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To Pay for Subsidies to Massive Corporations, States Are Waging War on Poor Families


#1

To Pay for Subsidies to Massive Corporations, States Are Waging War on Poor Families

Jake Johnson

To witness the consequences of a political system captured by and utterly subservient to the interests of organized wealth, take a quick look at the state of Oklahoma.


#2

The same wealth transfer scheme the states are undertaking are in constant motion at the Federal level.

Rather than breaking up the too-big-to-fail banks after they caused the 2008 crash, Congress put US taxpayers on the hook for $16 trillion in various bailout schemes (see Government Accountability Office report GAO-11-696, page 131). The President and Congress are therefore under constant pressure to cut Social Security and Medicare benefits as the easiest means of funding this and other corporate welfare.

With the too-big-to-fail banks controlling half of all US bank assets (compared to 25% in 2008), bail out schemes will far exceed $16 trillion when the next crash hits. That is why Clinton tells us Sanders' Medicare-for-all proposal can't happen. She needs to divert far more than the $17 trillion (that Sanders' proposal would cost for the first 10 years) for the next round of bail out schemes that will be further enriching her corporate paymasters.


#3

I wish someone would add up all the welfare payments to the poor against the welfare payments to corporations. I saw that figure once and did not save it. I am sure it has expanded for corporations.


#4

See? Fascism works! (Dammit!)
;-})


#8

Stock tip: buy LMP (Lampposts, Inc.)


#9

This is what happens when you elect corporate Democrats. After Clinton and Obama we need a real FDR type Democrat.

We expect Republicans to suck.


#10

Keen analysis, J. Johnson.

This bears repeating:

"Now as in the past, elites have rolled out tales of a parasitic and undeserving poor to deflect public anger from themselves," write Sanford Schram and Joe Soss. "Lazy and criminal 'takers' who abuse the goodwill of hardworking taxpayers are offered up as a handy scapegoat for the new hard times and a ready explanation for fiscal shortfalls."

There's another level to it, too. These think tanks pay boilerplate posters to push alternative narratives. Here on C.D. there's "Fabian" ever and always insisting that it's the Middle Class that hates the poor, rather than the OBVIOUS fact that billionaire families purchase soulless creatures like Scott Walker, and through THEM, unions and decent jobs are cut.


#11

I added (but the system didn't allow it)....

That Trump would push what's good for the billionaires, but term it good for America... as if what profits a relative handful of corporate interests somehow comports with what's good for the nation, as a whole.

This frame is one that I have disputed often to try to wake others up to how its subliminal messaging operates.

Mrs. Clinton would do likewise, but toss in a few minority appointments to make the graft appear less naked.


#12

""By deploying sensational language and fantastical imagery to stir outrage about single mothers "living off the public dole,"
politicians have succeeded in diverting attention away from America's real "welfare queens": Defense contractors, arms manufacturers, oil giants, and low wage employers, from Walmart to McDonald's.""

I've died and awaken in the Roman Empire, just before it's evolution into feudalism. Corporate feudalism is our next step, especially with the new proposed "trade" agreements.


#13

This is just another the article that documents that primary purpose of the state is to serve the (capitalist) ruling class ... not those who are unable to fend for themselves with lobbyists or "capital influence".

Just the mere mention of a major employer leaving a state for another causes the government in the current state to go into a complete panic. The result, the state opens the treasury's vault to offer whatever is required (grants, subsidies, tax breaks, etc.) to keep the major employer in the state. The end result is that the large corporations (capitalist ruling class) extracts even more "welfare" from the community of working class citizens.

The large corporations (as capital assets of the elite ruling class) have two unconditional beliefs:

  • Any social obligation they have to society is paid-in-full by employing workers, and

  • Any tax obligation is paid-in-full by any and all taxes paid by their employees (workers). Profits from operations (as the result of capital/private property) should not be taxed.

Isn't it telling that the (capitalist) ruling class expect the exploited working class, who mostly just receive enough wages from selling their labor to meet their basic needs, to pay for all the bills of government and social programs. In other words, the working class, through taxation, pay for the social programs that help themselves and for the "corporate welfare" programs for the large corporations that are exploiting them.

