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Class War For Idiots / March 3, 2011

8.11.08.8945

Why are American taxpayers forced to subsidize the billionaire Koch brothers’ massive campaign contributions to Republican Party politicians, the Tea Party movement, and policies that ensure greater subsidies to the Kochs, while cutting more public services to the taxpayers who fund the Kochs’ business and political activities?

It is an important question, but not one you’ll hear discussed much by our political class. Instead, right-wing pundits whinge endlessly about the public sector union bosses’ evil schemes to shake down taxpayers for union dues that eventually flow towards the Democratic Party. Here, for example, is Michael Barone, American Enterprise Institute resident fellow and senior Moonie political analyst, complaining in the Washington Examiner last week:

Follow the money, Washington reporters like to say. The money in this case comes from taxpayers, present and future, who are the source of every penny of dues paid to public employee unions, who in turn spend much of that money on politics, almost all of it for Democrats. In effect, public employee unions are a mechanism by which every taxpayer is forced to fund the Democratic Party.

Okay, fine, you’re serious about not wanting taxpayer dollars going to finance partisan political campaigns. But before we start talking about public sector unions, let’s test this: if think-tank jockeys like Barone are genuinely concerned with saving taxpayers’ money, would they extend this concern to the fake private sector (i.e.: the publicly-funded private sector)? Would they be in favor of demanding that publicly subsidized billionaires like Charles and David Koch stop funneling money to fund corrupt Republicans and Tea Party campaigns as long as they keep sucking billions in taxpayer subsidies?

Fair is fair, right?

The Kochs could start by giving up the $1 billion their biofuels division is scheduled to receive in 2011 alone. That’s $1 billion in savings from just one of many massive taxpayer subsidies the Kochs profit from. Not only will that help balance the budget, but taxpayers will no longer be forced to watch helplessly as their hard-earned money is used to fund radical right-wing Tea Party Republicans or is spent on causes that deny Americans the same universal health care that every other First World country offers its citizens.

This talk about Koch Industries being a huge beneficiary of taxpayer money might come as a surprise—especially to all the gullible Tea Party libertarians who believe the Kochs actually practice the pure free-market libertarianism that they preach—but as I have been documenting over the past year and a half, the Kochs have a long history of tapping into socialist programs. Starting with their father, Frederick C. Koch, who amassed the family fortune building up Soviet oil infrastructure in the 1930s during Stalin’s first Five Year Plan, the family has been sucking on the big government teat for as long as they’ve been in business, using government subsidies to maximize their own profits, even while funding the libertarian movement and trying to deny government spending on anyone or anything else.

Where else do you think the Kochs got the cash to fund the Tea Party Republican revolution?

Koch Industries’ opaque private corporate business structure makes it difficult to unravel all of its business ventures and to calculate the exact amount of taxpayer money that they receive, but given that the company’s core business operations involve some of the most heavily subsidized industries in America, including oil, ethanol, agribusiness and logging, it is clear that the amount of taxpayer dollars vacuumed up and deposited every year into the personal bank accounts of Charles and David Koch could easily number in the many hundreds of millions and probably goes way up into the billions.

They lease federal land for free for their agribusiness operations, log public forests for private gain and have taxpayers cover the operating costs, and routinely use the government’s power of eminent domain to force landowners to sell land to Koch Industries’ various oil and gas pipeline subsidiaries for pennies on the dollar. (Update: ThinkProgress’ Lee Fang just published a thorough compilation of Koch Industries’ various subsidies here and here.)

Here is the breakdown of the subsidies their biofuels division will receive in 2011:

On top of the $200 million in ethanol subsidies they will receive this year for four ethanol plants the Kochs recently purchased, Koch Industries markets and sells 1/10th of all ethanol produced in the United States. This year ethanol subsidies are expected to top the $6 billion paid out in 2010, which means that the Kochs will tap at least $600 million in additional taxpayer money in 2011.

But that’s not all, folks. Turns out, Koch Industries has also been one of the biggest blenders of biodiesel fuel, which is subsidized at $1 per gallon, double the rate of regular ethanol. It’s not clear how many gallons of biodiesel Koch Industries blends, but given the size of its ethanol operation and the fact that it is one of the largest biodiesel blenders in the country, the amount of amount of subsidies they receive could easily measure in the hundreds of millions. (The US Postal Service used over 1 million gallons of biodiesel in 2005.) So scratching the surface of just one of the Kochs’ core businesses reveals an annual subsidy of at least $1 billion.

