Real corporate welfare

Via QandO

From John Stossel's article in Reason Online:

Ronald Reagan memorably complained about "welfare queens," but he never told us that the biggest welfare queens are the already wealthy. Their lobbyists fawn over politicians, giving them little bits of money -- campaign contributions, plane trips, dinners, golf outings -- in exchange for huge chunks of taxpayers’ money. Millionaires who own your favorite sports teams get subsidies, as do millionaire farmers, corporations, and well-connected plutocrats of every variety. Even successful, wealthy TV journalists.

That’s right, I got some of your money too.

He goes on to describe just how that happened. Here's the answer he was given when he asked about why it's done the way it is:

Why does Uncle Sam offer me cheap insurance? "It saves federal dollars," replied James Lee Witt, head of the Federal Emergency Management Agency (FEMA), when I did a 20/20 report on this boondoggle. "If this insurance wasn’t here," he said, "then people would be building in those areas anyway. Then it would cost the American taxpayers more [in relief funds] if a disaster hit."

That’s government logic: Since we always mindlessly use taxpayer money to bail out every idiot who takes an expensive risk, let’s get some money up front by selling them insurance first.

He then proceeds to detail several types of government handouts that benefit primarily the wealthy. For example, he brings up the reason why the Coca Cola you get in Canada tastes better than that which you get in the US:

When public interest groups compile lists of corporate welfare recipients, a company called Archer Daniels Midland (ADM) is usually at the top of the list. You may never have heard of ADM, because its name rarely appears on consumer products, but it’s huge. Its products are in most processed foods.

ADM collects welfare because of two cleverly designed special deals. The first is the government’s mandated minimum price for sugar. Because of the price supports, if a soft drink maker wants to buy sugar for its soda, it has to pay 22 cents a pound -- more than twice the world price. So Coca-Cola (and almost everyone else) buys corn sweetener instead. Guess who makes corn sweetener? ADM, of course. Now guess who finances the groups that lobby to keep sugar prices high?

Because this artificial price elevation doesn't occur in Canada, real sugar is cheap enough that they can use it in their soft drinks.

Here's what I consider the most profound sentence in the entire article:

Letting businesses fail is vital for the creative destruction that allows the market to work.

I think those who are complaining about "tax cuts for the rich" are missing the point. The rich still pay a hugely disproportionate amount of the total amount of income tax collected by the IRS. But, as this article shows, it's true that some of them are getting handouts and kickbacks that they don't need to stay rich, let alone stay in business.

I also noted that he didn't focus on one political party. He mentions the Bush and Kennedy families, Richard Gephardt, and Alan Keyes. This is the kind of stuff that makes we with we had a real, viable third party in this country.