The Other
"Welfare Queens"
By Rick
Finley
March 2000
The problem was a tough one for the
Martin Marietta Corporation. With their deep love of
their employees, they had to find the money for a Smoky
Robinson concert ($263,000), $20,000 dollars worth of
golf balls. After that, they still had to scrounge
around to find enough money to throw a $7,500 Christmas
Party.
The New York based Ecology and
Environment, Inc. was in a similar fix. They decided to
spend $243,000 on "employee morale". In
addition to this, they wanted to spend $37,000 on
activities such as tennis lessons, bike races, golf
tournaments, and other fun things.
These companies seem pretty generous.
The average American worker, observing these activities,
would probably wish they could work for these companies.
What this worker standing on the outside doesn't realize
is that he is already a part of these fun activities.
How? One might ask. What could he have to do with a
company that he has barely heard of. Nothing, except
that he is paying for all of those fun activities he
cannot enjoy. That's right, he actually gets to pay for
them! All of the aforementioned programs were paid for
by our over-protective, over-intrusive government, which
translates into greater debt on taxpayers--they're just
one small part of our enormous corporate welfare system.
A long time ago a few
businessmen decided they were tired of playing fairly in
the arena of the United States' capitalist market, so
they figured the best way to beat their competition was
not to produce a better or cheaper product, but to have
the government help them out. With this in mind,
corporate welfare was born. Every major cabinet
department funds different private industries. In some
cases, such as the Department of Agriculture, almost all
money goes to support private business.
Corporate welfare helps pay for the
costs of running ski resorts in Aspen, Colorado, hotels
in Hilton Head, South Carolina, and casinos in Las
Vegas, Nevada. In 1994, the Forest Service spent $140
million building roads through national parks, cutting
down trees which timber companies were only too happy to
remove. Over the past 20 years, over 340,000 miles of
roads have been built by the forest service, mainly for
the benefit of logging companies. Corporate welfare also
funds computer corporations, auto manufacturers, and
just about any other industry that can get its hand out.
Advocates of corporate welfare claim
it spurs economic growth, creates American jobs, levels
the playing field between American and foreign
competition, and maintains industries which are
important for national security. Unfortunately, it does
none of the above. It creates huge monetary loses, both
to the government itself and to the consumers who must
pay extra for the cost of products whose prices are
raised by the companies the government is protecting.
Corporate welfare has still not turned
out to be an asset. For one thing, the government is a
distressingly bad chooser of companies to support.
According to the General Accounting Office, the
delinquency rate of the government loan programs is
eight percent, while the delinquency rate of private
organizations is three percent. Added to this, the
corporate welfare system is grossly unfair. It is by no
means open to all businesses, only politically connected
ones. Of 400 classified farm commodities, around two
dozen of them receive 90 percent of the funds.
According to Federal Election
Commission (FEC) data compiled by Common Cause, eight
Fortune 500 firms that were multi-million-dollar award
winners of the Advanced Technology Program or the
Technology Reinvestment Project in 1994 were also large
Democratic campaign contributors.
This practice is not limited to
Democrats, however. Both Clinton and Bush have been
dogged advocates of corporate welfare. In the midst of
the 1992 presidential campaign, Vice President Dan
Quayle announced to citizens of Michigan that a $250
million plan to upgrade the M-1 tank would launched in
that state. Before the campaign, the Bush administration
had argued the tank was unnecessary.
Corporate welfare takes the
impartiality out of government and business. It costs
taxpayers $85 billion dollars a year, almost half of
what is spent on welfare for the poor. Trade
restrictions caused by corporate welfare cost consumers
an additional $80 billion dollars a year, a regressive
cost, for it hits the poor much harder than the rich. It
is unconstitutional, for nowhere in the Constitution is
the government given the power to support business.
Corporate welfare does not create
jobs. It helps one specific industry or company while
harming all the others around it. Until this practice is
eliminated, the citizens of the United States will
continue to pay the costs of situations caused by the
relationships of rich businessmen with their well funded
congressmen.
Copyright © Rick
Finley, at rfinley@mail.vt.edu
3-30-96 All rights reserved
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