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Ralph Nader > In the Public Interest > Corporate Welfare

Lo, the poor taxpayer! At all levels of government, thousands of companies are feeding at the taxpayers’ trough. Washington has become a burgeoning accounts receivable for large corporations on welfare.

So numerous and diverse and circuitous are these programs — subsidies, bailouts, giveaways, loan guarantees, tax expenditures (tax breaks), inflated contracts, product promotion, protections from competition, grants, debt forgiveness etc., — that an umbrella phrase is needed to embrace them. “Aid to dependent corporations” reaches almost every sector of industry and commerce. It makes a mockery of the customary Chamber of Commerce paeans. sink-or-swim-capitalism. Increasingly; corporate socialism is the economy for much of the GNP, except for many small businesses who are still free to go bankrupt instead of going to Washington.. The use of the law and campaign money to legitimize these transfers of wealth from modest income taxpayers to corporations has become an accepted phenomenon for the Republican and Democratic Parties to avoid addressing. Both Parties speak of attaching responsibility to the welfare recipients among the poor and disabled — most recently the new President Bill Clinton. But attaching responsibility, workfare, standards, and public review to corporate welfare, which is far greater in total dollars than poverty welfare, is not a topic of much debate either during or between elections

The sheer grossness and avariciousness of such corporate power over the public purse is stirring attentions hitherto somnolent. Money is scarce and citizens and some government officials are asking why basic needs of a society, including its children’s wellbeing, are subordinated to provide large subsidies to the likes of the nuclear industry, General Motors, Marriott Hotels, military contractors, drug corporations, tobacco companies, banks, mining conglomerates, giant grain companies etc?

To ask such questions is only the beginning of comprehensive understanding of such vested interests and how they can maintain such a dichotomy between their heralded ideology and their corporatization of taxpayer assets and public resources. Typically, such touchy subjects are not treated with adequate public documentation by either the government providers or business recipients. Data, research, analysis are hard to come by in comparison to the plethora of studies, investigations and hearings to which poverty welfare programs are treated.

Washington Think Tanks think little about corporate welfare in no small part because they are on their version of it themselves. Universities produce little scholarship in these areas as well. They, with few notable exceptions, do not like reflecting pools either. No journals are devoted to regular coverage of these corporate milkings of taxpayer monies at the same time that a record low of 7 percent of government revenue comes from corporations, compliments of an accommodating tax code.

Nonetheless, the sheer magnitude and distorting effect of so many of these corporate welfare programs, coupled with their fundamental inequity and deception, invites a framework of accountability with all deliberate speed. Normal administrative due process applied to regulatory actions does not exist for subsidy decisions. These decisions feature greater secrecy, few public dockets for public notice and comment, no standing for taxpayers to challenge such agency decisions within the agency, or in the courts, and severely limited judicial review in any event. Official evaluations of efficacy for these programs that border on the farcical.

The corporate subsidy state possesses significant authoritarian trappings that shut out the Americans who are paying and suffering from its seemingly unchallengeable permanence which embraces all three branches of government. The 3500. inhabitants of the Poletown section of Detroit felt this closeout in their losing effort to stop the use of eminent domain powers by the city on behalf of General Motors. Their homes, churches, small businesses and other structures were expropriated and demolished. The acres of land were handed over to General Motors to build an automated manufacturing plant with about $350 million worth of local, state and federal subsidies.

Simple questions are neither authoritatively asked nor answered for these government handouts to corporations. Do these programs meet their declared purposes? What are their side effects, such as becoming an unfair method of competition, an inefficient use of resources compared to alternatives, a cause of technological harms, speculation, waste or corruption?

With the federal deficit growing at more than $1 billion a day and with severe pressures on worthy government programs to be cut, it is time for a profound intermodal anaylsis of budget allocations between monies going to organized corporate interests and monies expended on general societal interests.

Until S&L bailouts are made to confront federal housing or education ar health programs intermodally, there will not be sufficient civic interest to dymystify, publicize, diminish and reform the corporate subsidy state to more accountable proportions.