Corporate welfare exceeds $100 billion, speaker says, and U.S. has 127 billionaires
Transcribed by Howard Rosenfeld and edited by Jenny Brown.
David Barsamian, whose Alternative Radio program is heard on over 100 stations around the country, marshaled an impressive array of statistics showing record wealth and inequity in the U.S. and pointed to the resulting erosion of democracy. Barsamian spoke in Gainesville on October 18 as part of the celebration of the third birthday of the Civic Media Center.
Barsamian cited the enormous transfer of public funds into the hands of private corporations through what has become known as "corporate welfare" (at least $100 billion a year) and compared it to the painful cuts to human welfare. "You hear all this stuff about there's no money ... It's such a lie! It's transparently false. But when we don't have our own organs of dissemination of information to get this out, people believe, yeah, there's no money so we gotta cut welfare." Barsamian stated. "Cut welfare? Welfare is like chump-change. $14 billion a year, one percent of the federal budget went to Aid to Families with Dependent Children." He said that if we had a more honest media the Welfare Reform Act would be called the "Welfare Annihilation Act."
But, he also stated that there are many examples of committed people have been breaking through the information blockade and getting out the information people need even while the media monopolies and dominate the airwaves. What follows is a partial transcript of his remarks:
"FDR said in 1937, that the test of our nation's progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have little. And I think that's a very inspirational concept and certainly one that we as a society have gotten more and more removed from. After the decade of greed which was the 80s has been succeeded by the decade of megagreed, which is the 90s. ... The rich have enriched themselves tremendously over the last 20 years. This isn't me speaking, by the way; this is the Wall Street Journal, Business Week, Fortune, Barron's, the New York Times business page, in business journal after business journal, they are just besides themselves with glee. They can't believe the kind of profits that they are generating and in fact, in 1995 at the end of the year, Business Week said that "many ate caviar." I guess you must of all partaken in that dinner. ...
On the 2nd day of this year, something very significant happened. The chair of AT&T, a man named Smith, announced the downsizing of 40,000 AT&T workers. Now this really created a splash because these were not the secretaries that take calls and the kids in the mailroom. These were mostly middle management, people who had been brought up on the American dream, 2-car garage, 2-story house in the suburbs, shop in the malls... So this really hit a jugular on January 2nd when those 40,000 AT&T workers were--to use a term that George Orwell could not even dream of--they were "involuntarily furloughed."
How did Wall Street react to 40,000 workers being laid off by AT&T? ...Well, they were simply delighted; the stocks went through the roof; the CEO of the company, Smith, got something along the lines of 810 million dollars in stock bonuses. So they made out like bandits. [They said] AT&T had to make these painful cuts in order to be competitive in the global environment, OK? In the first quarter of this year, AT&T net profits were 1.4 billion dollars. So that's how they are remaining competitive. And in fact, one of the big lies of media propaganda is that the U.S. is not competitive. In fact by every economic index available, the U.S. is the MOST competitive country of any industrialized nation in he world. And that's happened over the last 2030 years by beating unions into dust, by cutting back on wages, by hiring temp workers, there have been all kinds of mechanisms in order to ensure that corporate profits can be maximized.
$1.4 billion, now, we are not talking Steve Spurrier's salary here, which is only a million a year. I mean he, after all, is only a football coach. Another right-wing, rhetorical kind of axis mundi, something that they turn on all the time is of course, community and family values. Yet, their economic policies, which is the evidence that we have to measure their rhetoric by, not what people say but what they do, suggests that their is something quite contrary to community and family values going on in the country. ...
[For example] WalMart... the 3rd richest corporation in the United States based in Arkansas. If any of you saw the most recent Forbes list of the 10 wealthiest men in the U.S., well three of them have the name of Walton, they are scions of the Sam Walton dynasty. WalMart is an interesting case, it's number 3 on the Fortune 500. It employs 628,000 Americans. In fact, it is the 2nd largest employer now, in the country. Well, that sounds good, jobs, jobs, you know everyone needs jobs, but look at the nature of these jobs. What kind of jobs is WalMart creating? ...
