Charles Koch's Love Letter to Bernie Sanders Reveals The True Insanity of Right Wing Economics

Last week, fanatic rightwing billionaire Charles Koch proclaimed his ideological solidarity with Bernie Sanders on the issue of corporate welfare in America. He is lying.
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Ben Cohen
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Last week, fanatic rightwing billionaire Charles Koch proclaimed his ideological solidarity with Bernie Sanders on the issue of corporate welfare in America. He is lying.
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Last week, fanatic rightwing billionaire Charles Koch penned an opinion piece in the Washington Post proclaiming his ideological solidarity with Bernie Sanders on the issue of corporate welfare in America. 

On the face of it, Koch's tone was conciliatory, reasonable, and -- shockingly -- quite human. 

"The senator [Bernie Sanders] is upset with a political and economic system that is often rigged to help the privileged few at the expense of everyone else, particularly the least advantaged," wrote Koch. "He believes that we have a two-tiered society that increasingly dooms millions of our fellow citizens to lives of poverty and hopelessness. He thinks many corporations seek and benefit from corporate welfare while ordinary citizens are denied opportunities and a level playing field."

"I agree with him."

What? Charles Koch, the billionaire responsible for extreme right wing propaganda campaigns to undermine progressive politics at every turn,  is now concerned about wealth inequality and poverty? This, the same man who plowed millions into vicious wars against the poor with contributions to fanatic free market ideologues like Scott Walker and Mitt Romney, and has fought tooth and nail to ensure the poor get no access to affordable health care. 

Koch continued: 

Democrats and Republicans have too often favored policies and regulations that pick winners and losers. This helps perpetuate a cycle of control, dependency, cronyism and poverty in the United States. These are complicated issues, but it’s not enough to say that government alone is to blame. Large portions of the business community have actively pushed for these policies.

Consider the regulations, handouts, mandates, subsidies and other forms of largesse our elected officials dole out to the wealthy and well-connected. The tax code alone contains $1.5 trillion in exemptions and special-interest carve-outs. Anti-competitive regulations cost businesses an additional $1.9 trillion every year. Perversely, this regulatory burden falls hardest on small companies, innovators and the poor, while benefitting many large companies like ours. This unfairly benefits established firms and penalizes new entrants, contributing to a two-tiered society.

There is some truth to what Koch says here -- corporate federal subsidies have helped prop up some of the most destructive, anti-competitive corporations in history (think the entire financial sector for example). But Koch's blanket statement that "anti-competitive regulations cost businesses an additional $1.9 trillion every year" provides the key in understanding his deceptive little screed. Firstly, the link Koch provided is to the Competitive Enterprise Institute -- a widely discredited far right libertarian think tank funded by Koch himself.  The authors of the study themselves accept that quantifying the cost of what they call "anti-competitive regulations" is basically impossible, then proceed to do it anyway. It goes without saying that serious economists found the report to be "hugely flawed", "terribly inaccurate" and "an opinion piece" that "policymakers and the media would do well to ignore." 

Anti-trust laws exist for good reason. They provide perhaps the only way of preventing America from turning into a kleptocratic robber baron society controlled entirely by monopolistic corporations.  It also, as Paul Krugman points out, promotes true competitiveness and innovation: 

There’s good reason to believe that monopoly is itself a barrier to innovation. Ms. Crawford argues persuasively that the unchecked power of telecom giants has removed incentives for progress: why upgrade your network or provide better services when your customers have nowhere to go?

And the same phenomenon may be playing an important role in holding back the economy as a whole. One puzzle about recent U.S. experience has been the disconnect between profits and investment. Profits are at a record high as a share of G.D.P., yet corporations aren’t reinvesting their returns in their businesses. Instead, they’re buying back shares, or accumulating huge piles of cash. This is exactly what you’d expect to see if a lot of those record profits represent monopoly rents.

Of course Koch would refute this obvious fact due to his maniacal belief in absolute power and morality free markets. In his post, he writes:

Whenever we allow government to pick winners and losers, we impede progress and move further away from a society of mutual benefit. This pits individuals and groups against each other and corrupts the business community, which inevitably becomes less focused on creating value for customers. That’s why Koch Industries opposes all forms of corporate welfare — even those that benefit us. (The government’s ethanol mandate is a good example. We oppose that mandate, even though we are the fifth-largest ethanol producer in the United States.)

With this deeply misleading statement, Koch is attempting to distract readers from the only reason he is a billionaire, and claim a moral high ground because he is now in a position to kick down the ladder he and his family climbed to get to the top. 

The truth is, the Koch empire was built off the back of the oil industry -- an industry supported, subsidized and protected by the US government since its inception. Like all major sectors of the US economy -- aviation, tech, big pharma, agriculture and so on -- the oil industry has only thrived because the government protected it during its infancy. This is not a conspiracy theory, but a historical fact conclusively proven by Cambridge economist Ha Joon Chang, who shows every major industrialized economy has thrived due to government subsidies and protectionism policies. Governments also continue to develop new markets for these major industries through trade agreements, and in some cases, outright conquest (see the war in Iraq for example). The Koch family piggy backed off this convenient arrangement that allowed their industry to grow, and now wants to dismantle it for everyone else. They can afford to do without the government's ethanol mandate, but only because they are now big enough to survive by themselves -- an inconvenient detail Koch doesn't think necessary to discuss. 

Bernie Sanders believes the government should be used to the benefit of industry and people -- an ideology consistent with the history and reality of successful industrialized nations. Charles Koch believes the government should have little to no role in the economy whatsoever, despite the fact that it made him one of the richest men in the world. While he and Bernie Sanders' ideologies do intersect on a couple of issues, they deviate at virtually every other point on the political spectrum. Koch understands this perfectly and is cynically using issues like poverty and inequality to further his cynical objectives to consolidate his power and wealth -- as if he didn't have enough of it already.