Ending Corporate Welfare as We Know It

One of the principle articles of faith among conservatives is that there are currently “too many people on welfare.” These welfare “freeloaders,” Tea Party activists assure us, are draining state and federal budgets, and are chiefly responsible for the economic recession.

The radical Right, aided by ill-informed pundits and propagandistic corporate news networks, has successfully directed the anger of conservative, middle-class Americans away from the “too big to fail” mega-banks and Wall Street insiders whose fraudulent trading practices actually caused the 2008 collapse, to public workers, teachers, firefighters and social-workers and their “Cadillac”-style pensions.

This is precisely the strategy embattled Republican Gov. Scott Walker used to survive his recall election in Wisconsin. The fact that Walker outspent his thoroughly uninspiring Democratic opponent, Tom Barrett, by a margin of eight to one--with much of the money coming from out-of-state contributors--did not hurt, either.

Here in Maine, Gov. Paul LePage has made “welfare reform” one of his chief goals. Yet while LePage insists we must all “share the sacrifice” because the state is “broke,” his recent remarks at the Maine Republican convention seem far more indicative of his actual feelings toward those in need of government assistance. “Get off the couch and get a job!” LePage chastised Maine’s welfare recipients in his speech. The governor went on to add that the state’s welfare program is “cannibalizing the rest of state government.” Indeed, LePage’s press secretary, Adrienne Bennett, in an Op-Ed to the Portland Press Herald/Maine Sunday Telegram (Maine Voices, 6/22/2012) lauded the fact that her boss “is not a polished politician or politically correct…” Well, that’s one way of describing the man, I suppose.

(Hey, here’s a question: If the state is “broke” as LePage and his budget-slashing cronies routinely claim, then where did we come up with the $300,000 for a feasibility study for the proposed—and highly controversial—east-west highway?)

Of course, if the number of welfare recipients has increased, it is only because so many Americans are unemployed, or underemployed. Rather than railing against welfare, politicians like LePage could put their efforts toward encouraging job creation, thus reducing the need for government assistance. But all of this focuses only on public welfare. What about corporate welfare?

The local and national media constantly highlight the problems with general assistance, Social Security and Medicare, but rarely do they mention any of the numerous abuses of the system by corporations. As it turns out, corporations benefit more from welfare—in the form of government subsidies, tax-breaks, bailouts and, at times, outright fraud—than any individual food-stamp recipient. Who are these freeloading corporate moochers, you ask? Let’s take a look at some of the biggest culprits.

There is JPMorgan Chase, for starters.

The credit card company--whose Chief Executive Jamie Dimon has been doing damage control in the wake of reports the company lost $20 billion to risky bets—is a huge recipient of government largess, according to a recent article by Bloomberg. JPMorgan receives a government subsidy of close to $14 billion a year—much of which is goes toward “big salaries and bonuses.” According to the article, these subsidies account for nearly 77 percent of JPMorgan’s total income for the past four quarters. And, as with the Wall Street bailouts, all of this is taxpayer money.

Corporate welfare abuser case study number two is General Electric. According to a widely-circulated story in The New York Times last year (3/24/2011), G.E. utilizes a vast array of offshore banking practices, lobbying for tax-breaks and other intricate financial loopholes to avoid paying taxes entirely. “Such strategies,” the Times article notes, “…have pushed down the corporate share of the nation’s tax receipts—from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.”

G.E., of course, is partial owner of NBC, as well as one of the world’s largest weapons manufacturers. The company, in other words, has plenty of money. There is no reason why it cannot pay its fair share of taxes just like you and I are expected to.

And the third and final example of unwarranted corporate welfare is the 2008 Troubled Asset Relief Program (TARP), more commonly known as the Wall Street bailout.

Quite simply, Wall Street institutions like Bank of America, Morgan Stanley and JPMorgan Chase trashed the global economy through fraudulent trading, betting against toxic assets, and through the sub-prime mortgage scandal.