Over the years, the Kochs have funded lobbyists, bought politicians, and bankrolled propaganda campaigns with a single aim: to enrich themselves and screw the American people. They’ve fought financial regulation, health care reform, the estate tax and class action lawsuits; boosted the privatization of public assets; and spent more than any other company, including giants like Exxon-Mobile and BP, to stop the regulation of the oil industry. Greenpeace estimated that the Kochs funneled “$24.9 million in funding to organizations of the ‘climate denial machine’” from 2005 to 2008.

This is important and worth repeating: The Kochs are using public money to elect politicians who will give the Kochs even more access to public money, while ensuring that the rest of us get less and less. That’s the whole point of them funding the libertarian ideology.

There’s a great graphic showing this process at work in Wisconsin, charting how the millions of dollars of Koch money that poured into the state to elect Scott Walker and other Koch-funded Republicans has led directly to the cutting of benefits for government employees and the Kochs getting access to state-owned energy infrastructure—which has apparently been the Kochs’ longtime goal. Unfortunately,  the flow chart left out one crucial step: that taxpayers are the initial source of Koch money, which would make the chart circular instead of linear.

taxpayer money koch

You can see it on the federal level, too. Just a few weeks ago, Koch-funded House Republicans stepped up efforts to achieve longtime Koch goal to shut down the Environmental Protection Agency by passing an amendment that would defund an EPA program monitoring industrial greenhouse gas emissions. While the move is clearly against the wishes of the American people, a majority of whom support the EPA regardless of political affiliation, it will be an amazing victory for the Koch family.

As owners of one of America’s biggest, most chronic polluters, the Kochs have been fighting the EPA ever since Richard Nixon signed it into law 40 years ago. After being repeatedly slapped with record environmental fines for the toxic spills, deadly explosions and various other large-scale pollution disasters coming out of Koch Industries’ oil refineries and petrochemical plants, as well as the company’s vast network of oil, natural gas and ammonia hydrate pipelines, Charles and David Koch can rest easy. There is a very good chance that soon those pesky fines will be a thing of the past, and they’ll be free to blow up houses and kids, and dump toxic waste into our drinking water without fear of repercussions—all of it thanks to generous contributions from taxpayers like you and me.

But perhaps the biggest beneficiary of our tax dollars has been the vast network of Koch-funded libertarian and free-market advocacy groups, who have received tens of millions of dollars over the past two decades from a few Koch family foundations. Here’s a small sample:

*Americans For Prosperity, the organization that played a central role in orchestrating the first AstroTurf push for the Tea Party movement, got over $5 million from Koch foundations.

*Cato Institute, the libertarian think tank first opened up by Charles Koch in 1977, got nearly $15 million from just two Koch foundations.

*Mercatus Center got $9 million in the span of four years from the same sources.

*Reason Foundation, which is where Reason Magazine gets its operating cash, got over $2 million.

That’s a whole lot of money for organizations pushing for libertarians, especially when you consider that much of it came directly from taxpayers.

So remember, the next time you hear Tyler Cowen, Radley Balko, Will Wilkinson or some other Koch shill talking about the need for privatization, smaller government or how public sector unions are ripping off taxpayers, remember: they are all taxpayer-welfare queens, living pretty on cradle-to-grave taxpayer-funded Koch socialism, and they get to keep sucking that taxpayer-funded Koch teat so long as they preach to the rest of us the ideas of free markets, austerity and privatizing everything public to their Koch masters.

Final note: Corporate propagandists like to make big fuss about how campaign contributions made by public sector unions overshadow anything you see from the private sector, but it just ain’t so. Union spending pales in comparison with the amount of taxpayer-subsidized billionaire money that sloshes around in political campaigns. In his February 22 article, “Public unions force taxpayers to fund Democrats,” Michael Barone tries to scare his readers with big public union numbers, noting that the AFSCME (American Federation of State County and Municipal Employees) spent $90 million in the 2010 election cycle.  It sure does look impressive, but let’s do the math and compare it with Kochs’ spending.

AFSCME’s political spending looks big until you realize that the money is being used on behalf of its 1.6 million members. When you factor that into the equation,  AFSCME’s spending gets reduced to a per capita amount of just $56.25 per union member. That’s not simply modest, it’s downright meager, especially compared with the Koch brothers’ per person spending.

