A textbook example of hypocrisy
Which American Socialist wrote, “The legitimate object of government, is to do for a community of people, whatever they need to have done, but cannot do, at all, or cannot, so well do, for themselves in their separate, and individual capacities”? He included “public roads and highways, public schools, charities, pauperism, orphanage, estates of the deceased, and the machinery of government itself.”
The answer: Abraham Lincoln in 1854. While some believed government should do no more than protect its citizens from insurrection and foreign invasion, Lincoln deemed that a “do nothing” abdication of responsibility.
Today, however, Republicans are having a great time accusing the Democrats of having a socialist agenda. Every authoritarian regime of the last century has justified its grab for power by saying it’s preventing a leftist takeover. In fact, the GOP has a long history of making simplistic comparisons between Democratic policy proposals and socialism. The socialism label was applied to the New Deal; it motivated Ronald Reagan’s case against Medicare, and it was the GOP’s weapon against Obamacare. No matter what policies the Democrats propose, they are labeled as socialists.
What we actually have is socialism for the rich, capitalism for the poor. That phrase appeared in Michael Harrington’s 1962 book The Other America, a study of poverty in America. Many believe that the roots of President Lyndon Johnson’s Great Society programs and his War on Poverty have their roots in this book. The Boston Globe editorialized that Medicaid and Medicare, food stamps, and expanded Social Security benefits were in part traceable to Harrington’s ideas. The biggest mistake Democrats can make would be to back away from bold ideas on healthcare, income inequality, and climate change.
Conservatives delight in proclaiming the wonders of capitalism and its free markets. What “free markets” do they have in mind? Could there be a connection between government tax breaks and subsidies for the rich and corporations, and how much they spend on lobbying and political campaigns?
The following are eight examples of corporate welfare. 1. State and local subsidies to corporations. A New York Times study calculated that state and local governments provide at least $80 billion in subsidies to corporations. Since 2012, Amazon has received more than $4 billion in subsidies and tax breaks for its warehouses and data centers. More than 48 corporations received over $100 million each. GM received the largest amount, a total of $1.7 billion extracted from 16 different states, but Shell, Ford and Chrysler each received over $1 billion each. In 2020, Pennsylvania lost $475 million in revenue as a result of various tax breaks
2. The Cato Institute (a conservative think tank) estimates that federal subsidies to corporations cost taxpayers almost $100 billion every year, including agricultural conglomerates, drug companies, and defense contractors. Companies in the fossil fuel industry are able to deduct millions of dollars from their tax bills using a variety of tax breaks. 3. The tax code gives corporations special tax breaks that have reduced what is supposed to be a 21 percent tax rate to an actual tax rate less than 13 percent, saving these corporations an additional $200 billion annually, according to the U.S. Government Accountability Office. 4. Special tax breaks for hedge fund managers allow them to pay only a 15-percent rate while the people they earned the money for pay up to 35 percent. The National Priorities Project estimates this costs taxpayers $83 billion annually, and 68 percent of those who receive this special tax break earn more than $462,500 per year, the top 1 percent of earners.
5. Indirect subsidies to the fast food industry cost about $243 billion each year because it pays such low wages that taxpayers must spend $243 billion to pay for public benefits – housing assistance, food stamps, etc. – their employees need. 6. The home mortgage interest tax deduction is in effect a huge subsidy to the real estate, banking, and construction industries, and the Center for Budget and Policy Priorities estimates that 77 percent of the tax benefit goes to homeowners with incomes over $100,000 per year.
7. The billions above do not include the government bailout of Wall Street after the Great Recession. The Atlantic estimated the Federal Reserve made $7.6 trillion available to banks, financial firms and investors. The Cato Institute estimates the final costs at $32 to $68 billion, not including the takeovers of Fannie Mae and Freddie Mac, which alone cost more than $180 billion. 8. There are thousands of smaller special breaks for corporations, businesses, and wealthy individuals. There is a subsidy for corporate jets, which cost taxpayers $3 billion a year. The tax deduction for second homes – including an expensive RV – costs $8 billion a year.
But when it comes to issues such as securing the right of workers to unionize, mandating a living wage, providing healthcare, protecting consumers, reining in the giant financial institutions, or mitigating climate change, Republicans would have us believe we’re on the brink of catastrophic socialism. A textbook example of hypocrisy.
Mark Berg is a community activist, a proud Liberal, and a former socialist. His email address is MABerg175@comcast.net.