Stupider Than Government Subsidies? Importing Government Subsidies

Published April 7, 2017

Political rookie Donald Trump won the White House in large part by running against just how stupid Washington, D.C. is.  And DC stupidity is certainly a rich vein to mine.

P.T. Barnum once said: “No man ever went broke overestimating the ignorance of the American public.”  Trump bet on a paraphrase: “No one ever went broke overestimating the stupidity of government” – and won huge.

Because no matter how ignorant government schools intentionally render the American public – the American public can never be dumbed down enough to get down to government’s level.  Trump inherently understood this.

DC is $4-trillion-a-year worth of stupid.  And we spend a lot of that money – stupidly subsidizing domestic cronies.  Not picking winners and losers – so much as picking losers at the expense of winners.  Taking, for instance, money from real energy companies like oil and gas – and giving it to fake energy companies like wind and solar.

But what’s worse – and more politically craven – than that?  Importing government subsidies from other countries.  Your government doesn’t spend the money – theirs do.  Thereby you duck the political price for the spending.

And just like with domestic subsidies, you get to disingenuously claim you’re lowering prices.  When what you’re actually doing is using different governments’ money – rather than ours – to in identical fashion warp and damage the marketplace.  First and foremost – your domestic marketplace.  Even worse than with domestic subsidies.

With domestic subsidies, at least the recipients benefit – while everyone else is damaged.  With imported subsidies – every single domestic company is damaged.  The more subsidies you import – the more damage you do to every domestic company.

Opening the international floodgates to a panoply of foreign government subsidies – will drown our entire domestic economy.  That is titanically stupid policy – and it ain’t anything anywhere close to free trade.

To wit: The international airline industry.  Which could be considered a fairly free market – were it not warped by massive subsidies from two Middle Eastern countries: Qatar and the United Arab Emirates (UAE).  Who have since 2004 subsidized three airlines – Qatar Airways, Etihad Airways and Emirates – to the tune of $42 billion.

That’s $42 billion these three airlines, amongst other things, can and have used to lower their fares – providing a massive, massively unfair advantage over their competitors.  Our domestic airlines – haven’t fared well (please pardon the pun).

Rarely do I side with unions – but when they’re right, they’re right: “Delta Air Lines, United Airlines, American Airlines and its unions sent an open letter March 16 to Trump asking him to enforce Open Skies agreements with the United Arab Emirates (U.A.E.) and Qatar.”

What are the Open Skies agreements?: “The United States has 120 Open Skies agreements with countries from around the world. The agreements are meant to expand international passenger and cargo flights to and from the United States.”

That’s great – except the Qatar-UAE subsidy avalanche violates them.  And warps the marketplace – as subsidies always do: “The U.S. legacy carriers argue that while they must react to supply and demand when deciding its routes, the Middle Eastern carriers are not beholden to market forces and can simply dip into an unlimited pool of government subsidies when determining where to set up routes for its airlines.”

And by warping the marketplace – the foreign subsidies are eviscerating our domestic companies.  As foreign subsides always do: “‘1.2 million American jobs are at risk because foreign subsidies are undermining the US aviation industry,’ (said) Andrea Newman, Senior Vice President at Delta Air Lines.…’We are asking President Trump to enforce the Open Skies agreements between the U.S. and the U.A.E. and the U.S. and Qatar in order to protect American jobs and stand up to trade cheating….'”

And let’s throw a little misdirection into the mix: “(T)he U.S. Travel Association (brought) industry professionals to Washington, D.C., for their annual meeting. But they won’t be speaking for the whole travel industry because, frankly, they’re missing some key players. U.S. Travel doesn’t represent a single major U.S. airline….”

Get that?  The “U.S. Travel Association” – doesn’t associate with a single major U.S. airline.  That’s a U.S. association that seems…disassociated with the U.S.  Especially so – as they were in DC defending the importation of Qatar-UAE subsidies.

Why on Earth would “The U.S. Travel Association” do this?: “When you look at U.S. Travel’s funders, at the highest sponsorship level, the Chairman’s Circle, there are two airlines listed – Emirates and Etihad.”

Oh.  The two airlines most invested in “The U.S. Travel Association” – aren’t in the U.S.  And are two of the three recipients of massive foreign government subsidies – that are being imported into the U.S. and crushing actual U.S. airlines.

Again, the good news is that these massive foreign government subsidies – violate existing Open Skies agreements.  So the DC Stupid has been – we’ve been allowing them to continue, rather than enforcing said agreements and stopping them.

Presenting now-President Trump with an opportunity to end some serious DC Stupid.  By simply enforcing these existing agreements – and ending this market-warping, domestic-industry-crushing importation of foreign government subsidies.

A whole lot of voters – who, you know, want a domestic economy – will be exceedingly grateful.

[Originally Published at RedState]