It’s hard to calculate the total amount of cash the Kochs poured into the last election cycle, but adding  just a few of the known  expenditures is enough to show just how much political power the two brothers have. Even if the Kochs only spent $5 million on pro-Walker campaign ads in Wisconsin and $1 million on ads in California to repeal state pollution laws, their per-capita campaign contributions would be $3 million per person. And this six mil spent on political attack ads is just a tiny fraction of what the Kochs and their various PACs, foundations, political organizations and front groups spent in 2010. Just one Koch-funded group, Americans for Prosperity, bragged about spending around $40 million dollars on the 2010 election. There are at least a half-dozen other well funded organizations just like it that pitched in.

One man, one vote. One billionaire, one billion votes. That’s the kind of liberty the Kochs are for.

***

Yasha Levine is an editor of The eXiled. Levine and co-editor Mark Ames first broke the connection between the Tea Party and the billionaire Koch brothers in Playboy.com in February 2009, sparking lawsuit threats, and causing CNBC’s Rick Santelli to publicly distance himself from the Tea Party movement and cancel his Daily Show appearance.

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31 Comments

Add your own

  • 1. DtD  |  March 3rd, 2011 at 1:21 am

    Jesus fucking christ. . .keep up the good work boys.

  • 2. maha  |  March 3rd, 2011 at 1:46 am

    The eXiled is very lively today. It’s kind of thrilling.

  • 3. Duarte Guerreiro  |  March 3rd, 2011 at 2:52 am

    Yasha you big nerd. Keep it up!

  • 4. zaza  |  March 3rd, 2011 at 7:39 am

    The government mandates refining businesses to be in the ethanol business. Do you understand that? MANDATED! If they are FORCED through mandates to produce something, why should they NOT take the subsidy?

    Paid for the Koch Troll Campaign. “I’m Charles Koch, and I approve of this lackey’s comment. Although I should tell him that no matter how much he sucks up to me and shills for me, if he tries coming within a mile of my estate, I’ll have him sodomized with a cattle-prod. I can do that, you know.”

  • 5. zaza  |  March 3rd, 2011 at 7:47 am

    “(Open to all. Comments can and will be censored at whim and without warning.)”

    I expect my knowledgeable comment will disappear withing minutes because I doubt that you want the whole story told.

    Your anger is aimed in the wrong direction. It should be aimed at the government.

  • 6. Don  |  March 3rd, 2011 at 9:44 am

    How do you s’pose the mandates were enacted zaza?

  • 7. Victorvalley Villain  |  March 3rd, 2011 at 10:21 am

    State or capital, oligarchy is oligarchy.

  • 8. az  |  March 3rd, 2011 at 11:13 am

    This is just because people are angry all of the time.

  • 9. Strelnikov  |  March 4th, 2011 at 1:08 pm

    Monty Burns: Smithers, have the Koch brothers killed.

  • 10. Ramona  |  March 4th, 2011 at 1:44 pm

    My name is Kochsucker Walker and I approved this message.

  • 11. *duh*  |  March 4th, 2011 at 7:59 pm

    RE: zaza

    Ahhhhh, I see the Amurhican equivalent to the the 50-cent party is alive and well here in the Exiled comments. I am seeing quite the increase in obvious oligarchical shills on comment forums around the intertubes.

    http://en.wikipedia.org/wiki/50_Cent_Party

    Wonder who is funding them? hmmmmmm

  • 12. brian  |  March 5th, 2011 at 8:00 am

    why does democracy has it so hard?
    from Naked Capitalism

    “BlackRock is the largest global investment management firm headquartered in New York City. It is one of the most prominent financial institutions in the US. The company acquired Barclays Global Investors in December 2009 under the BlackRock name, making it the largest money manager in the world.

    But BlackRock isn’t just the largest money manager … it is also the larges asset manager in the world.

    As Wikipeda notes:

    As of December 31, 2010, BlackRock’s assets under management total $3.56 trillion across equity, fixed income, alternative investments, real estate, risk management, and advisory strategies. Through BlackRock Solutions, it offers risk management, strategic advisory, and enterprise investment system services to a broad base of clients with portfolios totaling approximately $9 trillion.

    And see this and this.

    So it is stunning that Blackrock’s Chairman and CEO – Larry Fink – said on Bloomberg TV:

    Markets like totalitarian governments.

    Investors can determine whether a nation prospers or starves.

    Investors can determine the course of nations, including who gets elected and who gets the boot.

    No wonder there are so many totalitarian governments in the Middle East, North Africa and around the world.

    No wonder totalitarianism has been creeping into America’s politics and economics. See this and this.

    Because big investors (or at least big asset managers) like totalitarian governments. If they instead preferred democracy, democracy would flourish.”

  • 13. ifthethunderdontgetya™³²®©  |  March 5th, 2011 at 9:31 am

    Ethanol mandates are the product of this country’s powerful corporate farmers.