Now, the dictum of laissez-fair, free-market capitalism suggests these Wall Street banks that took reckless, unethical risks deserve to pay the financial (and, one would also assume, the legal) consequences for their business actions. This is the essence of the Darwinian, “Invisible Hand” of the “self-regulating” free-market. As the Bloomberg editorial notes, “…such [government] bailouts encourage a reckless confidence among creditors.” Why should big banks change their behavior if they know the government will be there to save them from bankruptcy? It is also important to keep in mind, the TARP bill was hardly the first time the banking industry has received a taxpayer-financed bailout. The “Savings and Loans” crisis of the 1980s lead to a similar instance of government intervention.

Yet, citizens rarely consider these examples of corporate welfare when discussing the issue. The topic is almost exclusively focused on public welfare programs. The great irony of these pervasive forms of corporate welfare is they essentially negate the essential framework of free-market capitalism. What we actually have in this country is a form of socialism for the rich wherein profits are privatized and costs are externalized—and passed on to the taxpayers.

All of which begs the question: When will JPMorgan, G.E. and others heed LePage’s advice, come down from their corporate thrones, and break their culture of dependency?

  

    

  

The Agony and the Apathy: A Post-Primary Round Up

My reactions to Maine’s U.S. Senate Primary election are so varied and disjointed I decided to address each one individually. Read on for my analysis.

The Dark Horse Rises

The Democrats offered the biggest surprise of the night, by selecting their most progressive candidate, state Senator Cynthia Dill, as the party’s nominee. Dill supports single-payer universal health care and cutting the bloated, wasteful military-spending budget—two issues that are of prime concern to Guerrilla Press.

Whether Dill can prevail against popular former governor, Angus King in November remains to be seen.

Many Democrats fear a repeat of the 2010 governor’s race in which Dill splits the vote with King, thus handing Republican Charlie Summers the win. (In fact, my sources in the Maine Democratic Party quietly concede all four of the primary contenders are token “placeholders,” and the party has essentially given King its unofficial endorsement. If this is true, it calls into question the relevancy of the Democratic Party in the state.) As I have documented numerous times, the so-called “spoiler” effect is largely a scare tactic. And as my friend The Punk Patriot has made clear, strategic voting is misguided, as it is.

Regardless of Dill’s chances, at least the Dems actually have selected an outspoken, unabashedly progressive candidate. Dill is a welcome change of pace from the tepid, milquetoast candidates the state has favored in recent elections (Libby Mitchell, John Baldacci, and Tom Allen to name a few). With no Green candidate in the U.S. Senate race, Cynthia Dill may offer Greens a progressive alternative they do not have to feel ashamed of supporting.

The Agony and the Apathy of Maine Voters

If Dill’s win was the most surprising outcome, the low voter turnout was the least surprising.

Whether the poor turnout was due to a general lack of enthusiasm for the candidates, a sign of dissatisfaction with both parties, or if voters are simply waiting for November when Independent Angus King will be on the ballot, Mainers decided to sit this primary out. Indeed, Dill and Summers were elected by a mere 11 percent and 13 percent of voters, respectively. As a follow-up editorial in the Portland Press Herald put it, “It was as if these two Cumberland County towns [Brunswick and South Portland] picked the winners and Maine’s other 496 municipalities just watched” (“Our View: Low Primary Turnout Sends Clear Message,” 6/14/2012).

It is no secret that many Americans do not vote—in state primaries or at all. The one downside to my own political activism is I have experienced citizens’ apathy toward politics, civic engagement and democracy firsthand. It can be very depressing and demobilizing. One can only hope last week’s primary was an aberration and voter turnout will be much higher in November.

The King’s Speech

Speaking of Angus King…

His post-primary press conference, where he called on his opponents to renounce any “Super PAC” money, is a prime example of the former governor’s deviousness.

Strategy-wise, King’s move is brilliant. He has essentially put Summers and Dill in no-win bind. If they accept King’s No-PACs proposal (and, so far, neither Dill nor Summers has formally agreed to it), they put themselves at a clear monetary disadvantage. If they refuse, both end up looking like upholders of the status-quo, and reinforce King’s image as the innovative “change agent.” Of course, the independently-wealthy King does not need any Super PAC money to win the race, which is why his entire proposal, while certainly laudable in principle, is entirely disingenuous.

