Arthur Brooks has an important op-ed in the Wall Street Journal, arguing that we’re already a European-style social-welfare state. Most interesting to me, that largely includes corporate welfare. Brooks writes:
The second force leading us down the social-democratic road is cronyism. America possesses a full-time bipartisan political apparatus dedicated to government growth and special deals for favored individuals and sectors. For example, the farm bill that just passed the Senate contains around $100 billion in subsidies, mostly for large, corporate farms that do nothing to improve nutrition or food security. Or witness the recently reauthorized Export-Import Bank, which doles out about $20 billion annually in corporate welfare.
I think Brooks is basically correct, but I think Europe is far further along than we are. I think competition and love of upstarts is part of the American psyche, while cooperation and respect for the elites is a European trait.
I’ve hammered away at Ex-Im and its biggest beneficiary Boeing more than anyone, but the Boeing guys have this going for them: European jetmaker Airbus isn’t merely a subsidy suckler — it’s nearly a government agency. A French prime minister once said, “We will give Airbus the means to win the battle against Boeing.”
I wrote a paper in 2005 titled “Boeing v. Airbus: Clash of the Corporate Welfare Titans,” in which I pointed out:
To begin with, Airbus was born from the womb of European governments. The consortium of European aerospace firms came together “at the direction of the French, German, British, and Spanish governments,” according to the U.S. International Trade Administration (ITA).13 Indeed, a Memorandum of Understanding signed in 1967 between the British, French, and German governments spurred production of Airbus’ A300. An ITA report notes that, “[t]hose governments paid for between 75 percent and 100 percent of the total costs of development of Airbus’s original product line.”
Airbus is significantly a government-owned company. Since 2001, the European Aeronautic Defence and Space company (EADS) has owned 80 percent of the company and British Aerospace (BAE) the other 20 percent.
