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As Oil Companies Announce $24B in Profits, Rep. Stearns Says, “When Somebody Is Successful Then You Give Them Subsidies”

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"As Oil Companies Announce $24B in Profits, Rep. Stearns Says, “When Somebody Is Successful Then You Give Them Subsidies”"

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Rep. Cliff Stearns (R-FL) works his voodoo magic on energy subsidies.

So far this week, four of the world’s top five oil companies have announced more than $24 billion in third quarter profits. And by the logic of Florida Congressman Cliff Stearns, that should mean those oil companies deserve more subsidies, not less.

Speaking at a town hall meeting last weekend in his home state of Florida, Stearns displayed a very sketchy grasp on how subsidies should work, explaining to Climate Progress that incentives should be given to mature companies, not early-stage companies.

“When somebody is successful, then you give them the subsidies and the tax credit,” explained Stearns, talking to Climate Progress.  In short, the rich get richer.  This is how the 1% operate. No wonder income inequality is growing in this country.

Stearns has backed that up with hearty government rewards to the most profitable, successful companies on the planet — voting multiple times to continue billions in tax breaks to oil companies while voting against shifting those incentives to the nascent clean energy industry.

As Chairman of one of the House subcommittees investigating the Solyndra loan, Stearns has railed against government loan guarantees, saying they “pick winners and losers.” But when talking to Climate Progress about the topic of loan guarantees, Stearns completely misunderstood how the policy works, saying it’s “where the government gives you money outright.”

In fact, a loan guarantee is exactly the opposite. It is simply an agreement with private lenders that the government will back a loan in case of default. The government is not actually giving any money outright — it only provides federal funds through a loan guarantee in a worst-case scenario. In order to qualify for the program, recipients must prove that they’ve raised adequate private capital. And in the case of power-plant developments, companies must have a long-term agreement to sell the energy.

To round out his mind-bending logic on subsidies, Stearns calls for more federal support of nuclear, an industry he admits has gotten “a huge amount of subsidies.” However, no nuclear power plants have been built in the U.S. in more than 30 years — and none would likely get built in this country without government-backed insurance and loan guarantees.

Watch the video:

A loan guarantee is where the government gives you money outright —they print out the money and give it to you— before you’ve even manufactured. Before you even start. Where as the subsidies are provided as incentives. You have to go out and take the risk as an energy company and drill and if you do well then you get the subsidies and you get the tax credits.

So what I’m trying to do is say, the government should not be picking winners and losers, let the private sector determine the winners and losers, and then…when somebody is successful, then you give them the subsidies and the tax credit.

For example, some of the money that’s been given to the nuclear business — there’s a huge amount of subsidies to help build nuclear. Well, nuclear has been proven and nuclear is not competing with China, it’s for electricity here in this country. So that would be a better investment than trying to sell solar panels throughout the world when we’re trying to compete with China. Where as with nuclear, we’re building just for us.

Putting aside the fact that new solar PV plants can be cheaper than new nuclear plants, Stearns seems to think that nuclear is a domestic industry. Actually, most of the equipment manufactured for power plants would be coming from international companies — in some cases financed by national governments.

Stearns’ stance on government involvement is one long series of contradictions that inherently favors subsidies for oil, gas and nuclear, while disadvantaging renewables. That’s something to keep in mind during the Solyndra investigation, as he continues to rail against government investments in clean energy.

Thanks to Tyce Herrman, who contributed to this story.

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33 Responses to As Oil Companies Announce $24B in Profits, Rep. Stearns Says, “When Somebody Is Successful Then You Give Them Subsidies”

  1. John McCormick says:

    Stearns likely earned a big check from the richest industry on the planet. The IRS should look carefully at his 2011 tax return to see if he declared the oil-drenched contribution as income.