Don’t get me wrong: I absolutely support abolishing Super PACs and getting big money out of politics. But one-percenters like Angus King, Michael Bloomberg and Newt Gingrich are hardly the most appropriate spokesmen for this cause.

You can read my thoughts on Angus King’s bid for the Senate, here.

Success Not Guaranteed

Not much to say about GOP nominee, and current Secretary of State, Charlie Summers. He’s not as bad as rival Bruce Poliquin, but he is still undesirable for the position.

This will mark Summers’ fourth bid for national office. He has run unsuccessfully for the First Congressional House District seat (currently occupied by Chellie Pingree) three times. He failed to win the primary for the House District race in 1994; lost to Rep. Tom Allen in 2004; and failed to defeat Congresswoman Pingree in 2008. Given that King is the likely winner of this race, it looks like Summers will be “oh for four” as they say in sports.

It is worth keeping in mind Summers’ efforts to repeal Maine’s “Same day voter registration” policy last fall. Summers in his capacity as Secretary of State, accused a number of UMaine students of engaging in voter fraud during the 2010 and 2008 elections. Even after a two-month investigation failed to confirm his claims, Summers maintained Maine’s voting system remains “fragile and vulnerable” (Bangor Daily News, 9/21/2011). To date, I do not believe Summers has formally apologized to any of the students falsely accused.

And so begins the summer of our discontent… Stay tuned for more election updates, and a more coherent piece later this week.      

American Idle: The Failure of Austerity and the Myth of the Job Creators

The May jobs report came out recently and the findings are not pretty. The U.S. job market added an anemic 69,000 jobs last month. The unemployment rate increased to 8.2 percent in May, from 8.1 percent in April. Even worse, the rise in unemployment negated most of the gains made earlier this spring. As the report notes, this is the third consecutive month in which job growth remained stagnant. Put more bluntly, the economy still sucks.

A few observations in light of these numbers:

First off, the Republicans’ insistence on maintaining tax-cuts for the wealthy, slashing state social services programs, and focusing exclusively on the federal deficit have proven an abject failure. President Obama’s economic stimulus package, on the other hand, was too small, and too timid.

As economic philosopher John Maynard Keynes understood, curbing spending during a recession is not the way out of an economic crisis. Quite the reverse, Keynes in his seminal work, The General Theory of Employment, Interest and Money advocated increased government spending during an economic slump in order to stabilize the economy and mitigate the suffering of the unemployed.

And austerity has failed overseas as well. The French showed their disdain for the country’s harsh austerity measures by giving conservative President Nicolas Sarkozy the boot. Greece now seems poised to do the same to their austerity-pushing government. Guardian writer, Will Hutton (6/02/2012) calls the right-wing austerity measures which have crippled the countries of the Eurozone, “one of the biggest financial and intellectual mistakes ever made.”

Second, we need to retire this bogus concept that wealthy business owners create jobs.

This myth has been so hammered into the American public (thanks, in no small part, to celebrated right-wing author Ayn Rand) it is now as readily accepted as other “truisms” like “The media is liberal,” or “The ‘surge’ in the Iraq war worked.” Indeed, during a recent “debate” between Maine Republican candidates for the U.S. Senate, this fiction of the rich as society’s “job-creators” was repeated ad nauseam by every candidate. 

Business owners do not create jobs--consumer demand does. It’s pretty simple, really. If a local business (let’s say, Coffee by Design) is very busy, and has more customers (or demand) than its small staff can adequately serve, the owner will hire more people in order to keep up with the increased demand. But if the store is going through a particularly slow period (i.e. a lack of consumer demand), and the owner finds too many of his employees sitting around gossiping, or staring at the clock, he may have to let some people go.

Either way, Mr. Coffee by Design is not going to just use his money to hire people willy-nilly, for no reason. He is not, in other words, creating jobs out of his own benevolence. There has to be a demand. Therefore, the rich do not create jobs, but consumers like you and I do.

And contrary to the protests of free-market conservatives, business tax-rates do not affect this basic logic of consumer-capitalism in the least bit. For instance, conservatives will often argue businesses are forced to cut staff in order to “cover” their taxes. Not only is this nonsense, but it seriously calls into question its proponents’ understanding of remedial supply-side economics. Quite simply, taxes have absolutely nothing to do with hiring. The two are not at all related.  