They are mostly minimum wage or a dollar or two above the minimum wage. A third of its workforce is temp workers. What does that mean? Well, it means that WalMart doesn't pay for sick leave, vacations, pensions, forget about, people over 40, you remember pensions? Under forty, forget about it, they're gone. Sick leave, paid holidays and health care. Temp workers get none of these benefits. ... So, when Clinton goes on TV during the debates and beats his breast, ten and a half million new jobs, ten and a half million new jobs. Yes, ten and a half million new jobs, but what about the other types of jobs that were lost and what is the nature of the new employment? Much of it is temporary, much of it is just one night stands for employees who are able to work a short time and then have to move on. They become like migrant workers from job to job.
...The largest employer in the U.S. today, outside of the federal government, in the private sector, is not even WalMart, WalMart's edging up, right to the top. The largest single employer in the United States today is the Milwaukee-based Manpower Temporary Services. Over 700,000 temporary workers in their golden rolodex. ...
...The two fastest growing public housing projects--if I can use that term--in the U.S. are prisons and stadiums! Baseball parks! Basketball arenas! Football stadiums! Go to Jacksonville and see tax dollars at work. See corporate owners loading up their pockets with your monies... and laughing all the way to the bank. This is a new form of socialism. They get to socialize the costs of their spanking new stadiums and they get to keep the profits. It's not like later, OK, you lent me 50 million dollars, citizens of Gainesville, because you believed in me and you were going to create some jobs, great! So, we passed this bond issue or this sales tax and now I want to give you the money back. It never happens. They get to keep all of the profits. ... There's public subsidies but it's not going for the public benefit, it's going for private benefit. And the examples of this are extensive. Let me just give you a couple. For example ... how about the Georgia Dome? That cost taxpayers 214 million dollars ... The America Center where the St. Louis Rams football team plays. They held up the community of St. Louis for 290 million dollars. Coors field, right near where I live, 215 million dollars. You know what Everett Dirksen used to say. A million here, a million there, pretty soon it adds up to a BILLION!
Comisky Park in Chicago, Jerry Reinsdorf owns the Chicago Bulls, he's one of the richest men in America. What did he do? ... He said, I'm outta here. I'm moving to St. Pete, Tampa, where they have already built me a stadium. And they've promised me all kinds of tax rebates and all kinds of deals and infrastructure and I get to keep the popcorn money and the beer money and the parking lot tickets and everything, you better build me a stadium. And Chicago caved in. Tampa is still waiting to fill it's stadium, built by public funds, incidentally.
Nike was making sneakers in Portsmouth, Maine and a town in New Hampshire. They closed both of those factories and they moved where? South Korea, Indonesia, China. Why is Nike going to east Asia? Do they like the climate? Do they want to get away from New England winters, maybe, but if you look at it a little closer, it's very obvious why they went to poor third world countries where there are no unions, where there are military dictatorships, where what the generals say goes, where there is no ability to organize, where there is no enforcement of environmental rules or regulations. So they go into Indonesia and they set up all of these factories. Now there isn't a single Nike sneaker being made in the United States. OK, let's get into Phil Knight's head, OK? Who is now, incidentally, one of the new billionaires, one of the 21 new billionaires that we added last year, we now have 127 billionaires in the U.S. Phil Knight is one of them.