    Hardly an excuse an argument for the “1$, 1 vote” government that the Kochs, the rest of the plutocrats, and their witlesss minions favor, zaza
    ~

  • 14. unger  |  March 5th, 2011 at 1:17 pm

    While the kochsuckers and randroids deserve all the abuse anyone can heap upon them, I must say that the eXiled has not done a very good job lately of noting that the choice is not necessarily between governments or corporations: that one can despise both equally as two sides of the same mass-enslaving coin, and that what the Kochs call ‘libertarianism’ is almost diametrically opposed to the historical meaning of the term, as well as to at least half of what calls itself ‘libertarian’ today. Or if the term ‘oligarchical shill’ applies to someone who wants the assets of the Kochtopus, Goldman Sachs, the rest of the interstate banks, the oil companies, Wal-Mart, etc., etc. – the whole list of national and transnational corporations, dismembered and distributed to the people they’ve robbed or had the government rob for them, but doubts that voting for Democrat multimillionaires instead of Republican multimillionaires will make it happen, then the non-libertarian Left has finally turned into an insular circlejerk to match the AM talk radio scene. Perhaps a reality check is due?

  • 15. Arch Stanton  |  March 5th, 2011 at 3:48 pm

    I hope those scum sucking bags of fascist maggot puke enjoy my money for the present, because this is one cash spigot that’s getting ready to turn itself off.

  • 16. boson  |  March 5th, 2011 at 4:14 pm

    Trouble is Koch also funds some cool things, like cancer research at MIT. a brand new research center’s been just opened:
    http://www.genengnews.com/industry-updates/koch-institute-for-integrative-cancer-research-dedicated-today/110833224/

  • 17. ieatshills  |  March 6th, 2011 at 10:32 pm

    @boson:

    Koch Industries pollutes our environment with carcinogens, then donates a little spare change to cancer research. Swell guys!
    http://en.wikipedia.org/wiki/Koch_Industries#Environmental_and_safety_record

  • 18. zaza  |  March 7th, 2011 at 7:45 am

    Nice job improving my first comment. LOL

  • 19. zaza  |  March 7th, 2011 at 7:50 am

    Yes, yes, yes……..Government? All good. Corporations? Pure evil.

    Now I get it! LOL

  • 20. Rob  |  March 7th, 2011 at 2:41 pm

    zaza^ is a barnacle from the ‘yahoo answers’ political forum. if zaza is getting paid for these lame responses, someone is getting fleeced bigtime.

  • 21. woody  |  March 7th, 2011 at 5:59 pm

    The Kochs are paying trolls like me to plant false flags on blogs, telling people that the Kochs are connected to Nazis and Jews. Seee, check it out: The real litmus test for any Koch internet blog is if they can name the jew. Koch brothers seem to be jewish, but look at this list.
    http://www.jewwatch.com/jew-leaders-list-of-jewish-millionaires.html

    The jewish Koch’s are way down on the list of various money interests that are paying for access to American style democracy. So they are bad, not as bad as other Jews. So that does not make them bad at all. Progressive politics exist because of money interests of the oligarchs. Freemarket policies help the average Joe. Woodrow Wilson was a progressive. Let’s see, Federal Reserve, 16th amendment, Prohibition, womens right to vote. Ok, the Ku Klux Klan also wanted women to vote, but let’s not go there. Let’s try to keep it simple for the simpletons from the left side of the spectrum. If Koch is the best you can come up with, then I need to spend some time doing Coke like the Adonis Warlock, and I’ll continue winning micro payments from the Kochs.

  • 22. woody  |  March 7th, 2011 at 7:25 pm

    woot woot, shill edit. This troll is WINNING.

  • 23. NoPast  |  March 8th, 2011 at 8:39 pm

    and that what the Kochs call ‘libertarianism’ is almost diametrically opposed to the historical meaning of the term, as well as to at least half of what calls itself ‘libertarian’ today.
    ———————————————-

    Exactly …those fuckers and their movement of corporate shrills/randroids/social-darwinist have hjacked both classical liberalism(hint: americans libertarians AREN’T classical liberal by a long shot) and historical libertarianism(traditionally a socialist movement)
    these scum are the lowest rank of human being

  • 24. PDUB  |  March 12th, 2011 at 9:37 pm

    I’m a cyber-libertarian New Media Solutions sockpuppet for billionaire Kochs. I usually troll comment sections of cyber-statist websites like these and post various Koch approved messages. I also get really really mad when my cyber-freedom of speech rights are violated. I say: “Hey, maaan! I did not sign a contract allowing you to violate my cyber-speech rights. It’s not fair. You statists have a monopoly on cyber-force. Waaah! Waaah! This website is in cyber web, man! It should be cyber-privatized, man! And not defined by arbitrary cyber-borders.”