In essence, the working class are paying their exploiters to be exploited.

To reiterate, this Common Dream's article fully illuminates the fact that the state is nothing more than the means (tool) by which the ruling class rule.

Oligopoly results in political power as their economic importance and resources gives them the ability to influence government to introduce favorable policies — either directly, by funding political parties or lobbying politicians, or indirectly by investment decisions (i.e. by pressuring governments by means of capital flight. Thus concentrated economic power is in an ideal position to influence (if not control) political power and ensure state aid (both direct and indirect) to bolster the position of the corporation and allow it to expand further and faster than otherwise. More money can also be plowed into influencing the media and funding political think-tanks to skew the political climate in their favor.

Source: What Are the Effects of Big Business on Society?


#14

Don't forget Michigan... where the state's General Fund allotment to Community Mental Health services agencies was slashed almost two years before the Medicaid Expansion was finally put into place by a very reticent Republican controlled legislative.

The spin? It was predicted that the huge GF cut would be more than adequately replaced by monies made available by the windfall the Medicaid expansion would supposedly provide. This never occurred and in fact, just the opposite happened when an already rather bizarrely convoluted and Kafkaesque system of "spend downs" became even more stringently and inexplicably enforced and succeeded in dropping people from the medicaid rolls in a fashion that could only be called haphazard and random... people who were required to spend more on medical and mental health care than they made through their disability payments every month before they could use Medicaid... further impoverishing CMH boards that are in addition required to pay for any long term care for any uninsured or non-medicaid insured person out of GF monies. Guess how all this has impacted the availability of psychiatric beds.

Confused yet? This can only be considered purposeful confusion intended to save money for the state in the months it often takes to get people re-enrolled in Medicaid.

Oh... and it seems also important to note that people who have not had any changes in financial status or living arrangements in decades suddenly were dropped for not returning incoherent paperwork mailed to them. No one calls to check with someone with a long term condition that makes adherence to such bureaucratic foundering difficult or impossible... almost assuring that they will be dropped and only find out about it when they go to the pharmacy or their medical providers who cannot give services or essential and very expensive medications without medicaid reimbursement .

And there's more: then the news comes out that GF monies will be funneled into facilitating the use of public lands for forestry products and gas and oil exploration.

There's more but it's too depressing and completely Escher-like... makes your head spin.

Any one care to make suggestions about how the situation in Flint fits into all of this? Guesses are welcome. Or maybe you'd be better off turning into a huge cockroach.


#15

A lot of clarification is needed on poverty issues. Those who qualify for the EITC are are minimum wage workers. Today, low-income people and the poor are two separate and distinct sections of the population. Obviously, the minimum wage provides an inadequate income. However, it is roughly double what our former welfare aid provided.

Just to clarify our situation: Welfare is TANF, a short-term, marginally-subsidized job program, exclusively for those with children. Why this matters: In the real world, not everyone is able to work (health, etc.), and there aren't jobs for all. The last I heard, there are 7 jobs for every 10 jobless people who still have the means to pursue one (home address, phone, etc.). What do you think happens to those who are left out? There is no aid for our truly poor today. This issue should be addressed as well.

It's important to keep in mind that the US shipped out a huge number of jobs since the 1980s, ended actual welfare in the 1990s, creating an abundant surplus of job-ready people who are desperate for any job at any wage. Supply and demand. Employers have no compelling reason to increase wages. This makes it especially difficult to nudge up the min. wage.


#16

The common cause of poverty must be addressed so that it will be eliminated. Most people do not understand what the basic cause of poverty is, because they are too close to being poor themselves and cannot look objectively at the situation.

The cause of poverty is a deliberately created lack of equality of opportunity for people to work and earn a living. Land rights for access to it are legally permitted only to those who are the owners and who are allowed to charge ground-rent for its use by tenants. This opportunity is not of equal availability to all and this is morally wrong, yet most governments have laws which enable land to be privately owned and the owner is permitted to withhold the land from use. He/she does so in order to speculate in its rising value. The following essay explains how to eliminate poverty by granting fair access to useful sites of land.

