Republicans push corporate welfare for the coal industry
Posted April 17, 2015 by Lewis Loflin
The Republican Party is at odds with Gov. McAuliffe over corporate welfare tax credits for coal companies and power companies that burn coal. While Republicans revile Obamacare and private welfare in general they have zero problems with corporate welfare.
This started when Virginia was facing and over $2 billion budget gap that was going to be closed by raising taxes and cutting programs such as education.
The so-called severance tax for years has been a huge kickback scheme for local politicians and economic developers that Gov. McAuliffe rightly notes has produced virtually no public benefit. Yet this is the general outcome of most corporate welfare and incentive packages handed out under the guise of economic development.
There's been very little to show for any of their efforts. A few people have become very wealthy while most of the region remains in the bottom 10% nationally. This program cost Virginia taxpayers $20 million annually.
The Republicans argue that we must fund low-seam coal because the Virginia export economy can't do without it. So are we paying foreign importers to buy a product that produces little benefit to the average citizen? Whatever happened that capitalism?
The arguments from Republicans is that the corporate welfare package for the coal industry and its users in the electricity industry is a benefit to the public through lower electric cost. This makes absolutely no sense - most of the electricity produced isn't used in this region to begin with.
The argument from Republicans is that many marginal and unprofitable coal mines would close. Yet I thought the Republicans were the champions of capitalism but apparently that is a mistake. These marginal mines should go out of business as should any other failing and unprofitable entity.
The Virginia Chamber of Commerce also opposes cutting the corporate welfare tax credits, which I also thought was supposed to be pro-capitalist. Due to government meddling, private public partnerships, and a vast array of corporate welfare programs Virginia does not have a capitalist economy - we have a corporatist crony capitalism economy.
Most of the wealth in Virginia is generated from government particularly in eastern and northern Virginia. The rest of the state and particularly Southwest and Southside Virginia are low-wage Third World territories beset by political corruption aggravated by crony capitalism.
Wealth redistribution Virginia is through business, to business, for business, and benefits business. Virginia is a very labor hostile state.
In a state government study the coal industry corporate welfare tax credit has been shown to be the least effective in achieving their goals to protect mining jobs and boosting production says politicians. Politicians admit to coalfields need help probably losing half their jobs since the election of the Obama administration since 2008.
But to blame Obama for the decline of coal is simplistic and often erroneous. Hydraulic fracturing of natural gas and oil is simply making coal unattractive economically. Appalachian coal in particular is becoming depleted, expensive to mine, and is a casualty of market forces. Don't tell our corporatist Republicans that.
Reference Bristol Herald Courier January 29, 2015.
In another blow to the declining coal industry SunCoke energy lays off another 150 miners. This brings the number of job losses with this one company to 325 in Buchanan County Virginia. The County is already in desperate straits suffering, according to the Bureau of Labor Statistics, an almost 30% disability rate.
Tens of millions plowed into the county seat of Grundy under the guise of economic revitalization have utterly failed. This includes a $250 million flood control program that produced a single Walmart. Now that it's completed we have nothing to show for it.
SunCoke reported around $100 million in losses. The company is blaming market conditions. But the economic damage goes far beyond 325 high paying jobs - this will take down three times as many service jobs. The total job loss is more like 1000 jobs. This will leave the residents of the County more than ever dependent on government handouts.
Reference Bristol Herald Courier January 30, 2015.
In another case of Republican crony capitalism the Bristol Herald Courier January 29, 2015 is reporting that Washington County Virginia politicians are trying to add more private property to our retail developer corporate welfare program. By now classifying shopping malls as having "regional impact" millions of dollars slated for legitimate economic development, education, etc. is being diverted to strip mall developers.
Bristol Virginia and Washington County Virginia have been in court several times fighting over retail development. Bristol Virginia is receiving approximately $100 million for the Falls retail development off I-81.
The bill known as SB 1172 has failed to get out of committee. Let's hope that failure continues as Virginia while raising taxes and cutting needed public services to close a $2 billion budget gap, Gov. Terry McAuliffe has vowed at the same time to expand corporate welfare for things such as retail development.
Makes sense to me Gov. McAuliffe proving once again there's no fundamental difference on the most important issues between Democrats and Republicans. Virginia government is corruption Incorporated.
Reference Bristol Herald Courier January 29, 2015.
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