A business only pays taxes when it is making a profit. If your business is not profitable, then your taxes should be the least of your worries. (Then, of course, there are large corporations that are immensely profitable and avoid paying taxes entirely, but, alas, that’s a topic for another day.)  

Taxes are determined by subtracting your costs from your revenue. Any profits you have made after covering your costs are considered “taxable income.”

As finance blogger, Dave Johnson explains in a piece for Truth Out (5/14/2011):

You don’t even calculate your taxes until well after the hiring decision has been made. You don’t lay people off to “cover” your taxes. And even if you did lay people off to “cover” taxes it would lower your costs and you would have more profit, which means you would have more taxes…except that laying someone off when you had demand would cause you to have less revenue… and you see how ridiculous it is to associate taxes with hiring at all!          

As it is, in the last half century businesses have done more to destroy jobs, and prevent overall job growth. In an effort to maximize profits, businesses and large corporations have gone to great lengths to reduce jobs through outsourcing and mega mergers that result in mass layoffs. According to Jeff Clements, author of Corporations Are Not People, “By 2009, fewer Americans worked in manufacturing jobs than at any time since 1941.”

So, even ignoring the basics of supply-side economics, the mantra of “the rich create jobs,” is not true in practice. And yet, not once during the aforementioned Republican debate, did MPBN host, Jennifer Rooks challenge any of the candidates on the accuracy of this baseless talking point.

Then again, many of Rooks’ peers in the corporate media seem to view the very concept of job creation as a joke. And Obama and Mitt Romney remain exclusively focused on the “middle-class,” ignoring the plight of the poor and unemployed. Rather than focusing on job creation, Romney claimed over the weekend the country does not need any more teachers, firefighters and police officers.

Like I said earlier, the economy still sucks. And given the country’s austerity-obsessed, free-market zealots in Washington and the media, things are not likely to improve any time soon.

ABC Dismisses Third-Parties as too "Radical" for Serious Consideration

This story from ABC News ("Here Comes the Green Party: More Jobs, Pot, No 'Servants to Wall Street'," 6/06/2012) is emblematic of the type of snide, condescending news coverage the Green Party, and other third-party candidates routinely receive (that is, when the mainstream media can be bothered to offer any coverage at all).

Not even a pretense of journalistic objectivity here. Reporter Matt Negrin even acknowledges third-parties like the Greens, "don't get much respect from the political establishment." (Or, for that matter, the corporate news networks.) He then goes on to justify this lack of respect as "probably because third-party ideas tend to be a bit radical."

I'm sorry, but which specific part of Green candidate, Jill Stein's platform does Negrin find "radical"? The part about creating 25 million jobs? The notion of legalizing marijuana may have been considered radical 30 years ago, but even Maine has at least two medical marijuana dispensaries, now. And even President Obama has argued for shrinking the size of the military budget--even if he has actually increased it.

Meanwhile, truly radical policies like the Patriot Act, the NDAA, permanent tax-cuts for the wealthy and the abolition of workers' collective-bargaining rights are regularly presented by news organizations like ABC as reasonable, thoughtful and "moderate."

Kind of illustrates who the real radicals are.

For an intelligent, substantive article on Stein and her platform that was not written by a petulant 13-year-old, click here.

Death From Above 2012: Obama's Kill List Furthers the Imperial Presidency

Professor Noam Chomsky offered an astute comparison of President Barack Obama’s counterterrorism policies to those of George W. Bush during a recent interview on Democracy Now! “If the Bush administration didn’t like somebody, they’d kidnap them and send them to torture chambers,” he told host Amy Goodman. “If the Obama administration decides they don’t like somebody, they murder them.”

Turns out, Chomsky was not being hyperbolic.

A lengthy article in last week's New York Times (5/29/2012) gives an in-depth look at Obama’s secret terrorist “kill list.” The president’s practice of ordering the assassination of high-level terrorists has long been known. But the sprawling Times article offers fresh and altogether unsettling, insight into President Obama’s approach—as well as his apparent lack of ethical reservations--to the terror list.