Our system for the collection of this rent should be on a national basis where the rent is paid according to the value of the land. This is sometimes named Land Value Taxation, although it should not be seen as a tax, simply a return for what is being withheld as property and consequently stopping access to it by others. It has been described as an incentive toward the better use of the natural resources. But even after replacing that unhappy word “tax” with the term “revenue”, it is still likely to raise the heckles of the land owners and their buddies the banks, with whose money the speculation in land values regularly takes place.

So what I am proposing is the gradual nationalization of the land. A soon as a privately-owned urban site (with buildings) is sold (or the site re-parceled during its development), the total land parcel is immediately purchased by the government at its market price. This makes the cost to the
buyer lower, without directly affecting the seller. However it also makes the sale more attractive, so both land-owning parties will certainly have no reason to oppose this new arrangement.

On transfer to new owners, undeveloped (mostly rural) sites are subsequently also bought by the government, but the rate of paying for them is delayed (according to a preset publicized criteria) so that this is a less attractive deal. Unregistered land sales and transfer of land ownership (other than to the direct family) are not allowed, and the enforced payments of inheritance duty (on this form of“capital”), will encourage the less-wealthy land and property owners to offer for sale their new acquisitions.

Once the land is held by the government, it must be immediately leased to the urban property owner or rural tenant. Urban property owners are given the first refusal for leasing, otherwise it is available for lease to an entrepreneur who pays this annuity, and may (in particular cases) sub-let
it to the building-property owner, or divide it for various uses and eventual re-parcelation. Access to all buildings is denied if the site on which they stand has not been leased, even though the particular property in question has an owner. So when a building is sold, the leasing of its land parcel is implied as normally being part of the deal. The lease is for a definite time period (of say 49 years). The tenant may be either released from or renewed on this obligation, provided that the rights of access are properly transferred. The charge that the government takes for this access right should not be quite as high as the amount that the present kinds of landlords would take, were their tenants to rent the equivalent undeveloped sites. Consequently the cost of land in use, its affect on production costs and the amount of speculation in its value, will all gradually diminish. The corresponding reduced withholding of unused sites will have the same effect.

This means that over a period of about 40 years there will be a steady transfer of what the capitalistically-minded land owners and banks see as an investment in land, towards the money becoming available for investment in real durable capital goods, such as buildings, machinery,
railways, ships, aircraft, toll-operated highways (for which the rent is due), etc. However, not all of the money being returned to the former land owners nor their loans from the banks will be used in this way and the alternative is of it being loaned to the government for land purchase.

As the land progressively becomes nationally leased rather than privately owned, the leasing fees are returned to the government, albeit at a slow rate compared to its current expenditure for land purchases. So in order to get the ball rolling, the government needs to borrow money. But in
practice, most of this can come indirectly from the land owners themselves, after their loans on land purchase are returned to the banks, from whence they previously came. Those previous landlords, who now have invested in durable capital or national bonds, may claim that their returning dividends are less than when the land was in their hands. However, it should be pointed out that some of their land was not being properly used anyway, and that the interest on investment which they now receive compares favorably with the effects of their past speculations, which were either doubtful or based on illegally leaked information about municipal planned growth, etc. The interest on these loans to the government is more than covered by the leasing fees, so that after some time there is a greater return to the government than its related expenditure. Then it can slowly repay the banks and eventually reduce other kinds of tax too.
By this arrangement, after some considerable time has passed, the economic rent from land will be collected by the government for national use and the other forms of taxation are progressively scrapped.

The land owners and speculators in land values don’t see their land ownership as being something special compared to other forms of capital investment--indeed the whole of past macroeconomics theory has been deliberately blinded to the fact that within our social system, the activities of true capitalists (as investors) and land lords (as speculators) are not the same. After we stop flaunting this vital piece of academic knowledge (for which see Henry George, who first promoted LVT), and encourage the nationalistic-minded governments to participate in “capitalistic” investment in land, there will be a good chance for our ideals and principles to be finally forgotten!--whilst in practice by nationalizing the land, eventually they undoubtedly and inevitably will have a significantly beneficial effect on the macro-economy; instead of the current way that our obviously politically-incorrect tax proposals are slighted, suppressed and villainously ignored.