    • Mulga Mumblebrain says:

      That’s the true definition of ‘winners (those who serve our Masters loyally) and ‘losers’ (the rabble). Great system, impervious to change. Sit out the peaceful protesters until they grow bored or need to earn a crust, or let the droogs have some fun cracking skulls. Keep up the MSM vilification (‘Communists’, ‘socialists’, ‘anti-semites’, ‘hippies’, ‘drop-outs’ etc)and keep funding the Tea Party Mad Hatters who really see Obama as a ‘socialist’. Such stupidity with a vote is a priceless asset for the Bosses. They cannot lose, until near the end, by which time it will be way, way, too late.

  2. Jim White says:

    I have the joy of living in this maroon’s district. His stupidity never ceases to amaze.

  3. M Tucker says:

    If the House does not want to vote for funds to help disaster victims or if the House will not extend unemployment benefits because the US does not have the finances and we cannot go further into debt, then I say no more handouts to the wealthiest and most successful fat-cats in America.

    “When somebody is successful, then you give them the subsidies and the tax credit,” That is the most ridiculous, asinine and absurd statements I have ever heard but it is clear evidence of Republican philosophy and exactly why America can no longer afford such despicable creatures to govern our nation.

  4. Vesus says:

    Welcome to American capitalism. Subsidize the rich, f**k the poor.

    • Mulga Mumblebrain says:

      The definition of ‘trickle-down’, that fable beloved of the kleptocrats and their paid liars, is when the rich micturate on the rest. Don’t forget to show appropriate gratitude for this rare gift.

  5. Jeff Huggins says:

    Regarding The Oil Companies

    Hhhhmmmm.

    First of all, as I’ve mentioned in a couple recent comments, it would be very helpful for “the American people” to understand how much of the business of our main U.S.-headquartered oil companies (ExxonMobil, Chevron, and ConocoPhillips) is actually in the U.S. rather than in various diverse parts of the rest of the world. Most people, of course, understand that most of the oil comes from elsewhere. But very few seem to understand that these companies, by nearly all measures, are more outside the U.S. than in it. Check out ExxonMobil. The substantial majority of their reserves, revenues, income, capital employed, net assets, and so forth are outside the U.S. People tend to think of ExxonMobil as a good ‘ole American company — well, perhaps not good, but still predominantly an American company — without realizing that most of its business is not in the U.S. ExxonMobil is headquartered in Texas, is incorporated in New Jersey (I believe), and has most of its assets and does most of its business outside the U.S.

    Indeed, it is really a “U.S.-licensed” and “U.S.-permitted” monstrosity for activities throughout the world that strip away non-renewable resources and generate well over a trillion pounds of CO2, per year, into the atmosphere.

    On another note, we should note what these folks say, or would say, based upon a careful reading of their writings: John Locke, John Stuart Mill, and even Milton Friedman. The sooner we note this, the better — for our own good. What would they say?

    Well, if scientists are correct about climate change, and if climate change will cause harms and damages to peoples of other countries, then they (John Locke, John Stuart Mill, and even Milton Friedman) would say this: We in the U.S. should be prepared to — and should — compensate those other countries for the damages that our actions create. That is already the case, if damages have already been created, but it’s certainly the case if we continue to emit levels of CO2 that we understand will cause damages in the future. This is no joke, nor is it merely a theoretical matter.

    Why is it not merely a theoretical matter? For a number of reasons. Just one of them is this: People who are harmed by the damages associated with climate change will think themselves justified — and indeed WILL BE JUSTIFIED — to demand compensation from us, or to insist that we stop causing the problem (and use forceful means to get us to stop if we don’t), or both. And what or who will justify them in this view? Well, among others, the very same thought-leaders, reasoning, arguments, and historic works that we ourselves have used, and continue to use, to justify things that we do. Read John Locke’s ‘The Second Treatise of Government’. Read John Stuart Mills’ ‘On Liberty’. Even read Milton Friedman’s ‘Capitalism and Freedom’, in particular the section involving “neighborhood effects”. If, because of climate change and the associated rise in sea levels, some island nations will lose their very land, homes, and existences, those island nations (and their peoples) would be justified to demand full compensation from us, and they’d also be justified to try anything possible in order to stop us from causing that much damage in the first place. This is no joke. Read the books.