So let's get into Phil Knight's head, OK? He says, OK ... I left my American workers, I abandoned them in New England. But, the reason why I went to Indonesia was I'm gonna make cheaper sneakers and you're going to benefit. So those sneakers that you were paying a hundred, 125, 150 dollars a pair, you know AirJordan, they are going to come down dramatically, so that's my justification, sure I'm ripping off those women, they're getting 2 dollars a day, about fifteen cents an hour, but you the consumer are benefiting. OK, so what's the evidence? Go into any sneaker store and see if you can buy a pair of Air Jordans for less than 100 dollar or 150 dollars. There has been no benefit to you the consumer which really gives the lie to their whole corporate strategy. What they're really about is maximizing profit, not about delivering goods to you at a lower price. So Nike is doing it and Nike is prototypical of U.S. corporations that have no sense of loyalty, no sense of community, their loyalty is to Wall Street and to their shareholders. But what about loyalty to a community? What about a sense of collective? Is that all a corporation is? Is it, this is kind of a rhetorical question, does the corporations loyalty and concern for the shareholder exceed that of it's community in which it is based, in which it draws it's nourishment, from which it draws it's labor force? I think that's an important question to ask, that's a social question, not just an economic question.
If you go to where Auburn plays it's games, you'll find now in it's stadium a huge logo of Mercedes Benz which is right above the scoreboard in Alabama. So, you see you have movement of capital not just from the U.S. to Indonesia and China and Singapore, Thailand, etc. but you also have international capital moving to the U.S. for pretty much the same reasons. To get skilled workers here, who are not members of unions, in right-to-work states, like Alabama. Which again, right-to-work, it sounds good, right? Everyone wants a right to work. If we were to translate this, if we had tools of intellectual self-defense, right-to-work is translated as impossible-to-organize a union state. Then you'll understand what South Carolina is all about. Then you'll understand why BMW has moved into South Carolina. Why? Because they like the southern climate? Because they wanted to leave Bavaria? No, for the very same reasons: They don't have to pay the wages that they were paying German workers who are organized, who DO demand health care, who DO demand paid vacations and some of the amenities that their union movement has struggled and won for. So let's go back to Alabama and Mercedes, one of the richest corporation in the world. You may remember, they were a very integral part of Hitler's war machine. Now they are creating profits in another sector. This is from a radical left-wing journal which is where I get all my information, the New York Times business page. And I urge you all to read the business press because that's where you get the unvarnished truth. The propaganda is in the Sun, it's in the Tampa Tribune, it's on NBC, it's on CBS, it's on Nightline, that's the OJ trials, Michael Jackson, Susan Smith, Tanya Harding, Lorena Bobbitt, all of these to divert people's attention from what's happening to their lives. The fact that people are working longer and longer hours and getting poorer and poorer. Again, this is not me speaking, this is the business press. But when they write that, they think it's a good thing because they can maximize profits.
So, in Alabama, the article very sarcastically begins, "For Alabama, first in little but college football, the quest three years ago for the nation's only Mercedes Benz plant touched deep unrequited desires. The governor said (already you can feel the soap opera of this, 'deep unrequited desires'), they governor of the state said, "We're going to get Mercedes and we're going to make them love us." OK, well how did they get Mercedes? They competed against other U.S. states, right, where supposed to be in a union here folks, you know, they competed against other U.S. states who would offer the biggest deal? Who would give them free land, tax write offs, infrastructure, roads, an educated workforce, and on and on? Well, Alabama won. They expect 1,500 new jobs in the state. Now, the deal cost the taxpayers--now we're talking about people in Alabama, not one of the richest state's in the country to begin with--it cost the taxpayers of Alabama 300 million dollars in payments, in subsidies, in write-offs, in taxes never collected, for Mercedes. What did they get? They got 1500 new jobs. OK...1500 into $300 million comes out to $200,000 per job. If you were to do any kind of cost analysis, if you were to start a business and say it's gonna take me $200,000 for each job to create here, you would be laughed out of any building or any economics department. But this can happen in a situation were you have this kind of welfare for the rich. There's an even worse example. Let's go to Maryland where the state of Maryland has built a spanking new football stadium for the former Cleveland Browns football team that has been renamed the Baltimore Ravens. Their little package, they got off easier than Alabama, their little package only cost them $177 million to build a stadium and all the infrastructure, etc. How many new jobs created? 534 new jobs created. Estimated cost per job: $331,000 dollars. That's a lot of money, and it tells you a lot about what's been happening to the political economy.
