Corporate Welfare: How Billionaires Enrich Themselves at Our Expense

 

Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill)

By David Cay Johnston

Penguin Group (2007)

Book Review

This book is an encyclopedia of the complex system of taxpayer-funded subsidies government grants the business elite to curry their political support. This support occurs in three main ways: as campaign contributions, as jobs (at the end of a civil servant’s government career) and outright bribes. According to Johnston, corporate welfare is as old as capitalism itself. Adam Smith (who Johnston quotes frequently) refers to corporate subsidies as “bounties.” He warns against them in his 1776 Wealth of Nations.

The author, who views corporate welfare as a major cause of America’s growing inequality, details a number of examples in which federal and state subsidies transformed ordinary entrepreneurs into billionaires.

  • Sports stadiums – between 1995-2006 sports team owners persuaded state and local authorities to build more than 50 new major league stadiums and countless minor league stadiums. In many cases, the state or city seize private land via eminent domain on which to build the stadium. Johnston maintains that running a sports team is always a money-losing proposition – in nearly every case any profit is almost identical to the size of the subsidy. Former president George W Bush made his first millions by buying the Texas Rangers and using his father’s influence to pressure the city of Arlington to seize 200 acres of private land via eminent domain for a sports stadium.
  • Walmart – founder Sam Walton built his retail empire by hiring lobbyists (Johnston calls them “bounty hunters”) to grant him free land via eminent domain, to “gift” him the sales tax he collects from customers and allowing him to raise capital via low cost government-sponsored industrial bonds. In total, Walmart has been granted more the $1 billion of government subsidies in 1/3 of their stores and distribution centers. In addition, as of 2007 they had (legally) avoided $4 billion in property and state income taxes.
  • Health Maintenance Organization (HMOs) – Nixon launched the first non-profit HMOs in the early seventies. His goal was to reduce health care costs by enrolling patients in repaid care in where doctors worked on salary. In 1981, Reagan phased out the federal loans and loan guarantees Nixon enacted to help subsidize HMOs and allowed them to become for profit businesses.All over the country, CEOs sold and traded shares in HMOs built at taxpayer expense.The CEOs of non-profit hospitals and Blue Cross plans quickly followed suit. Johnston calls it the greatest legalized theft of public assets in US history.

The Luxury of Dental Health in Third World America

Dental Health

Press TV (2017)

This documentary highlights the millions of Americans unable to access dental care owing to the prohibitive cost. With a routine dental checkups costing a week’s salary on average, healthy teeth have become an unaffordable luxury in the US.

The US is the only developed country that refusesĀ  to provide basic health care for all its residents. Prior to the enactment of the Affordable Care Act (Obamacare) in 2010, poor Americans unable to access medical services experienced an average of 45,000 preventable deaths annually.

Total preventable deaths dropped initially (to 18,000) with the enactment of Obamacare. Since then skyrocketing premiums – coupled with Trump’s repeal of premium subsidies – have caused a rebound in the number of uninsured Americans.

California used to provide free dental services for indigent residents under the state Medicaid program. However this was discontinued in 2009. Although indigent children are still theoretically eligible to receive DentiCal services, reimbursement rates are so low only a handful of Los Angeles dentists participate in the program.

The film focuses on nongovernmental efforts to improve dental health in the Los Angeles Hispanic community. Ironically dental health deteriorates in Mexicans after they immigrate to the US – and move from rural areas to inner cities lacking access to fresh fruits and vegetables. Thus an essential component of the University of Southern California (USC) dental health outreach program involves a campaign to increase urban gardens and nutrition education in schools.

The USC Ostrow School of Dentistry also recruits volunteer dentists to run free dental clinics for children, the unemployed, the uninsured and the elderly (of all ethnicities).

In addition to to the USC program, the Los Angeles Hispanic Dental Association has established a fund to support Spanish-speaking students in pursuing dental degrees and foreign-trained Hispanic dentists in jumping the bureaucratic hurdles of obtaining a US work permit .