December 31, 2005

Government by Giveaway

By Michael Parenti

In December 2005, the reactionaries who are running the government and
ruining the country decided to cut about $42 billion from the human
services budget over the next few years. Most of the cuts will come out
of the hides of the very poorest among us. The victims include persons
afflicted with disabling diseases who already have trouble trying to
live on a monthly federal pittance.

But there is another side to this Scrooge story. There are others among
us who are treated most handsomely by Washington. I am referring, of
course, to Corporate America.

A central function of the corporate capitalist state is to maintain and
advance the capital accumulation process. This it does by (a) taxing
the many to subsidize the few; and (b) privatizing the public wealth,
specifically the land, airwaves, mineral deposits, and other natural
resources that are nominally the property of the American people.

In the 1950s, the Eisenhower administration sought to undo what
conservatives in those days called the "creeping socialism" of the New
Deal. So they handed over to private corporations some $50 billion (or
$200 billion in today's dollars) worth of offshore oil reserves,
government owned synthetic rubber factories, public lands, public
utilities, and atomic installations.

During that time, the federal government also built a multibillion
dollar interstate highway system that provided the
infrastructure----and an enormous indirect subsidy---for the trucking
and automotive industries. The practice of using the public's money and
resources to subsidize private enterprise continues to this day. It is
variously estimated that every year, the federal government doles out
hundreds of billions of dollars in corporate welfare, in the form of
tax exclusions, reduced tax assessments, generous depreciation
write-offs and tax credits, price supports, loan guarantees, payments
in kind, research and development grants, subsidized insurance rates,
marketing services, export subsidies, irrigation and reclamation
programs, and research and development grants.

The government leases or sells at a mere fraction of market value
billions of dollars worth of oil, coal, and mineral reserves. It fails
to collect hundreds of millions of dollars in royalties, interest, and
penalties. And it sometimes gives the companies the right to purchase
the land title for a nominal fee.

The government pays out huge sums in unnecessarily high interest rates
on the billions it has borrowed from private creditors (the national
debt). It permits billions in public funds to remain on deposit in
private banks without collecting interest.

It lends out billions at below-market interest rates. It tolerates
overcharging by firms with whom it does business, and provides long
term credits, and tariff protections to large companies. It pays out
billions to reimburse big corporate defense contractors for the costs
of their mergers.

The government gave away the entire broadcasting spectrum valued at $37
billion (in 1989 dollars)--instead of leasing or auctioning it
off-thereby giving the big networks nearly five times the broadcasting
space they previously controlled.

Every year, the federal government loses tens of millions of dollars
charging "ranchers" below cost grazing rates on over twenty million
acres of public lands. These "ranchers" include a number of
billionaires, big oil companies, and insurance conglomerates.

Over the past five decades, at least $100 billion in public subsidies
have gone to the nuclear industry and many billions worth of federally
funded research and development has passed straight into corporate
hands without the government collecting a cent in royalties.

The U.S. Forest Service has built almost 400,000 miles of access roads
through national forests---many times the size of the entire federal
interstate highway system. Used for the logging operations of timber
companies, these roads contribute to massive mud slides that
contaminate water supplies, ruin spawning streams, and kill people.

The U.S. Agency for International Development (AID), spent over $1
billion in taxpayer money over the past decade to help companies move
U.S. jobs to cheaper labor markets abroad. AID provided low interest
loans, tax exemptions, travel and training funds, and advertising to
the corporate outsourcers. AID also furnished blacklists to help
companies weed out union sympathizers from their work forces in various
countries.

In any one year, many billions in subsidies go to agribusiness
producers of feed grain, wheat, cotton, rice, soy, dairy, wool,
tobacco, peanuts, and wine, with relatively little going to small
agrarian producers. Subsidies to big commercial farms encourage
wasteful water practices and increased toxic runoffs into rivers and
bays from pesticides, herbicides, and chemical fertilizers.

The Government Accountability Office (GAO) estimates that agribusiness
uses legal loopholes to circumvent subsidy limits, thereby collecting
more than $2 billion in unjustified payments each year.

The federal government subsidizes the railroad, shipping, and airline
industries, along with the exporters of iron, steel, textiles, tobacco,
paper, and other products. It doles out huge amounts in grants and tax
incentives to the big petroleum companies to encourage oil exploration.


In the 1970s, several major petroleum companies leased acreage in
Alaska for oil exploration, paying $900 million for public lands that
yielded $50 billion.

Numerous medications marketed by the pharmaceutical industry have been
paid for in whole or part by taxpayers---who sometimes then cannot
afford the high prices charged.

Whole new technologies are developed at public expense nuclear energy,
electronics, aeronautics, space communications, mineral exploration,
computer systems, the internet, biomedical genetics, and others only to
be handed over to industry for private gain.

Thus, AT&T managed to have the entire satellite communications system
put under its control in 1962 after U.S. taxpayers put up the initial
$20 billion to develop it. The costs are socialized; the profits are
privatized.

Under corporate capitalism the ordinary citizen pays twice for most
things: first, as a taxpayer who provides the subsidies and supports,
then as a consumer who buys the high priced commodities and services.
Overall, federal spending represents an enormous upward redistribution
of income.

As the Bible says (Matthew 13:12): "To them that have shall be given,
and from them that have not shall be taken even what little they have."
If this is the way we bring God back into public life, then let's hear
it for atheism.

http://www.zmag.org/sustainers/conte.../31parenti.cfm