John Jay knew what was happening. You remember John Jay, the first president of the Continental Congress. ... He said, "The people that own the country ought to run it or to govern it." And that's pretty much been the way the way the country has evolved over the last two centuries. It's been very much a benefit for the few and the rest of population is to fend for itself. Who are these people? Well, let's give them names in case you don't know them. GM, Ford, Exxon, WalMart, AT&T, General Electric, IBM, Mobile, Sears, Philip Morris, Chrysler, State Farm, Prudential, Dupont, K-Mart, Texaco, Citicorp, Chevron, Amoco, those are the names, that's where the wealth of the country is concentrated. And that wealth has increased exponentially in the last 20 years. ...
There is no such concept as limits to what you can earn or what you can make. This is an alien notion. But women should work for $4.75 an hour, they should work in sweatshop wage conditions. So there's lots of limits on the low-end but on the high-end, it's a banker's holiday. In other words, it's a paradise for them and through the media, which they largely own and control, you don't hear a lot of this kind of information or this kind of analysis being presented to people. Worker's wages, in case you haven't noticed, those of you who didn't eat caviar in 1995 and drink champagne in 1996 have been stagnant or declining for the last twenty years in a row! This is unprecedented since the civil war! Again, this is not coming from Left Business Observer in New York or some obscure magazine like Z or the Nation, this is coming from Business Week.
The percentage of national income going to wages is at an all-time low. So where is the money going to, you hear all of this stuff about there's no money ... It's such a lie! It's so transparently false. But again, when we don't have our own organs of dissemination of information to get this out, people believe, yeah, there's no money, so we gotta cut welfare. Cut welfare? Welfare is like chump-change. $14 billion a year, 1% of the federal budget went to Aid to Families with Dependent Children (AFDC). That's the generosity of the United States towards indigent people--to the most needy sectors of our population--to the down and out.
Corporate welfare, on the other hand, is astronomical. The low ball figure of corporate welfare, what Archer Daniels Midland gets, or the Sunkist Corporation or McDonald's or any other of these major corporations, the lowball figure is $100 billion dollars. That's from the Cato Institute, it's not from Alternative Radio. Now Ralph Nader's group, Public Citizen, estimates corporate welfare at $170 billion. The high-end figure from Citizens for Taxpayer's Justice in Washington, D.C. is a quarter of a trillion dollars! If any one of these figures were accurate, and let's err on the side of caution and say it's only $100 billion per year. The federal deficit would be wiped out! The budget deficit would be erased very quickly if those kinds of welfare payments to corporations were eliminated.
Now how are these welfare payments, how is that done? You see some of the examples, they're like municipal bonds are passed to renovate the Gator Bowl and that's the sales tax. You're paying more, every time you go to buy a quart of milk, you're paying more on the sales tax of that milk in order to fund the bond that the city fathers said we needed to have in order to build a new stadium so we could get the football team which was going to bring hundreds of jobs.
That's one example. But the main mechanism for corporate welfare is the tax code. That is the principal device of class warfare in this country today. It is how the rich are getting richer. It's not happening by magic. It's not happening by trickle-down theories and Laffler curves or some kind of free-market hocuspocus. Or someone told me today, 'these are cycles, they are inevitable business cycles.' What are we talking about here, gravity? ... Are we talking about the sun rising in the east and setting in the west? Are we talking about irrefutable scientific proof? Or are we talking about public policy that is made, that is enacted, that is passed by people who reportedly represent us? That are in our state legislatures, that are in our city councils, that are in Congress, that are in the White House.
