With Corporate Welfare, There’s No ‘Trickle Down’

Main St. Agenda by from Real Clear Markets, July 7, 2014

Advocates of corporate welfare often claim that when governments privilege a handful of firms, the rest of the economy somehow benefits. This is how the Bush administration sold the bank bailouts. It’s how the current administration sold the auto bailouts. And it’s how the U.S. Chamber of Commerce is trying to sell the Export-Import Bank.

Mounting evidence, however, suggests the opposite is true: economies whose firms sink or swim based on political patronage grow slower and are less stable than those in which firm success depends on an ability to meet the market test.

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