Trendevents -- The Sacred Cow: Corporate Welfare

An Analysis of Trends and Events in the News

Clyde Wilson

1995

Published in:

Social Trends Newsletters, Apr. 1994, No. 129

The Sacred Cow: Corporate Welfare

Labor Secretary Robert Reich recently made some remarks that were not appreciated by Big Business and corporate enterprise. He said that if those Americans on welfare are to make sacrifices, then U.S. companies should be stripped of tax breaks and other special subsidies.

It should be understood that the government's role under the present economic system is to do everything possible to promote and maintain the financial, industrial and corporate interests no matter what the cost may be. Corporate welfare has the highest political priority, and society as a whole gets to pay for corporate welfare in a number of ways. Welfare for the masses is not done out of kindness but to help business and agribusiness, mostly to reduce the glut of goods or commodities.

Without government subsidies, tax breaks and incentives, loans, bailing out businesses and financial institutions, collusion with the exploitation and giving away government resources (electrical power, forests, use of land, etc.), corporate enterprise and the superfinancial structure would have fallen like a rock long ago. There isn't anything, including the trillions of dollars spent on "defense" during the Cold War, that isn't in some way connected to enrich business and corporate enterprise.

Balancing The Budget Act Continues

Once again, like clockwork, the Congress of the United States and the Administration in Washington have put the balancing of the national budget at the head of their agenda for 1995. Considering that the national budget has not been balanced since 1969, and that the United States is now the largest debtor nation in the world, this performance by the political power brokers has become more than a repetitious mission impossible. But, as intended, it has over the years diverted the attention of the American people from the real social and economic issues and kept them from doing anything positive.

Much ado has been made about the decline in the deficit. It has gone down from $255 billion in fiscal 1993 to $203.4 billion for the fiscal year that ended September 30, 1994, and the Clinton Administration predicts that it will drop below $170 billion in the current fiscal year. Whether this was done by smoke and mirrors, cooking the books, using the "reserve" funds of Social Security, burdening the backs of the American people or shifting the financial burdens of the federal government to the state governments--is it as big a deal as claimed when all things are considered? An attempt to balance the budget for just one year when the nation has a debt approaching $5 trillion hardly deserves any accolades.

In spite of the declines in the national deficit, whether temporary or otherwise, the nation continues to be encumbered with an increasing interest on the national debt that has reached $324.2 billion for the year of 1994. The interest on the national debt won't go away as it continues to take a bigger piece of the annual appropriations pie.

If the U.S. Treasury found itself in a position where it could not sell government securities, the U.S. Government would not be able to function. What will happen to all of those nations, banks, financial institutions and investors (including Congressmen and government officials), who depend on and have part of their portfolios in U.S. Government securities, when the bubble bursts, confidence is shattered and there is no lender of the last resort to meet the crisis? And what happens when the interest on the national debt amounts to most of the annual national budget? For an economic system that depends on the creation of debt, balancing the budget would create more problems than it would solve.

Unbalancing The Budget To Take Care Of The Rich

The work of the Bipartisan Commission on Entitlement and Tax Reform, created by President Clinton, chaired by Senator Kerrey (D) and co-chaired by retiring John Danforth (R), to come up with savings to reduce the budget deficit virtually ignored tax expenditures--tax loopholes that primarily benefit the rich, which would cost the government $400 billion a year in lost revenues.

The commission's interim report seems to be more concerned with balancing the budget on the backs of the American people and the poor while taking care of only the rich. This is democracy in action by the people's duly elected representatives--of, by, and for the rich.

(Source of Information: Disabled American Veterans Magazine - Jan/Feb, 1995)

A Scientist Glut And A System That Is Strangling Science To Death

The post-World War II boom in American science funding that sustained the world's greatest expansion of knowledge, and what was considered an improvement in the standard of living, ended in 1987, and many scientific leaders see an ever slowing rate of technological advancement as a diminishing assault against disease, hunger and environmental degradation.

Since 1987, the long-sustained amount of federal funding for research stopped growing faster than inflation and has remained at about the same level ever since. But with budget cuts expected, scientific research and development will be affected accordingly.

The number of university-based scientists supported by federal funds has been increasing at a rate of 5.7 percent while the U.S. labor force grew at only 2.2 percent annually. As a result, there are now too many scientists and less federal funds to sustain the research and the development of particular technologies.

The unemployment rate among scientists with PhDs is now among the highest of all professions. The influx (brain drain) of foreign researchers has made the situation worse, creating a pool of professionals that far exceeds the number of jobs in academia and industry. In plain terms, there is a scientist glut. The number of researchers competing for federal funds has been soaring. While it was thought that there would be a shortage of scientists, the number of scientists grew from 240,000 in 1977 to 374,000 in 1989.

When the Congress passed a new immigration law in 1990, designed to give visa preference to foreigners with advanced degrees, the annual number of job-based visas nearly tripled from 54,000 to 140,000, with about 30 percent of the total being scientists.

It was thought at one time that anyone with a degree in science would have no trouble being hired or finding a job. But now, the jobs are not there any more. Many scientists just starting out with a Ph.D can expect to earn only $18,000 to $20,000 a year, providing there are any jobs available. And many of the best and brightest people are being turned away because there are not jobs for their professions, and the funds for scientific research has dried up. Near-term profitability has led to a significant downsizing by many of the major industries, eliminating thousands more jobs in research and development.

Source of Information: Series of articles by Boyce Rensberger, The Washington Post National Weekly Edition, January 9-15, 1995.

COMMENTS:

It is ironic that the scientists, technologists and engineers, supposedly the most intelligent and creative members of society, have to beg for funds to keep their research and the pursuit of their most innovative ideas from being shelved. Why is it necessary for the scientists, who have the expertise and the know-how, to subordinate themselves and compromise their findings to the whims of politicians and the corporate barons? They are the ones who are essential to the operation of this country's highly technological and infrastructural complex, not the politicians, the stockholders, stockbrokers, financiers and the captains of industry (CEOs).

Don't those of the scientific community realize that they are just being used, and their innovations and discoveries are being misused by the financial and corporate establishment merely to maximize profits and maintain a most highly inefficient and wasteful economic system?

Why don't the scientists and engineers stand up and demand a fundamental change in the system that will be in accord and compatible with the scientific method in the operation of the social and industrial mechanism? Or are they going to continue to use the excuse that they are too engrossed in what they are doing interested only in their professions, reputations and a pay check (jobs that are rapidly disappearing and lack security)?

Why don't they expand their horizons and put into effect their most innovative ideas and discoveries toward building a New America, or don't they have the intestinal fortitude along with their intelligence to make this one of science's greatest accomplishments? When will science ever get out in front and stay the course?