    This money that ExxonMobil, Chevron, and ConocoPhillips are collecting, and sending to their shareholders, is IN TRUTH already owed to somebody else. The philosophical-ethical community should be shouting this news from the rooftops in order to get us to change our direction. Indeed, the defense community should be shouting this news from the rooftops. After all, who is going to defend “U.S. interests” overseas when some countries and peoples start to demand compensation from the U.S. or take it upon themselves to take it? (Not me, if the demands of those people are just, and especially if we’ve failed to do anything to responsibly reduce our emissions.)

    If our continuing emissions bring about climate changes that ultimately cause the flooding-out of island nations, and the flooding of major cities, and famines and other such things, we in the U.S. will not only have that “blood” on our hands, but the peoples of those nations will begin to use our own historic sources of reasoning and justification against us — Locke, Jefferson, Mill, and even Friedman. What will we say then? Blah, blah, blah, blah. “We didn’t know.”

    Here are folks who are failing: the oil company leaders, our government, the media, and (yes) the philosophical community, and (yes) the universities, and (yes) the environmental organizations, and (yes) the blogs.

    We are way, way, way past the point when we should be noting with concerned amusement that the oil companies make boatloads of money. We should be on a substantially different path by now, and we should have taken action years ago. I’m sorry, but this is ridiculous, and we should all be ashamed of where we are and what we’re doing as a country. It needn’t be this way, and shouldn’t, but our choices determine and reflect who we are, and they haven’t been lookin’ good recently.

    Sigh,

    Jeff

    • Tim says:

      Considering that the United States has over the past twenty years been involved a couple of very expensive wars in countries from which Exxon-Mobile’s prime commodity originates, I’ve got the feeling that discussion of what others would “be justified in demanding” are beside the point. When the country from which your are “justifiably demanding” compensation spends more on “defense” than he next thirty nations combined, you should sooner or later simply acknowledge the facts: ethicists have nothing to say about our policies! It’s ridiculous, it’s disgusting, but it is just the truth.

      • Jeff Huggins says:

        Hi Tim, thanks for your comment. I agree with you partly but not entirely. In other words, I agree that the U.S. apparently doesn’t take ethics into account in setting policy, or at least a great deal of policy, and at least not very well. And I agree that that’s a huge problem and a shame. But just because the U.S. doesn’t take ethical considerations into account — at least not well — doesn’t mean that they vanish and don’t have any major practical consequence. The U.S. population is only 350 million (off the top of my head; I don’t have the actual number in front of me) while the world’s population is about 7 billion. Only one in twenty people live in the U.S. Nineteen of twenty live elsewhere. Ultimately no practical amount of “defense” and defense spending can protect us if some substantial portion of those other nineteen (or even a fairly modest portion) decide that they’re justified in doing something against us — either taking assets, or violence, or whatever — to push us to do the emissions reductions we ought to do, or to punish us for not doing them, and/or to recover damages to themselves caused by climate change. So, whether we like it or not, and whether we wisely take ethical considerations into account in setting our policies or not, ultimately the role of justifications — or perceived justifications, even if they’re loose — is huge. To the degree that other peoples come to the point where they feel a need to take action against us, and where we’ve left them no other choice, and where they feel deeply justified in doing so, well, that’s not good for us. And as I say, no amount of defense can prevent major harms against us, ultimately, in a world in which our population is only one of twenty. I assume — or hope — that leaders in the military, at least some of them, understand this. In any case, our governmental leaders should understand this, or at least anyone that deserves being elected. Ultimately, the sooner that we DO become ethical in our actions — in a full and genuine sense — the better off we’ll be, and the safer we’ll be, in the long run.

        Cheers for now, and Be Well,

        Jeff

  6. Paul Magnus says:

    Lovelocks migration north begins?