  • 25. Hammond Organism  |  March 18th, 2011 at 12:25 pm

    If you want to end government subsidies, end the fucking government.

    What dumb asses. Statists are not very bright.

    Rooooooooooooooooooaaaaaaaaaaaadzzzzzzzzzzzzzzzzzz.

  • 26. Hammond Organism  |  March 18th, 2011 at 12:55 pm

    [Notice: My name is Charles Koch and I approve this message. This troll has been paid for by Charles G. Koch Charitable Foundation.]

    @ Brian

    RE: BlackRock

    DUH! If you look at the top shareholders of the big corporations, you will find that most, id not all, are asset management companies, like BlackRock, Fidelity, Morgan Stanley, JP Morgan Asset Management Holdings, etc. Here’s an example, Apple (AAPL):

    http://www.zerohedge.com/sites/default/files/images/user5/imageroot/shirakawa/AAPL%20top%20150.jpg

    This is indicative of most corporations, these days.

    Here’s how and why. Companies like BlackRock manage pension funds, 401(k)s, and charitable funds. If you have a 401(k), it is probably being managed by one of these companies. The asset management company takes people’s money, and invests it for them. They buy a basket of stocks and make a “mutual fund” which is actively managed, or create an “exchange traded fund” (ETF) and sell shares of the ETF. The investor does not own any of the stocks that make up the “fund”, directly. The asset management company retains all ownership rights of the stocks. The investor gets the dividends of the stocks, but no ownership rights of the corporation. A large percentage of Americans are being fucked out of their ownership rights, and don’t even realize it, because they are too fucking lazy to try to understand it. ETFs and mutual funds are for suckers. And now, you know why. The banks own the asset management companies, the asset management companies own the corporations, and the banks own the Federal Reserve. If you really want to end the Oligarchy, end the ability for the banks to recklessly print money, at whim, and manipulate the markets. End The [Fucking] Fed, and stop blaming Teh Corporashuns.

    You guys should really spend some time at zerohedge, and learn how the banks are really fucking over everybody. Just watch out for the goldbugs.

    You want a “boogieman? Forget about the Kochs. Go after Blythe Masters. You want more regulation in the banking industry? First, tell me why the SEC dropped its investigation into the accounting control fraud perpetrated by Lehman execs, including Dick Fuld, on the repo 105s. You can have all the fucking regulations in the world, but if you are not going to put assholes like Dick Fuld in prison with Jeffrey Skilling, you’re just pissing in the wind, and the banks are laughing all the way to the White House.

    You boys could learn a few things from “libertarians”.

    http://www.zerohedge.com/article/repo-105-scam-how-lehman-fooled-everyone-including-allegedly-dick-fuld-and-how-other-banks-a

    [Notice: My name is Charles Koch and I approve this message. This troll has been paid for by Charles G. Koch Charitable Foundation.]

  • 27. e  |  December 1st, 2011 at 5:54 am

    Its a tax credit that’s mandated to bring in the blending of biofuels to the market, otherwise they cannot compete with big oil. Build a biodiesel plant if you want to capture them too.
    This is pure malarkey… go look at something that’s real instead of your mindless bashing of someone making a buck. Again… its a tax credit, they just pay less in taxes.

  • 28. George  |  December 5th, 2011 at 12:24 pm

    Hey Yasha, when am I going to stop sucking up to Charles Koch and his minions? I don’t think so…I like the taste of his crack

  • 29. Russell  |  March 12th, 2012 at 9:14 am

    This is my first, and probably last, visit to reality, which my little pea-brain can’t handle. Goodbye, I’m going back to my sad little fantasy land. You know what they say about Republicans: “There are only two kinds of Republicans: Millionaires and suckers.” Guess which one I am?

  • 30. Russell  |  March 12th, 2012 at 6:41 pm

    Thanks for “corrections” to my retarded post, my proto-fascist point. I’m a Republican. But I’m a proud scummy little why. I like the countryside too.

  • 31. fitness water  |  September 12th, 2012 at 9:10 am

    Thanks for continuing to be the strongest voice against the kochs.

    @23. Have you not read the exiled much? Libertarianism has been a plute funded fake ideology for at least 100 years. Once you know that, all of its silly contradictions make much more sense


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