise the Internet have now taken to the airwaves in eight states in opposition to SOPA with a radio ad that says:

“New onerous regulations are the last thing we need from Washington as our nation is struggling to get back on its feet. But in our nation’s capitol some members of Congress are trying to pass a bill that would do just that, regulate the internet, the one part of our economy that has been growing. That makes no sense.”

It sounds like they took notes on our fight against their net neutrality regulatory push and adopted our messages as their own. This from a group of companies, NetCoalition, whose website boasts its lobbyist Markham Erickson “serves as lead counsel to Google, eBay, Amazon.com, IAC, Skype, and other Internet and technology companies… advocating for ‘network neutrality’ before the FCC, the FTC, and the U.S. Congress.” The leading advocate of regulating the Internet now appears as an opponent of regulating the Internet.

Bizarre.

[Snip]

Full text at

http://www.foxnews.com/opinion/2012/01/20/google-is-no-friend-internet-freedom/

Article source: http://www.warpspeed.com/wordpress/?p=8448

Article source: http://netneutrality.ws/2012/01/22/dewayne-net-technology-weblog/

Article source: http://netneutrality.ws/2012/01/22/dewayne-net-technology-weblog-net-neutrality/

Article source: http://netneutrality.ws/2012/01/23/dewayne-net-technology-weblog-net-neutrality-net-neutrality/

Article source: http://historicprofits.com/2012/01/23/dewayne-net-technology-weblog-net-neutrality-net-neutrality/

Article source: http://historicprofits.com/2012/04/29/dewayne-net-technology-weblog-net-neutrality-2/

Post by The Gist on 9/13/2006 12:06pm

For a few months now Dane101 has been hammering away at the issue of Network Neutrality. As an independent, web-based media source we favor the preservation of network neutrality. While we have touched on the opposing position we have rarely presented both sides together. When we saw a well written article in the Madison monthly paper The Gist that presented both sides free of bias, we felt it would be prudent to syndicate the story on our site so our readers can make up their own minds. Written by Gina Walejko, this article can also be found in the latest issue of The Gist.

The Internet has been billed as a place where everyone, from corporate executives to average Joes, has an equal voice and open access to information. Many fear, however, that the days of egalitarian Internet service may end if Congress fails to pass a “network neutrality” law that would force Internet service providers to treat all content equally.

Network neutrality, or net neutrality, a term first coined by Columbia law professor Tim Wu, maintains that Internet service providers (ISPs) and telecommunications companies must treat all Internet content and services without discrimination.

Two Sides of the Story

Net neutrality supporters worry that Internet service providers like ATT, Comcast and Verizon will favor certain content and services over others. Yahoo, for example, could pay Internet service provider ATT to have Yahoo e-mail work faster than Google’s Gmail. As a result, ATT Internet users would find themselves pressured to use Yahoo Mail. Supporters of network neutrality feel that this type of favoritism would stifle innovation and competition on the Internet.

Net neutrality advocates also worry about the scarcity of Internet service providers. If users become dissatisfied with their ISPs, they have few alternative choices. With no competitors to choose from, Gmail users would be stuck with an ATT service that favors Yahoo e-mail.

Dr. Wu suggests that we view network neutrality like an Interstate. The ISPs are the “owners” of the highway. Internet content and services such as e-mail, downloaded music and web pages are the cars and trucks. Would it be fair if the owners of the interstate allowed General Motors a special lane for GM cars because they had paid more?

Opponents of network neutrality follow a hands-off, libertarian argument. They suggest that cable and telephone companies should be allowed to regulate themselves.

According to a Washington Post editorial, “60 percent of zip codes in the United States are served by four or more broadband providers.” Opponents of net neutrality feel that consumers could easily switch ISPs if they are unhappy with their service. Competition would thus force ISPs to keep a neutral network without federal legislation.

Challengers also argue that government regulation stifles innovation and competition on the Internet. Vanderbilt University law professor Christopher Yoo suggests that exclusivity agreements between ISPs (like ATT) and other companies (like Yahoo) may actually promote competition and innovation.