The tax code has been radically transformed in the last 40 years. For example, again, I can cite sources if you like, try William Greider Who Will Tell it to the People or Bartlett and Steele in a brilliant book, America: Who Pays the Taxes? Or just read Fortune or Business Week. In the 1950s, corporations were paying 40 percent of all taxes collected by the IRS. Today, in the 1990s, given the level of corporate profits, you would think quite understandably that that must have just gone up astronomically because they're making money hand-over-fist, right? Wrong! The corporate percentage of taxes collected by the IRS today is between 8 and 10 percent. So there has been a dramatic drop-off in monies collected by the IRS. ...
Social Security, for example, has a cap at $60,000. So Warren Buffett, one of the richest men in the country, in the first minute of the first day on January 1st, 1996 or 1997, he pays all of his Social Security taxes and that's the cap on it. So the tax code has been radically overhauled in order to favor the wealthy corporations. They do this how? By organizing the political system to work and change policy in their behalf. This is not, again, something mysterious. It should be kind of transparent, if we had a democratic media where this information were readily available, it would be at all of your fingertips, everyone would have this information. But instead, we have a propaganda system here that would make Joseph Goebbels simply swoon in awe. When you think about what the Nazi's were able to do with their little radios and a few newspapers and magazines and torch-light parades in Nuremburg, they were small potatoes! What is available now to the corporate, political nexus is absolutely staggering.
That's the bad side of it, right? To sort of bring this to a close, well what can be done to reverse this scenario? People need to have institutions, they need to be grounded in their community. Things are not going to change overnight. This system did not occur in the last 30 days; it has nothing to do with Ronald Reagan, has nothing to do with Bill Clinton, it's the way corporate capitalism has evolved very logically, since it's inception and it's on a very steady trajectory, if you've been charting it over the centuries now. Accumulation of wealth, environmental degradation, concentration of monopoly, enriching a small percentage of the population, and on and on and these are trends. The thing that distinguishes this particular era that we are living in is that all of these trends have accelerated very dramatically. And that I would submit has occurred because of the complete hijacking of the political system. We don't have a democracy, we have a cashocracy and corporate dollars control the political process. Particularly at the highest levels. There are still possibilities for some things to be done at the county commission or city council levels, but as you go up and as you step in terms of political power, the state house, the Congress, the Senate, the White House you can forget about, the role and influence of money is predominant. And that has been accentuated over the last twenty years because the Democratic Party has folded itself inside the Republican Party. So the corporations, the rich guys, the people I named, they have two parties. The people have no party. There are nuanced differences between the two parties, but in terms of the existing system of power and privilege, they are virtually identical. There is no challenging the arrangements of the way the economic system is structured...
The telecommunications act of 1996 is one of the greatest thefts that has ever occurred in the history of the United States, and it is going up against some pretty stiff competition. You remember the railroads just walked off with the whole West in the Homesteading Act of the 1880s and 1890s? The giveaways that occurred during to the Vanderbilts and Astors and the Carnegies when all those fortunes were amassed? It wasn't through their creative entrepreneurial spirit which is what all of the propaganda is about. It's about government handouts which enable them to get started and to build their empires. ...
What happens in the summer of '95? There are all of these mergers and takeovers, Time Warner takes over Turner (CNN...), Disney takes over Capital Cities/ABC in a $20 billion merger, the largest merger of that kind, and the other one was Westinghouse, a major military contractor taking over CBS. Now what's interesting about this, not just that these were one megacorporation subsuming another megacorporation, was that under existing telecommunication law in the U.S., every one of those mergers were illegal. ... Illegal? Well, why would they then go ahead with that and risk penalties and possibility that it would be revoked? Because they own the political system, so at that very time when those mergers occur they were illegal under existing telecommunication law of 1934 which limits the number of outlets which created caps for the number of radio stations, TV stations, newspapers, that one corporation could own in a particular community. These corporations created these mergers and pushed through the Telecommunications Reform Act ... (If Jonathan Swift were alive, he would be unable to make a living satirizing this situation. Really, it's sad, he would be out there on I95, "Will satirize for food.")
