Commonwealth Journal

Columns

January 18, 2012

Taxpayer Subsidies

— An article I read in the newspaper stated that the Kentucky Supreme Court had reached a verdict in a split decision that would make applicants for Black Lung benefits have to meet the same criteria for benefits for similar lung diseases from a different causative agent. Pneumoconiosis is the disease and it can be caused by inhaling dust from any source so the qualifications for benefits for this disease should be the same across the board and not be different just because sufferers of Black Lung get it from coal dust. However, written standards have made qualification for benefits for Pneumoconiosis resulting from coal dust more difficult. This is unfair and discriminatory and it seems the court reached an equitable decision that will result in many more miners being eligible for taxpayer funded benefits.

However, Black Lung is not what I want to talk about here. What I want to talk about is allowing industry to operate without bearing the true cost of its operation. In this case the coal industry is able to produce the black rock without bearing the costs of its production, in this case benefits for black lung. Neither do they have to bear the costs of polluted streams, loss of habitat, disease resulting from air pollution and mercury pollution. Instead, these costs are covered downstream by the taxpayer in a system that can be referred to as Socialism for Industry. Rather than the industry covering the cost the cost is spread around to the taxpayers as a whole while the industry pockets the money it would have had to put out. Of course, if industry had to cover the cost up front then the production costs would rise and the cost of the product to the consumer would go up.

Consider this. If power generating companies had to pay the higher cost for their fuel would electricity be as cheap? Would Kentucky still have the cheapest electrical rates in the nation and would the nation still be using the black rock as a cheap source of energy? Or would coal be one of the most expensive fuels one could use to keep the lights on? The same can be said for most other forms of energy production. What if oil producers had to cover the cost of air pollution and the atmospheric projections of the costs of rising oceans due to climate change? What if they had to cover the costs of capturing the excess carbon dioxide that creates this problem?

The same goes for nuclear. What if the nuclear electrical production facilities had to cover the cost of safe and effective disposal of nuclear waste? Would nuclear still be attractive as a “clean and non-polluting” source of energy? Ask the Japanese people.

There are a lot of people for whom socialism is a dirty word. They do not consider the problem deeply enough. All they see is government establishing regulation, taxation and government programs. They do not consider that taxpayer subsidization of energy production is socialism at its purest and that it is not the public that receives the benefit. It is the huge energy production industry and their shareholders that receive the taxpayers money. In short, the coal, oil and nuclear industries enjoy the lack of responsibility for their product while the taxpayer covers the downside.

Now, what about this? If the energy production industries had to cover the downside costs of their operation how then would clean energy stack up cost wise? Solar is already economically competitive in some areas as is wind energy. Would they be more competitive if we did not subsidize the other forms of production and would the impact on our environment be as devastating.

Corporate Socialism exists in many industries. Witness the recent government subsidization of the banking industry to avert financial collapse. Now the banks are fighting against regulation that would make them provide for resources to cover the costs if that occurred again. What about the tobacco industry. Tobacco remains the only legal product that, when used as directed, will kill you. It results in billions of dollars of costs to the taxpayer in the form of medical care each year. If they had to cover the cost of that medical care would they still be profitable?

Socialism exists everywhere. What about our military that is used to keep our access to cheap energy sources open? What about the farm subsidies?

I want you to understand. Socialism is not bad in and of itself. It can be a useful and equalizing tool when it is used for the benefit of the people as a whole. However, it can be discriminatory and a burden to the public if used to benefit special interests and corporations. Generally, if socialism can be used to benefit the public by using taxpayer funds then it is useful, otherwise it is not.

My take on socialism. Give it some thought.  After thinking about it, drop me a line.

rmoore@somerset-kentucky.com

www.rfmoore.blogspot.com

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