Welfare is an interesting word. Like so many other politically-charged terms, it means rather different things to the different people who use it.
To the self-defined “makers,” welfare is a “handout”–government takes tax dollars that have been paid by responsible, productive folks and gives them to needy people who may be unfortunate but are probably just lazy or unmotivated. These handouts breed dependency, and they’re morally suspect.
Of course, as many observers of government largesse have documented, when you look at the numbers, most of the “takers”–i.e., the recipients of most of the dollars redistributed by government– are corporations. Big ones, that pay their CEOs, other executives and shareholders extremely well.
The “handout” definition
..is what we’ve been trained to believe, largely by politicians who smirk patronizingly at poverty but pay billions of your dollars to corporations…
Welfare is a many-headed dragon, but you won’t comprehend how big corporate welfare is unless you mine the data.
The independent, nonpartisan watchdogs at www.goodjobsfirst.org compiled the data. Those facts detail 453,000 business subsidies handed out by 289,000 state and local governments, and 164,000 freebies from the federal government.
It’s a $70 billion a year pipeline of public money.
The Chicago Tribune has explained corporate welfare better than I ever could:
Illinois has given away $4 billion over the last few decades with little proof the investments actually produced more jobs, more independence in the hands of working people or even benefit to the state at large. That narrative plays well in Indiana, because the Illinois reputation as a wasteful, even corrupt, welfare black hole is enhanced.
Luckily, Indiana isn’t like that.
In fact, Indiana is far worse.
While Illinois was handing over $4.8 billion, Indiana was sweetening the pot with $7.2 billion. Only six states — including giant economic forces New York and Michigan — have spent more local money this way.
Indiana governments are frugal with you, but less so with big-bucks corporations. The state gives away this money as direct cash, indirect subsidies, publicly financed bonds at low or no cost and tax abatements on the theory that average Hoosiers benefit from priming the economic pump.
Here’s how hard you’ve been pumping.
Indiana has dispensed 7,758 of these welfare goodies since 1986, the vast majority since 2009. (Emphasis added)
So who are Indiana’s “takers”?
You have given $703 million to General Motors. Community Health Systems of Tennessee, which owns Porter Regional Hospital and eight other hospitals in Indiana, has gotten $403 million.
Michelin has 308 million of your dollars. Eli Lilly hauled off $200 million. Indianapolis even gave real estate giant Simon Properties $180 million to build a downtown shopping center. Duke Energy took $204 million. Nestle and its Edy’s Ice Cream operation took $199 million in property tax deferments. Honda got $166 million.
These welfare checks are necessary, as the theory supposes, because they guarantee jobs that otherwise would not exist, although no one much tracks the jobs or the provable tax benefit….
Sometimes the sweet deal does not even pretend to produce jobs.
I guess welfare dollars are only morally suspect and socially addictive when poor people use them to feed their children.
15 thoughts on “When It’s for Me, It Isn’t Welfare–It’s Economic Development”
“Of course, as many observers of government largesse have documented, when you look at the numbers, most of the “takers”–i.e., the recipients of most of the dollars redistributed by government– are corporations. Big ones, that pay their CEOs, other executives and shareholders extremely well.”
Wasn’t it Romney who made the brilliant statement “corporations are people”? This is why, it qualifies them for Welfare. I am still incensed that he gets a $70,000 tax deduction for his wife’s dancing horse…who incidentally did NOT win in the Olympics. My 88 year old friend lost her Medicaid assistance with Medicare in 2014; her Social Security check amount is buried deep below minimum wage. She and her daughter pool their SS checks to survive, the daughter’s disability check is low enough to qualify her for a few food stamps but disqualifies her for Medicaid and she is 2 years from Medicare. What will happen to my friend when her 88 year old mother dies; who knows? We do know the government doesn’t know or care; they have those corporations to support. And that dancing horse of Romney’s.
I have pointed out in this forum a couple of times that there is no effort to hold those handing out taxpayer money to businesses accountable by comparing the actual number of jobs created and the wages paid to the jobs promised as the money was awarded. In a state which wants to drug test food stamp recipients and can unilaterally stop food stamp benefits to those they deem able bodied without a second thought to the families affected, failure to apply the same standards to corporation receiving these benefits seems almost criminal.
The republican controlled state government is unaccountable because there are no consequences; they keep winning because they’re republicans.
Disgusting figures indeed.
And Lilly gets even more than that through refundable R&D credits. In a recent article about Jeb Bush in the New Yorker, I gained an insight into how Republicans and Democrats differ with respect to “welfare.” The author of the article asked Governor Bush how he felt about the failure of some of his education privatization efforts. The response, “It will shake out.” When millions go to the wealthy to fund a failed project, its just the way the world works. When any money goes to unemployment compensation, food stamps, etc., it enables poor people to stay dependent on the government.