One of [the Contract with America's] provisions was the overhaul of the telecommunications act which would enable corporations to not only become larger and larger and take over other corporations but also to have unlimited numbers of outlets in particular cities. Before, when telecommunications legislation or any kind of legislation was being drafted, the fat cats, the lobbyists would be standing outside the committee halls in the Senate and the House. And when your represnetatives would come in, they would say, "Hey, Joe, don't forget me, I took care of you last week, that house in Bal Harbor, that's yours. Take care of me, we got a vote coming up, Sanibel Island, you can have the whole island." That was the traditional way of doing it, but these guys, they took it to a higher level. They invited the lobbyists actually inside the committee room to draft the script and write, in this particular instance, the Telecommunications Reform Act of 1996. ... Senator Larry Pressler, who is the chair of the Senate Committee on Telecommunications, which was shepherding this bill through with the help of the corporate lobbyists; this is a man--I've been following his career fairly closely--who knows virtually nothing about telecommunications law, ergo, he gets the chair of the telecommunications committee. I mean, total logic is at work here. So, the bill is passed ... in early February of 1996. Well, what has happened since then? Let's not go to far from my own experience because experience is your best teacher, not something that someone is telling you. In Boulder, Colorado, we have one cable provider TCI John Malone, which is now owned by Time Warner. No competition. He raises the rates 25 percent. We have no recourse, there is no mechanism to address this. There is only one utility company in Boulder--misnamed Public Service (it's privately owned). There is only one gas and electric company. ... There is no competition. So where is this free market, level playing field that the rightwing likes to talk about? Again, their real dream, their wet dream is total annihilation of any kind of competition. They're about monopoly, they're about concentration, they're about leaving just a very few corporations on the top with lots of money and everybody else on the bottom to fend for themselves.
Ben Bagdikian, a very conservative journalist, write a book in 1983 called The Media Monopoly ... in which he said that ... there is something weird going on in this country, I don't quite know what to make of it, but more and more corporations are owning fewer and fewer media... about 50 corporations. He thought this was a bad thing for democracy... And I urge you to look at the reviews of Bagdikian's book when it came out in 1983--uniformely negative. He's exagerrating, he's a worrywart, he doesn't have faith in the freemarket system, he doesn't believe in capitalism, all of these things are just temporary, they'll all correct themselves and on and on, he was essentially dismissed as a kind of a leftwing nut ... In 1992, this leftwing nut wrote the fourth edition of his book and the number of corporations was now down to twenty. He's now in the process of editing the fifth edition, it's being published by Beacon Press, one of the few independent presses left in the country in Boston. In the fifth edition which will come out next year, the figure will be in single digits.
Earlier I posed a question about the responsibility of corporations. Another question I'd like to put out there [is] what are the communication needs of a democratic society? Are those communication needs being met when fewer and fewer corporations own all the instruments of propaganda? The radio, the TV, the magazines, the newspapers, the Internet and on and on? Are those needs being met? I kind of doubt it. I'd like to hear an argument that yes, those needs are being met, that our population is being well educated and wellversed from a variety of perspectives. I don't think that's happening. I think there needs to be a revitalization of the democracy from the bottomup. It's not gonna happen from the top. If you are waiting for Washington, if you are waiting for the Democratic party to reform itself, to rediscover it's New Deal roots, it ain't gonna happen! And it's never gonna happen from the ultra rightwing, which is the Republican Party. So it's time to build things from the bottom up. ... we need to create new mechanisms, new organizations, like the Civic Media Center, like Alternative Radio, like Fairness and Accuracy in Reporting ... There are many good models, Z Magazine, South End Press, Common Courage Press, AK Press, there are examples all across the country of models where people said enough is enough! ...
Alternative Radio's David Barsamian speaks at the third birthday of the Civic Media Center in Gainesville, October 18. Barsamian's radio program, which features dissident voices speaking on a range of topics, is heard weekly on over 100 stations in North America, including Classic 89 on Mondays at 12:15. He said he started the successful project with no experience in radio production and little money.
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