Corporate Welfare Comes Back Under Scrutiny

$80 Billion; that's how much money states, cities and counties give to companies every single year, according to the New York Times. In their series "United States of Subsidies", which had its second installment today, the paper examines the costs and benefits of what the grants given to corporations, and finds the benefits accrue almost exclusively to the corporations rather than the local communities.

In the nineties, progressives helped brand these subsidies "corporate welfare", in an effort to counterbalance the war on the working class that right-wing republicans were waging at the time, especially against communities of color. At the time, former President Clinton cut many different benefits program as a result of the effective attacks that republicans directed towards certain groups of Americans who relied on these programs for survival, attacks which started under President Reagan but came to fruition under the stewardship of Newt Gingrich. And yet during that entire period, as the Times makes clear, companies were benefiting from billions in subsidies which rarely created benefits for anyone but shareholders.

The auto industry alone has received $13.9 billion in subsidies since 1985 but during the same period has closed 267 plants across the country, according to the Times' research. The articles from both yesterday and today's papers give examples of towns in Michigan, Ohio, Texas, Illinois and other states who fell over themselves throwing tax abatements and other grants to corporations that only a short time later would close up shop, taking with them the profits those communities had helped them achieve.

In New York State alone, we spend over $4 billion a year on these subsidies, much of it to some of the most profitable corporations in the world. One of the top recipients is JP Morgan Chase, who received $157 million last year in property tax abatements from both the state and New York City. By population, the is $210 per New Yorker that's going to corporations in the form of subsidies. These funds are not going to the mom-and-pop stores that are struggling to make it through the tough times; they're going to the corporations who are shrewd enough(or unethical enough) to constantly threaten to move their operations elsewhere, forcing states like New York, Connecticut and New Jersey to play a zero-sum game with each other where the only winners are the corporations themselves.

The news today is full of talk about the "fiscal cliff", where taxes will go up for nearly all Americans if Congress can't reach an agreement on the budget. The core argument is over whether to generate revenue(i.e. increase taxes on the rich) or to cut spending. For Republicans, cutting spending means first and foremost cutting the programs which are lifelines for the working class. This means not only the "safety net" programs like food stamps or social security, but also funding for education and other programs which help to create greater opportunities for the working class children that benefit from them.

We rarely if ever hear a debate on the subsidies we continue to dole out to corporations who give so little back in return. These subsidies help them create profits, which these companies then either give out to corporations or use to increase salaries for those at the top of the organization. There are not nearly enough new jobs created, and more often than not, the companies find ways to "cut costs" which translates into cutting jobs. If we're going to talk about cutting spending in this country, rather than starting with the programs that benefit people who need it the most, lets look at corporate subsidies. For the past three decades, we've been paying for the rich to get richer; it's time to make decisions that benefit all Americans.