Prof. Yoo suggests thinking of a tiered Internet service as functioning like FedEx: some customers pay more for packages to be delivered faster. As Yoo said in an interview with the Wharton School, “One-size-fits-all pricing confines all of us to the slow lane.”

Goliath Versus Goliath

Despite what some may think, the fight over network neutrality is not simply between honest individuals and free-market-loving ISPs. Today’s debate pits Goliath against Goliath.

In addition to Professor Wu, giants such as Microsoft, Google, and eBay support network neutrality. Without it, ISPs could charge these companies hefty fees for fast service. Google provides its users with a “Guide to Net Neutrality for Google Users” which explains why individuals should support network neutrality.

The other Goliath, telecommunications companies such as ATT, Comcast, Sprint, Verizon and Time Warner, objects to the idea of network neutrality; these companies argue that large companies currently pay no money to use their resources. Charging big companies with lots of Internet content to use their services, ISPs say, is like charging semi-trucks more to ride on a highway. Bigger trucks use up more space. Currently, “big rigs” like Microsoft, Google and eBay pay nothing.

Some argue that allowing ISPs to charge Google and Microsoft money to provide their content at higher speeds will lower Internet prices for consumers. Others fear that allowing Google and Microsoft to pay money for faster “lanes” will make it harder for users to access smaller companies’ Internet content.

Congressional Action

Increases in Internet use have recently forced the issue of network neutrality into the political arena. Non-profit organizations including It’s Our Net and Save the Internet have sprung up in support of network neutrality.

On June 8, the House of Representatives passed H.R. 5252, or the Communications Opportunity Promotion and Enhancement (COPE) Act. Although the act gives the Federal Communications Commission (FCC) the power to fine telecommunication companies that violate network neutrality, supporters of network neutrality criticize the bill for failing to impose stricter regulations.

Wisconsin representatives were split on the vote. Democrats Tammy Baldwin, Gwen Moore, David R. Obey, and Republican James Sensenbrenner voted against the COPE Act.

Sen. Russ Feingold has come out in favor of net neutrality. Sen. Herb Kohl has not declared his position on the issue.

A pro-neutrality amendment to the COPE Act by Democrat Ed Markey of Mass. was defeated. The Markey Amendment called for the “non-discriminatory” operating of Internet networks, regardless of the origin of the content or service. Wisconsin representatives Mark Green, Thomas Petri, and Paul Ryan, all Republican, voted against the amendment.

On June 28th, the Senate Commerce Committee approved a telecommunications reform bill, but supporters of net neutrality believe that it does little to help their cause. An amendment ensuring “fair treatment of all Internet content” was narrowly defeated by a tie vote of 11-11. Currently, no Wisconsin senator sits on the Senate Commerce Committee.

Decisions, Decisions

The Senate battle over network neutrality is not over. As advocates of both sides receive media attention, as well as millions of dollars and lobbying support from big businesses, individuals may feel caught in the middle.

Ultimately, the issue revolves around money. Although ISPs such as Verizon and ATT make ideological claims about the free market, they stand to make huge profits in a tiered system that charges Internet content companies more for faster service.

Content providers like Google and Microsoft also support network neutrality for monetary reasons. While they may paint the issue as a battle over democratic representation on the Internet, they stand to pay large sums of money to ISPs if a network neutrality bill does not pass.

Much remains to be seen in the network neutrality debate. No one knows how Internet service providers will choose to handle future content that they provide to users. No one knows which will best promote competition and innovation: self-regulation or government regulation. One thing is certain, however: more is at stake than the profits of giant corporations. We must learn to look past the profit-driven sermons of these companies and decide the issue for ourselves. The future of the Internet is in the balance.

Article source: http://www.dane101.com/node/1461

Article source: http://netneutrality.ws/2012/04/27/the-gist-navigating-net-neutrality-dane101/

Article source: http://historicprofits.com/2012/04/28/the-gist-navigating-net-neutrality-dane101-net-neutrality/

Article source: http://historicprofits.com/2012/04/28/the-gist-navigating-net-neutrality-dane101-net/