End Corporate Welfare

When debates about cutting government spending come around, today’s discussions focus most quickly on cutting social programs – education, medical care, safety, regulatory agencies, unemployment assistance, food and nutrition assistance, etc.  They are the programs designed to primarily assist those with lower incomes and less opportunities for advancement.  The rationale for cutting these programs is usually that “we cannot afford to be so generous.”  When a government program is proposed to create jobs, even temporarily to ease an economic crisis, the response is that “government should not be in the business of creating jobs, that is the job of business.”  Assistance programs and projects are cast as various forms of welfare, and welfare – “living on the public dole” – has never been popular with the general public.  Primarily because many people erroneously feel that they are 1-way programs for other people for which the taxpayer gets nothing back in return, or that we are “rewarding” people for not taking adequate responsibility for their own circumstances.

But the businesspeople who say that jobs are the province of business, not government, are not hiring.  A lack of jobs is not feeding a significant portion of Americans, not providing them with medical care and other necessities.  Many of the jobs that are provided do not pay enough – especially after commuting and day care expenses – to then afford these necessities.  Even though better wages would create better purchasing power leading to even greater business revenue, the cry against “social welfare” continues to be heard, while America continues to stagnate.

But welfare is in the eye of the beholder.  Many businesspeople who decry social welfare programs for individuals unhesitantly try to leap to the front of the line seeking government dole-outs for their businesses.  Not just the notorious big bailouts of recent memory to the megabanks and the auto industry.  Even more significant are the smaller, everyday payouts that have become part of the regular fabric and everyday routine of American business.

The federal government spends trillions of dollars each year.  A significant portion of those trillions goes into the hands of “vendors” – businesses competing to receive those dollars, often seeking to increase government spending even more.  The hypocritical song of many of these businesspeople goes like this:
·       they decry the level of government spending
·       they decry the taxes and debt required to pay for that spending
·       they decry creating government-funded jobs to move us out of this Great Recession
·       they then decry attempts to reduce government purchasing levels, terminate a building program, or close a facility
·       they base their objections on such reductions as causing “job losses,” never quite mentioning their drop in revenue (and profitability) as their real objection

So to “protect jobs” (i.e. keep businesses growing and profitable) we buy military hardware and naval vessels we do not need.  We fund dubious university research or new buildings for duplicate educational programs.  We build bridges and roads that carry little traffic.  We keep more military bases than needed for our defense in order to support local economies.  Communities seek government grants to pay for local facility and infrastructure projects, with their local businesspeople lined up to develop those projects, and then those same people complain that our government spends too much or excessively interferes in our lives.

The Boeing and General Electric corporations both learned many years ago the secret to business success: make sure you scatter your subassembly plants and divisional affiliates all across the country.  When the government tries to scale back its purchases or you need political support to underwrite your revenue, you are in the backyards of Congresspersons from across the nation.  These Congresspersons will be there when needed to protect their district’s constituents, the company will keep its revenue by “saving jobs,” and government spending will go on unreduced.  Many other national companies have learned the same game.  We should remember that the bailout of the automotive manufacturers (which has proven to be a smart bailout, actually) was only partially about the auto manufacturers and their several hundred employees.  It was also rationalized by the several million workers in the related businesses of auto parts, raw material suppliers, distribution, and local car dealers that loomed equally vulnerable in a bankruptcy.  “Detroit” is in fact located all across automotive America.

If we are wanting to say that, as a collective government, we cannot afford to help individual Americans, then let us be honest enough to also say we cannot afford to help business America.  A dole is a dole is a dole.  An unneeded government purchase at an inflated price is no less wasteful a handout than an assistance payment to an individual.  Propping up a business is no more or less noble than propping up an individual citizen.  Bluntly speaking, if we are told that the key to ending this Great Recession is increased consumer spending, the fastest and most effective way to do that is to give the government’s money directly to our citizens with instructions to “go spend it.”  Giving that same money to companies first as their welfare money just diffuses and delays the impact, as we saw when we gave the banks a trillion dollars to rejuvenate lending and they chose to just sit on it.

In the long run, people need jobs to meet their needs in a sustained way and to optimize their contributions to our society.  And to be consistent with the American character that prizes work, self-responsibility, and the dignity that comes from taking care of one’s self.  Charity, a noble and important feature of America and its people, works best as a short-term transition, an enabler of one’s future.  When it becomes a standard way of living, it creates dependency, which is inherently unhealthy for the soul and for proper human growth and development.  Businesses are no different; business dependency is just as bad as individual dependency.  (The collapse of Russia’s economy twenty years ago illustrated the negatives of state protection of unproductive businesses.)

Henceforth, let all businesspeople (and their politician partners) who proclaim fealty to the capitalistic economy stand on their own, without leaning on the government’s – i.e. the people’s – dole.  If many of us look into the mirror, we will see a public welfare recipient in our reflection.  The check just comes to us in many varied forms – directly in our mailbox, or through our employer’s paycheck.  There certainly may be many things wrong with our system of public assistance in America, but so also is the more invisible form of business public assistance.  Integrity and consistency in our beliefs and actions, versus hypocrisy, should still count for something.