#18

Anyone with a brain and common sense know who the real moochers are in this country.....And it is not the poor.


#19

Yes, one should invest in tar, chicken feathers, rails (for riding) and lots of good hemp rope.
;-})


#20

It worked for Kafka! :wink:
;-})


#21

One thing we rarely see in establishment articles is the fact that when you have exhausted your unemployment benefits, you drop off the back of the system. You no longer exist, no longer are included in the unemployment rolls. In essence, you become an unperson.
* When I read government "statistics" about how unemployment is decreasing, I wonder how much of that decrease is due to the above.
;-})


#22

I find it hard to swallow that the legislators in Oklahoma always want to cut medicaid and insist on trying to privatize it when they get full health benefits for doing "work" (if you could call fund-raising work) for 4 months out of the year, all on the back of the tax payer.
Also, even poor people pay taxes unless they buy everything on the black market, or subsist totally on SNAP benefits. TANF does not exist here in Oklahoma.... I think last year there were something like 18 families in the whole state that received TANF benefits. Most the TANF goes to the state to care for the children the state has seen fit to take away from their parents.
I am a dialysis patient and I get charged $1 every time I go to dialysis, which is three times a week, thanks Mary Fallin, enjoy your raise....I hope you come down with a case of virulent eye herpes.
Thanks for so eloquently stating something that is a HUGE problem and one that is often ignored.


#24

Because this is a Progressive community, I will start with the fact that I am not progressive in any way. I don't like computers in cars. Even as an engineer I don't care much for computers except maybe to share ideas. If you are open minded at all, it has to be agreed upon that those in Washington DC are disinterested in the peons who pay the bills. If you are lucky enough to have a job, you will do anything to avoid the taxes going to these people. Government is not the solution to your problems. Government has got way too big and is interferring in EVERYBODYs business. You may think that socialism and or communism is a solution but when government controls everything, you end up with places like Venezula or Cuba or what was Burma. Note that the man who calls himself Obama visits these countrys because he indeed is a communist. That being said I see Washington DC as an island that is filled with vipers. They are making themselves wealthy with your tax dollars. It is not Republicans and Democrats. It is leftists versus regular folks. All of those in Washington DC see this as the money train. Don't change anything as far as they are concerned. Like him or hate him, Donald Trump told the truth. He gave money to ALL the politicians and so when he asked them for something he got it. THEY ARE ALL FOR SALE. Government should have nothing to do with the medical system. They should not control insurance companys. They should have nothing to do with many many things. Bathroom use should be none of their business. What changed between Cuba and the United States? Did Cuba suddenly become free? Are people allowed to live if they criticize the government? I just wondered why we are so friendly with them all of a sudden. Corporations should not be lobbying the government and buying influence. Politicians should not be legally able to do insider trading. Lawyers should never be allowed to run for office. Might as well elect people fresh out of prison as expect a lawyer to be honest. Now these are my opinions. I am a world traveler. Immigration laws are enforced where I live. Without them, there is no country. No borders mean no country. Does anyone want some group of elitist snobs running the whole world? Just asking.


#25

This is the umpteenth article written since the late 70's, saying the same ole thing ---All local, state and nation state (s) monies simply handed over to corporations....While all else (infrastructure) needed by all people, suffer more and more....Enough, wheres the monies coming from? Taxes, fine, then why are they being paid for others (in this cases obese corporations--which for the most part don't pay their legally owed taxes--wrongly are given the lowest tax rate---refuse to pay for their own infrastructure or pollution---and demand corrupt politicians they arm twist once put in office ---for yearly tax cuts......)....WHY? Pay for this level of theft---withdraw and produce and pay for your own local and state services and programs.....Shut out....Since the justice system is broken among all other institutions......