News Snipet 'Blog

So what's the answer, signing bad trade agreements and outsourcing all the jobs available to them to Mexico, China and India?

Or I have a good idea, we can have almost every job that is available to poor people do criminal background checks, and then, even stuff they haven't been convicted of will show up and they will not be able to get the job.

And then, you can call them lazy and keep thinking that it's the social welfare, not corporate welfare that is going to be the downfall of our society.

 

Hmm...you raise quite a few points here, that I'm not seeing a real connection to the article, but I will try to answer a little, Toad.

Protectionism is never good in a global market economy. It brings about bureaucracies, hampers the free market, and stalls civilization and technological advance. This is supported historically. Trade is the only thing that "economy" is built upon, therefore without trade, an economy would not or could not grow. Forgive me if I go on so, I used to teach economics and I was no fan of Keynes.

I'm not sure I understand the premise of your next thought.

Have a question for you. What is the difference between corporate welfare and social welfare. Its an easy question to answer.

Look forward to your comments, Toad, and thanks for stopping by to visit!

Regards,

-Jack

 

Not allowing Wal-Mart to open a store on an ancient burial ground or pyramid is not going to send the world economy spiraling out of control. Nor will eliminating steel tariffs on Russia, France and the UK, that will kill the economy of a place like Gary, IN or any other steel town in the US.

The difference between social and corporate welfare is a couple of things: 1 social welfare are the programs republicans who are against big government complain about and say is sucking the life and resources out of the US and its resources. 2 Corporate welfare is the stuff that they ignore when talking about big government and don't complain about the government’s interference because it benefits their corporations and the companies of which they hold stock.

Now the technical difference is as follows:
Social welfare consists of programs such as food stamps, public housing, social security, unemployment, public assistance etc.

Corporate welfare is what really costs this country, and it's basically the government giving money to, providing interest free loans, or eliminating tax burdens for the richest entities that don't need it.
Corporate welfare would be things such as the 800 billion dollar farm subsidy given to companies such as ADM for, of all things, produces corn syrup, which drives up the health costs due to all the obesity it creates. Other examples of corporate welfare would include the federal governments funding and bail out of Amtrak, GM (one of the largest corporations in the world), US Airways and United Airlines.
In 1997 fortune 500 companies posted earnings of 325 billion dollars yet still received 75 billion in taxpayer subsidies.(Cato Institute)
In 1996 General Electric received 15 grants for 20 million dollars, Rockwell Intl received over 25 million dollars, and Westinghouse received over 26 million dollars. Last I heard these companies weren't hurting for cash as much as a single mom in Detroit who has 4 kids.

Even with these subsidies eight companies that received more than 250 million dollars from the government cut their workforces by 329,000 people from 1990-1994.

Now I guess that is one way to make our social welfare programs bigger and costlier; simply take peoples jobs away and force them into these programs, while the rich at the top of these corporations get richer with the very tax money that was collected from their former employees.

 

Good answer, Toad. Just have to one detail though that people don't understand. Economic prosperity is brought about by increased business and any business stimulus boosts an economy and a nations wealth (Most people don't understand that wealth and standard of living is tied to GDP, not wage indexes, stock market, etc.) The true difference between social welfare and corporate welfare is that social welfare is disabling while corporate welfare is enabling. Corporate entities create economic flow through transactions, thereby contributing toward the economy. Social welfare removes resources through the economy contributing toward a lower GDP as productive units are removed from society. The effect of social welfare is like the article points out, it creates dependence in millions on the government (which is funded by the taxpayer, therefore you and me the people), and produces nothing.

I understand people's resentment toward "big business", but it is business big and small that creates wealth in all strata.

The example you cite about GE is a good one, but it fails to take into consideration how much more the government and individuals benefit as a result of Corporate subsidies and grants. (We won't bring up farm subsidies here:).

I hope this makes sense. Enjoy chatting with someone who knows what they're talking about!

Take care,

-Jack

BTW, enjoyed your blog! Thanks for directing me your way, Toad!

 

How is corporate welfare enabling, any more than social welfare? Corporate welfare enables these companies to pay their CEOs more, it enables them to be less fiscally responsible, I don't see any benefits to the people in the form of new technologies from companies who receive these subsidies (defense companies excluded), in fact, it's quite the opposite. Apple and Microsoft receive so such subsidies yet come out with new technology and a new product every month. GM has yet to produce a Hybrid car.

Look at Brazil with no Social Welfare; the poor rob the rich on the streets, which is disabling. With no social welfare these rich people that run these companies would be walking targets. I think there are several things wrong with social welfare, such as actual welfare checks, and the fact that you used to be able to get more money for every extra kid you had, but the bottom line is that we can't afford to send these people out in the streets to fend for themselves. I know people with college degrees that can't find jobs; do you really think that if one day we decided to cut social welfare that everyone would just go find a job? Sure Wal-Mart might hire them for 28 hours a week and no benefits, now that we are cracking down on them hiring illegals.

Corporate welfare is just as disabling. Look at Amtrak, I have done research but was unable to find out how much money the top dogs at Amtrak make but I am going to guess it's a lot more than what I make. Why would someone be allowed to make so much money when they receive money out of my taxes and they are unable to figure out how to make that company profitable on their own. Sounds to me like they don't deserve to have that job, if my office was not profitable, I would be out of a job, and I wouldn't be subsidized by someone with less money.

Look at the income of the CEOs and top brass at companies such as GE, Westinghouse, Rockwell etc., and then look at their stock prices and then ask yourself why they need money from the working class. If GM needs more capitol to invest, then maybe it should think about keeping a few million dollars a year in salary for the guy who is already making 14 million a year, not ask for subsidies, cut benefits for its blue collar workers or move their jobs to Mexico.

Speaking of GM why is it with all the money it has received from tax payers, Toyota and Honda, the car companies not operating on subsidies, were able to develop Hybrid cars and GM and Ford have yet to put one on the market? You would think subsidies and what not would be used to encourage development such as this, but all it does is reward a company for doing nothing new, other than closing down factories in the US and moving them to Mexico and increasing its compensation to its top brass.

In 1980 the average CEO made 42x the amount of his average worker, as of 2001 the average CEO is making 411x the amount of his average worker.

In 2002 the Median pay for a CEO increased 6% while corporate profits decreased 4% and stock prices fell 23%. Talk about getting something for nothing!

So who is really draining the economy; these assholes running the show or the people who receive public assistance, of which 40% over the age of 16 work at least part time?

 

Toad, I agree with you. You'd think Republicans wouldn't be in favor of any kind of welfare, much less corporate; it's not exactly pure capitalism! "Trickle-down economics" clearly isn't the answer either, since we've been trying that for decades!