Conservatives rightly rail against “welfare” programs such as food stamps. This is especially true when these programs are abused, but it is true in general as well. The government simply should not be in the business of redistributing wealth, and certainly not of giving direct handouts, especially to people who are perfectly capable of working.
But did you know that business corporations receive far more in direct handouts than do these maligned individuals—often backed by conservatives and conservative politicians? And the numbers will startle you. According to a report by watchdog organization “Open the Books,” Fortune 100 companies received direct handouts of over $1.2 Trillion between 2000 and 2012.
Food stamp costs, even after skyrocketing since 2009, amounted to less than half of that during the same period.
And these are not the indirect, so-called “subsidies” often condemned by the left (such as “tax breaks” for big oil companies, etc.). These are direct payments, etc.
Norm Singleton of Campaign for Liberty passed along a report on the study from earlier this year:
Too many companies in America, from Boeing to AT&T, have come to regard government as a giant customer. They cheerlead for big government because they are among its chief beneficiaries.
So why hasn’t it happened? Why haven’t Republicans pledged to end corporate welfare as we know it? Part of the explanation is that too many politicians have gotten confused about the difference between free-market capitalism and crony capitalism. Democrats love welfare of any kind and seem to relish the idea of making big business government-dependent. President Obama, with his stimulus plans and his green-energy giveaways, has been a master at that.
The business interests have also gotten away with their taxpayer heist for too long by pretending that business subsidies are just a small, inconsequential part of the budget. Actually, it’s a surprisingly large mountain of cash — even if it is well hidden. This week an Illinois-based watchdog group, Open the Books, issued a new report that scrupulously tallies up all federal grants, loans, direct payments, and insurance subsidies flowing to individuals and companies. It examined all accounts from the Department of Commerce to the Department of Transportation and found that corporate-welfare payments from the federal government to the Fortune 100 companies, from 2000 to 2012, amounted to $1.2 trillion. I recommend a visit to the website openthebooks.com, if you can stomach it.
That $1.2 trillion number does not include the hundreds of billions of dollars in housing, bank, and auto-company bailouts in 2008 and 2009, because those payments are kept mostly invisible in the federal-agency books. It also doesn’t include the asset purchases of the Federal Reserve, indirect subsidies such as the ethanol mandate that enriches large agribusinesses like Archer Daniels Midland, or special tax breaks for wind and solar manufacturers.
Most of the payments Open the Books uncovered were contracts between government agencies and private firms. The largest of these are military-procurement deals with such firms as Lockheed Martin ($392 billion), General Dynamics ($170 billion), and United Technologies ($73 billion). At least taxpayers get services in exchange for these tax dollars. Still, the overall size of the government-industrial complex makes it all the harder to cut federal spending, because the recipients of all this money become high-roller lobbying forces for higher appropriations.
Far less defensible is the $21.3 billion that was doled out in the form of outright income-transfer subsidies to corporate America. On average, each Fortune 100 company received about $200 million in such handouts. So who are the major corporate-welfare queens? The biggest grant recipients were General Electric ($380 million), followed by General Motors ($370 million), Boeing ($264 million), Archer Daniels Midland ($174 million), and United Technologies ($160 million).
A couple things on this. First, this is exactly the problem I discussed in several places in Restoring America. Whether in regard to local government, state or federal government, the problem is the same, and it is widespread. Some business always has its hand in the pot, and this creates all kinds of problems of special interest and conflict, as well as opportunities for political propaganda (“jobs!”). Lobbying efforts by these enriched companies then help fund the same politicians to keep their seats. It’s a cozy relationship of power and privilege. Also, in my chapters on markets and defense, this problem comes to the fore. It needs more sunlight and more action to cut it out root and branch.
Secondly, it’s worth calling a spade a spade here. This is not just the equivalent of food stamps for the rich. It is an aspect of what should properly be called national corporatism, or corporate fascism. Yes, indeed, this is food stamps for fascists. And while our system does not have all the hallmarks of the classic fascist regimes, it has many, and the economic structure of national corporatism is one of them. Pinpointing where this went wrong may be tricking, as far as origins goes, but the greatest early proponent of it was the American Fascist himself, Theodore Roosevelt.
Isn’t 100+ years of corporate fascism enough? Isn’t 100+ years of the warfare-welfare state enough?