    Facebook Plans Data Center in Sweden
    http://online.wsj.com/article/SB10001424052970203554104577002000543513954.html

    Facebook plans to build a new server farm on the edge of the Arctic Circle—its first outside the U.S.

  7. Raul M. says:

    Those people who attended the town hall paid to hear that? He forgot to bring his consence?

  8. Raul M. says:

    Conscience.

    • Mulga Mumblebrain says:

      He would need to find it first. This type conveniently ‘misplace’ or anaesthetise their consciences when they first take the kleptocrats’ thirty pieces of silver.

  9. The true philosophy of the Republicans. They’re “against” government handing out money, because it “skews the market” and other bullshit — unless of course the money happens to land in their own pockets, or the pockets of their filthy-rich friends, then it’s totally fair and just.

    This philosophy isn’t conservatism; it’s not libertarianism; it’s out and out plutocratism.

    Plutocratism is the true guiding philosophy of the Republican Party.

    – frank

  10. Leif says:

    I always thought that when someone was successful they payed taxes to help the Nation and for all less fortunately endowed to prosper. Silly me.

  11. Soho says:

    Just a minor detail- the government often does provide the actual loan within the loan guarantee programs. It depends on the guarantee program and project.

  12. thisdave says:

    Chairman Stearns, of the Congressional Dimwit Caucus: another reason why I’ve given up on U.S. democracy.

  13. Chris Winter says:

    “When somebody is successful, then you give them the subsidies and the tax credit,” explained Stearns, talking to Climate Progress.

    I was going to add, “But the government has no business picking winners and losers.” And then claim sarcastically that I made it up.

    But Stearns, with a straight face, preempted me.

    It brings to mind a line from a Tom Paxton LP: “You don’t have to invent things to satirize these people. You just quote them.”

  14. Ron says:

    How many times has this fool been reelected into office? How much of the citizens money has he given to his friends in low places? I thought an incentive was to give someone an “incentive” to build new businesses to compete with current ones or come up with an idea to improve on existing ideas. I guess I know nothing. With that kind of qualification, I could be the next congressman!

  15. Belgrave says:

    What concerns me about this report is just the plain, simple lack of intelligence shown by this congressman. Leave aside political leanings; I think it’s alarming that somebody who is so…well… stupid could be elected to congress. A cleverer person could have wrapped up his shilling for the oil companies in convoluted arguments to (e.g.) make one think than the oil companies are almost charities (using these subsidies to create zillions of jobs, for example). Maybe part of the reason so many right wing politicians don’t accept the science of climate change is that they’re just to thick to understand it!

  16. Paul Hoover says:

    What I can’t understand is why this illogical stance isn’t questioned by reasonable people. Stewart and Colbert would skewer this fellow but they preach to the choir and their approach does not sit well with the “right”. So let each of us in a reasonable well thought out argument begin to talk with our co-workers, friends and family and little by little make the point this idiocy has to stop. The extremes with either party are to be feared and there is common ground that benefits the nation and to hell with the “base”.

  17. Anne says:

    To think that this imbecile chairs the I&O Subcommittee of Energy and Commerce is a joke and a tragedy. Henry Waxman must have smoke coming out of his ears. How did this happen? It’s just appalling, the level of arrogant idiocy that seems to have infected the entire Republican party. This is just one more sad example. Oy.

    • John McCormick says:

      Anne, true, the rethug party is infected and those who vote them into office are the disease vector.

      • John McCormick says:

        Yes, I am saying that people who vote for rethugs are spreading the disease of the rethug party..

  18. Steve says:

    A few weeks ago,Congressman Stearns made it clear that the term “loan guarantee” was a misnomer. Gary Grippo, Deputy Assistant Secretary for Fiscal Operations and Policy, U.S. Department of the Treasury testified, “No commercial bank involved.” Stearns noted that Treasury just printed the money and DOE gave it out “They just came to DOE and got a check” stated Stearns. Grippo responded, “That is correct.”