Sunday, November 14, 2010

Joe Biden said this.

I don't know how I missed this, but Joe Biden, using his own lips, teeth, tongue and throat, under his own free will, made the following statement a few weeks ago:

“Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive,” he said. “In the middle of the Civil War you had a guy named Lincoln paying people $16,000 for every 40 miles of track they laid across the continental United States. … No private enterprise would have done that for another 35 years.”

You can go here to experience a joyous rebuttal from The Cato Institute:

Early American railroads were built almost entirely with private funds. These railroads provided such superior transportation that by 1850 they had put most toll roads and canals out of business. Individual states still competed with one another for business—and may have offered various favors to the railroads serving those states…. For the most part, however, no federal and few state subsidies went to railroads in the eastern United States.

But what about other areas?

Whenever politicians interfered in the railroad business, however, corruption and inefficiency inevitably occurred.....There was no money to be made from operating a railroad through a desolate wasteland, yet the federal government rewarded railroad contractors with big subsidies: a thirty-year loan at below market interest rates; twenty sections (12,800 acres) of government-owned land for every mile of track; and an additional subsidy of $48,000 for every mile of track laid in mountainous regions.

Thomas Durant, Oakes Ames, and other officers of the Union Pacific Railroad, which went a thousand miles west from Council Bluffs, Iowa, started the Credit Mobilier company in 1867 and retained it to do the construction. Credit Mobilier distributed to shareholders profits estimated at between $7 million and $23 million, depleting the Union Pacific’s resources. In an effort to stop congressional investigations, the officers bribed Speaker of the House James G. Blaine and other congressmen with Credit Mobilier stock. Seldom modest about their thievery, congressmen voted themselves a 50 percent pay raise. The Union Pacific Railroad fell deep into debt, without enough revenue from passengers or shippers, and went bankrupt in 1893.

Here's a Cato transportation timeline entry on all you need to know about the Credit Mobilier scandal:

1872:  The New York Sun exposes the Credit Mobilier scandal, perhaps the largest business subsidy scandal of the 19th century.8 Credit Mobilier is a construction company financially controlled by the leaders of the Union Pacific Railroad that makes huge profits at taxpayer expense. Congressman Oakes Ames (R-MA), who is an agent of Credit Mobilier and part-owner, distributes shares of the firm's stock to members of Congress at a discounted value. In return, those members treat Credit Mobilier favorably in a variety of ways, such as by voting to appropriate funds for the firm. The scandal illustrates the corruption that usually results when the government intervenes in the economy and subsidizes businesses.

If that's not enough, George Will opens a great column with Biden's quote.  In this case, its about our next transportation-subsidy-scandal-waiting-to-happen....The Chevy Volt. 
You might think that you've never purchased a Chevy Volt.  But you have.  Yes, you have. 

The federal government, although waist-deep in red ink, offers another bribe: Any purchaser can get a tax credit of up to 50 percent of the cost (up to $2,000) of an extra-powerful (240-volt) charger. California, although so strapped it recently issued IOUs to vendors, offers a $5,000 cash rebate for which Volt buyers are not eligible but purchasers of Nissan's electric Leaf are. Go figure.

In April, in a television commercial and a Wall Street Journal column headlined "The GM Bailout: Paid Back in Full," GM's then-CEO Ed Whitacre said "we have repaid our government loan, in full, with interest, five years ahead of the original schedule." Rubbish.

GM, which has received almost $50 billion in government subventions, repaid a $6.7 billion loan using other federal funds, a TARP-funded escrow account. Sen. Charles Grassley (R-Iowa) called this a "TARP money shuffle." A commentator compared it to "paying off your Visa credit card with your MasterCard."

Meretricious accounting and deceptive marketing are inevitable when government and its misnamed "private sector" accomplices foist state capitalism on an appalled country. But those who thought the ethanol debacle defined outer limits of government foolishness pertaining to automobiles were, alas, mistaken.

And finally, Reason magazine jumps on the dogpile with this:

What was the "government vision and government incentive" that produced the assembly line?Motion-picturefilmAirconditioning? The electric guitar?

How about the personalcomputer? The mobile phone? Non-violentresistance?  Aspirin?

Though Biden is generally not to be taken seriously, the government-centrism of his comments are an accurate reflection of his boss, and part of the reason why next Tuesday is going to be an awkward day
of work at 1600 Pennsylvania Ave.

As it turns out, last Tuesday was an awkward day of work at 1600 Pennsylvania Avenue.  Unfortunately, Democrats were replaced by Republicans.  Republicans who favor many of the same economic interventions but for different industries. 

Oh well.  Joe Biden really did make that statement.  No eggs were thrown and no one laughed because it went largely unreported and unanalyzed in The Mainstream Media. 
Go here to read about The Mainstream Media's quest for a journalism subsidy. 

Joe Biden - A Real Man Of Genius

1 comment:

Harper said...

Did you catch the editorial about high speed rail in the Star-Telegram?

"On Oct. 28, the Department of Transportation gave out $2.4 billion in grants to high-speed rail projects. This is on top of the $8 billion included in the American Recovery and Reinvestment Act, commonly known as the stimulus package...

...only three of the United States' eight new high-speed rail corridors that received funding will feature trains capable of reaching speeds in excess of 110 miles per hour.

Embarrassingly, passenger trains in the 1940s regularly met or exceeded these speeds."