Both government and businesses employ people. People in general have a huge range of abilities to contribute to their employer. The result of all of that joint and collaborative effort is the output of all of goods and services that we believe make our lives better than our ancestors.
Society has to figure out the details of that economic equation like how to divy up and distribute the output among the people, what to do with individuals who can’t for whatever reason contribute, and how to organize the effort to maintain adequate productivity.
All societies have decided that currency is the major tool to keep track of all of that. While the popularity of that tool suggests its usefulness it is only to the degree that people agree to follow the established rules for its use.
I say all if this merely to point out the fact that the currency tool obscures to many of us the relative simplicity of the basics of economics. How to get people to contribute to the full extent of their capabilities by investing in developing them; how to direct the collaboration to the production of the optimum set of goods and services, how to motivate individuals continuing efforts, how to value our earthly resources in a way that makes use of them sustainable, how to distribute the produced goods and services in the way that contributes most to society.
Viewed like that I think that we can agree that we have not been all that successful in defining the rules for that system here in America.
It’s clear now that our current set of rules are not sustainable. That means that corrections will be made. Our problem is to determine how the new system addresses the limitations of the old system and how to make the transition in the most efficient way.
In other words politics. At one of the times when we need politics to perform well we have screwed up our political system seemingly beyond repair.
Please do not forget about the Pacers and Colts. They grabbed over a billion tax dollars when you consider for the most part, We the People, finance the construction and maintain their Sports Palaces. The Pacers receive additional subsidies. This Corporate Welfare for the Pacers began under Lugar, and expanded under Hudnut to include the Colts, Gold$mith, Peterson and Ballard have continued the Corporate Welfare. The City County Council rubber stamps it all.
We have a Republicrat Party here in Indianapolis and Hogsett is a part of it. Our intellectually vacant Media print and TV will never oppose this brand of Corporate Welfare in fact they act as cheerleaders for it.
So only going by the short list in the post, that’s a tad over $2 billion. How much do we spend on food stamps? Ill bet a lot less. I would love to see the breakdown per taxpayer on these figures. For those folks who complain about state taxes, that might be an eye-popping revelation.
No politician ever has offered up an alternative to social welfare. Given that, why all of the talk about it?
To keep the voters from talking about corporate welfare and the subsidizing of the wealthy.
Let us not forget the billions in corporate welfare to Walmart and the fast food franchises in the form of food stamps and income assistance for their low wage employees.
One of the BEST columns ever explaining corporate welfare and backing it up with examples. Clear and understandable. Perfect title.
“When It’s for Me, It Isn’t Welfare–It’s Economic Development”
It will be on my fb page in the days and weeks to come…. thank you!
A former mayor of a Hoosier county seat told me of all the tax abatements and incentives he used to develop and lease or sell properties in a business park. The businesses came, but when the abatements and incentives expired, the businesses moved to another community to repeat the process. To say the least, the former mayor felt like he and his community were taken to the cleaners, but he asked, how do we compete with others who offer incentives if we don’t.
Perhaps it’s time for national legislation outlawing all tax abatements and incentives for private profiteers, including professional sports. We have so many aging and unmet public property needs (water and sewer lines, roads, schools, parks, dams, etc.) that a good justification can be made for doing so. For those who wish to move jobs overseas and are not prohibited by climate from doing business here, we should find some way to prohibit or proportionally limit access to U.S. customers. If our customers have no jobs, they can’t make many purchases or pay enough taxes to maintain our own public infrastructure and services. We’ve passed strict time limits on welfare to those who are hungry. It’s time to do the same for corporate welfare.
“There oughtta be a law…” This was a common phrase decades ago, now relegated to crossword puzzles. People thought of laws as means to resolve problems. I would suggest our Congress and state legislatures—naive though I may be—ban subsidies to professional sports entities or to businesses. The former go to billionaires, the latter at best cause State and local governments to compete with each other in the now-popular “race to the bottom.” And—what about military expenditures? The budget for the military rests untouched, except to be increased, with little evidence to show our status of “Cops of the World”—see Phil Ochs’s classic protest song—has resulted in net benefits to anyone except large corporations and the groups we wish to combat. If we cut a third of that budget and shifted the monies to public (not private or charter) schools and other infrastructure, I think we would be better off. January 20, 1981, was the date when things began to go “South.” That was when government was not the solution, but the problem—a cute turn of phrase by a person who never read Eldridge Cleaver, I would wager, if such bets were legal.
Senator Sanders is often labeled a socialist by the radical right. However Republican politicians embrace corporate socialism as they happily transfer tax dollars from the middle and lower classes to parasitic rich “corporate citizens” and rich individuals. Senator Sanders is a democratic socialist, the radical right is comprised of corporate socialists.
Remember also, handouts to the poor promote indolence.
On the other hand, we must have zero inheritance tax so that the children of our “makers” never have to worry about maintaining their upper class lifestyle.
We could also contrast fear of being fired for the masses and Golden Parachutes for the elite.
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