In December 2005, the reactionaries who are running the government and ruining
the country decided to cut about $42 billion from the human services budget over
the next few years. Most of the cuts will come out of the hides of the very poorest
among us. The victims include persons afflicted with disabling diseases who already
have trouble trying to live on a monthly federal pittance.
But there is another side to this Scrooge story. There are others among us
who are treated most handsomely by Washington. I am referring, of course, to
A central function of the corporate capitalist state is to maintain
and advance the capital accumulation process. This it does by (a) taxing the
many to subsidize the few; and (b) privatizing the public wealth, specifically
the land, airwaves, mineral deposits, and other natural resources that are nominally
the property of the American people.
In the 1950s, the Eisenhower administration sought to undo what conservatives
in those days called the "creeping socialism" of the New Deal. So
they handed over to private corporations some $50 billion (or $200 billion in
today's dollars) worth of offshore oil reserves, government owned synthetic
rubber factories, public lands, public utilities, and atomic installations.
During that time, the federal government also built a multibillion dollar interstate
highway system that provided the infrastructure----and an enormous indirect
subsidy---for the trucking and automotive industries. The practice of using
the public's money and resources to subsidize private enterprise continues to
this day. It is variously estimated that every year, the federal government
doles out hundreds of billions of dollars in corporate welfare, in the form
of tax exclusions, reduced tax assessments, generous depreciation write-offs
and tax credits, price supports, loan guarantees, payments in kind, research
and development grants, subsidized insurance rates, marketing services, export
subsidies, irrigation and reclamation programs, and research and development
The government leases or sells at a mere fraction of market value billions
of dollars worth of oil, coal, and mineral reserves. It fails to collect hundreds
of millions of dollars in royalties, interest, and penalties. And it sometimes
gives the companies the right to purchase the land title for a nominal fee.
The government pays out huge sums in unnecessarily high interest rates on the
billions it has borrowed from private creditors (the national debt). It permits
billions in public funds to remain on deposit in private banks without collecting
It lends out billions at below-market interest rates. It tolerates overcharging
by firms with whom it does business, and provides long term credits, and tariff
protections to large companies. It pays out billions to reimburse big corporate
defense contractors for the costs of their mergers.
The government gave away the entire broadcasting spectrum valued at $37 billion
(in 1989 dollars)--instead of leasing or auctioning it off-thereby giving the
big networks nearly five times the broadcasting space they previously controlled.
Every year, the federal government loses tens of millions of dollars charging
"ranchers" below cost grazing rates on over twenty million acres of
public lands. These "ranchers" include a number of billionaires, big
oil companies, and insurance conglomerates.
Over the past five decades, at least $100 billion in public subsidies have
gone to the nuclear industry and many billions worth of federally funded research
and development has passed straight into corporate hands without the government
collecting a cent in royalties.
The U.S. Forest Service has built almost 400,000 miles of access roads through
national forests---many times the size of the entire federal interstate highway
system. Used for the logging operations of timber companies, these roads contribute
to massive mud slides that contaminate water supplies, ruin spawning streams,
and kill people.
The U.S. Agency for International Development (AID), spent over $1 billion
in taxpayer money over the past decade to help companies move U.S. jobs to cheaper
labor markets abroad. AID provided low interest loans, tax exemptions, travel
and training funds, and advertising to the corporate outsourcers. AID also furnished
blacklists to help companies weed out union sympathizers from their work forces
in various countries.
In any one year, many billions in subsidies go to agribusiness producers of
feed grain, wheat, cotton, rice, soy, dairy, wool, tobacco, peanuts, and wine,
with relatively little going to small agrarian producers. Subsidies to big commercial
farms encourage wasteful water practices and increased toxic runoffs into rivers
and bays from pesticides, herbicides, and chemical fertilizers.
The Government Accountability Office (GAO) estimates that agribusiness uses
legal loopholes to circumvent subsidy limits, thereby collecting more than $2
billion in unjustified payments each year.
The federal government subsidizes the railroad, shipping, and airline industries,
along with the exporters of iron, steel, textiles, tobacco, paper, and other
products. It doles out huge amounts in grants and tax incentives to the big
petroleum companies to encourage oil exploration.
In the 1970s, several major petroleum companies leased acreage in Alaska for
oil exploration, paying $900 million for public lands that yielded $50 billion.
Numerous medications marketed by the pharmaceutical industry have been paid
for in whole or part by taxpayers---who sometimes then cannot afford the high
Whole new technologies are developed at public expense nuclear energy, electronics,
aeronautics, space communications, mineral exploration, computer systems, the
internet, biomedical genetics, and others only to be handed over to industry
for private gain.
Thus, AT&T managed to have the entire satellite communications system put
under its control in 1962 after U.S. taxpayers put up the initial $20 billion
to develop it. The costs are socialized; the profits are privatized.
Under corporate capitalism the ordinary citizen pays twice for most things:
first, as a taxpayer who provides the subsidies and supports, then as a consumer
who buys the high priced commodities and services. Overall, federal spending
represents an enormous upward redistribution of income.
As the Bible says (Matthew 13:12): "To them that have shall be given,
and from them that have not shall be taken even what little they have."
If this is the way we bring God back into public life, then let's hear it for
Michael Parenti's recent books include Superpatriotism
(City Lights), The Assassination of Julius Caesar (New Press), and most recently,
The Culture Struggle (Seven Stories Press). For more information visit: