Chapter 14: Saving the X Industry: Documentation
Governments intervene to bail out companies. The subsidies go to rich companies, not poor companies.
Consider this article:
Joe Romm, "Over Half of All U.S. Tax Subsidies Go to Four Industries. Guess Which Ones?" (2011). Download here.
Perhaps it's no surprise that the richest industries get the biggest subsidies, starting with finance and Big Energy. That's how the 1% operate.Notably, 56 percent of the total tax subsidies went to just four industries: financial, utilities, tele-communications, and oil, gas & pipelines.
If the study had found anything else, it would have been highly suspect. This is simply Pareto's law in action. Because of this law, we know that about 20% of any group gets about 80% of the profits, subsidies, etc. So, 4% (20% of 20%) get 64% (80% of 80%). This means that 0.8% (20% of 20% of 20%) get 51.2% (80% x 64%). So, 1% should get almost exactly 56%.
It never ceases to amaze me how many news stories report standard Pareto distributions as if this had not been predictable ever since Pareto announced them in 1896.
Here is the point: the justification of the subsidies is to save the X industry. Yet they go to rich industries.
Sam Becker, "The 8 Biggest Corporate Welfare Recipients in America" (2015). Download here.
Niraj Chokshi, "The United States of subsidies: The biggest corporate winners in each state" (2015). Download here.
Travis Irvine, "10 Corporations Receiving Massive Public Subsidies From Taxpayers" (2014). Download here.
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