As has long been assumed, President Obama personally oversees the terror list, and, as such, maintains ultimate executive authority over which high-value targets are placed on it. The list includes several Americans (perhaps most notably the U.S.-born cleric, Anwar al-Awlaki who was assassinated last September in Yemen), including a 17-year-old girl. Though the suspects are designated for “kill or capture,” authors Jo Becker and Scott Shane note “the capture part has become largely theoretical.”

The article also examines the administration’s fuzzy math when estimating civilian casualties from predator drone strikes. Obama maintains such pinpointed drone strikes are highly precise, often citing Pakistani civilian deaths in the “single digits.” However, according to the story, these estimates are based on a highly selective method of counting enemy combatants as “all military-age males in a strike zone.” This logic is based on top counterterrorism officials’ insistence anyone within the general proximity of a known al-Qaeda member is “probably up to no good.”

The article quotes one anonymous C.I.A. official who criticized this loose approach to reporting civilian deaths. “It bothers me when they say there were seven guys [killed], so they must all be militants,” the official said. They count the corpses and they’re not really sure who they are.”

Yet, perhaps the story’s most revelatory details are those depicting the president’s ethical regard for these undoubtedly radical procedures.



His decision, for instance, to execute Awlaki was, according to former chief of staff, William M. Daley, “an easy one.”

While making difficult and perhaps morally ambiguous decisions is certainly part of the president’s job, the fact that he had absolutely no qualms about ordering the killing of an American citizen is unnerving, to say the least. Yet according to National Security Advisor Thomas E. Donilon the president is “quite comfortable with the use of force on behalf of the United States.”

What may be even more unnerving is how little public criticism Obama’s draconian policies have received.

Indeed, President George W. Bush was rightly denounced as a war criminal, guilty of multiple violations of constitutional power, yet the left has remained largely silent on Obama’s glorified assassination program—even though it goes far beyond any of Bush’s crimes.

In fact, a recent blog entry by FAIR (Fairness & Accuracy in Reporting) activist Peter Hart, finds even the left-leaning MSNBC seems to have little interest in the Times’ findings. According to Hart, a search on the Nexis news database for any mention of Obama’s “kill list” on MSNBC pulled up zero results.

Witness the irrational, almost hypnotic effects of partisan loyalty at work. Essentially it is OK with liberals when Obama breaks the law and frighteningly expands the scope of executive power because he is “their guy.” This is precisely why I left the Democratic Party for the Greens. Liberals, I have become convinced, only care about peace and justice when it is politically expedient for them to.

As former Bush national security lawyer, John B. Bellinger III states in the article, Obama has not received the same level of criticism as President Bush because his “liberal reputation and ‘softer packaging’ have protected him.”

His quote reminds me of something I wrote in the University of Maine’s Maine Campus back in 2009 after Obama had announced his troop surge in Afghanistan: “Obama may present himself as a kinder, gentler machine-gun president, but he is a machine-gun president nonetheless.”

       

The Democratic Party refused to impeach Bush and Cheney for their numerous high crimes and misdemeanors—and that refusal is precisely why Obama currently enjoys the expanded, heretofore unconstitutional executive authority he now does. Michigan Democrat, Rep. John Conyers, then head of the House Judiciary Committee, claimed he was opposed to initiating impeachment hearings because Fox News would criticize him. Seriously.

And the Democrats’ liberal supporters were just as spineless. I remember being chastised by a fellow progressive for advocating Bush/Cheney’s impeachment. Impeachment would be a “distraction,” he lectured me. It would “tear the country apart,” whatever that is supposed to mean. And, most tellingly, it could “cost the Democrats the election,” which I think illustrates where liberals’ real priorities are. (Hint: They are not with the rule of law.)

This cowardice has come at a great cost to our democracy. A dangerous precedent has been established. The president now has far more power than the framers of the Constitution ever intended. And yet, liberals still drive around with bumper stickers announcing their support for both “Obama/Bidden, 2012” and world peace. Given the president’s "comfort" with foreign assassinations, it seems the two things are quite at odds.