" Universal Community of Friends - Taking Care of Business By PAUL KRUGMAN
Taking Care of Business


By PAUL KRUGMAN


Cynics tell us that money has completely corrupted our
politics, that in the last election big corporations
basically bought themselves a government that will serve
their interests. Several related events last week suggest
that the cynics have a point.


Consider, for starters, the airport security issue. On
Thursday morning this newspaper reported that London- based
Securicor - the biggest of the three companies that provide
almost all airport security in the United States - was
threatening to sue for damages if baggage screening is
taken over by federal employees. This just two weeks after
we learned that Securicor's U.S. subsidiary - which had
already been fined for employing convicted felons -
continued to hire employees without checking their
background after Sept. 11, and then lied about it to
regulators.


Under the circumstances, to claim that federalizing the
business would represent a "taking" showed remarkable
chutzpah. (Chutzpah, according to the classic definition,
is when you kill your parents, then plead for mercy because
you're an orphan.)


But the company evidently has friends in high places. Later
that day the Bush administration endorsed the proposals of
House Republican leaders, who have refused to allow an
airline security bill to come to a vote unless it leaves
baggage screening in private hands. The rhetoric behind
this position emphasizes the supposed advantages of the
private sector - competition, accountability, etc. But
there is little real competition in this industry, and - as
we've just seen - not much accountability for companies
with the right connections.


Then there was the House "stimulus" bill. The remarkable
thing we learned from that bill was that conservative
politicians - who used to claim that they were improving
incentives by reducing marginal tax rates, and that it was
just an incidental side effect that big corporations and
wealthy individuals were so richly rewarded - no longer
feel the need to disguise their payoffs. The core of the
bill was a repeal of the corporate alternative minimum tax
retroactive to 1986, which means that selected companies
would immediately receive huge lump sum payments from the
government, totaling around $25 billion, with no incentive
effect at all.


The bill's sponsors claim that the money would be invested
and used to create jobs, but it's hard to see why: a
potential investment that Texas Utilities or ChevronTexaco
wouldn't have made a week ago, because the project won't
yield a sufficiently high return, will seem no more
profitable after each company gets its $600 million
thank-you gift. And there are no strings attached to those
gifts: if the companies want to, say, pay huge bonuses to
top executives, they can. Republicans have always depended
on the kindness of corporations, but this bill takes that
faith to extremes.


True, defenders of the House bill remind us that "business"
doesn't just mean giant corporations - it also means the
mom-and-pop shop around the corner. Indeed - but the tax
refund wouldn't be going to mom-and- pop shops. Where it
would go, disproportionately, is to energy and mining
companies. Why? Because they already receive so many
special tax breaks that in the absence of the alternative
minimum tax many would pay little or no taxes. Now the
House proposes not only to remove that little
inconvenience, but to refund the taxes they've paid for the
past 15 years.


Just to cap off a great week for the mining interests, the
Bush administration also announced on Thursday that the
Interior Department would no longer be able to veto mining
projects on public land. You might think that extracting
minerals from public land, without even paying a royalty,
was a privilege rather than an entitlement; but in today's
Washington, financial might apparently makes right.


I'm sure I'll be accused of being unpatriotic for
suggesting that the administration and its Congressional
allies are pandering to special interests at a time like
this. That, of course, is what they are counting on - that
and the difficulty of getting people's attention when the
news is all anthrax, all the time.


But the truth must be spoken. Lately our government has not
exactly inspired confidence; its response to terrorism is
starting to look a bit scatterbrained. But on some subjects
our leaders are quite clearheaded: whatever else may be
going on, they make sure that they are taking care of
business.

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