January 19, 1999
by Norman Solomon
For many years, across the United States, huge quantities of tax breaks and subsidies have been going to corporations. Occasionally, the media spotlight falls on an example of how government policies stand Robin Hood on his head -- shaking down the poor and middle class while handing over the proceeds to wealthy individuals and big businesses.
Sometimes called "corporate welfare," this pattern of legalized rip-offs has been widespread -- yet little of the story seems to emerge in major news outlets. Overall, the coverage is sporadic at best. In mass media, the broader picture has been missing -- until a few weeks last year.
November brought a series of breakthroughs, thanks to two gifted reporters and a news weekly that allowed them to engage in rigorous journalism. All month, beginning with a cover story on "What Corporate Welfare Costs You," Time magazine featured extraordinary exposes by Donald Barlett and James Steele.
Corporate welfare, they write, is "a game in which governments large and small subsidize corporations large and small, usually at the expense of another state or town and almost always at the expense of individuals and other corporate taxpayers."
Barlett and Steele report that "the federal government alone shells out $125 billion a year in corporate welfare." Meanwhile, "a different kind of feeding frenzy is taking place" at the state and local level -- where "politicians stumble over one another in the rush to arrange special deals for select corporations."
In theory, the giveaways create jobs. In practice, the theory is hogwash: "Time's investigation has established that almost without exception, local and state politicians have doled out tens of billions of taxpayer dollars to businesses that are in fact eliminating rather than creating jobs."
Often, when localities roll out the gold carpet for firms, government coffers shrink -- and services for the public diminish. As Barlett and Steele document in excruciating detail, one of the common results is health-threatening pollution that goes unchallenged. The most vulnerable neighborhoods tend to be where low-income people live.
The big hogs at the tax-funded trough include popular brands -- Intel and Dow, General Motors and Mercedes-Benz, Exxon and Shell, UPS and Procter & Gamble, to name just a few. Some are the parent companies of media empires, such as Walt Disney (ABC), General Electric (NBC) and -- as the Time series acknowledges -- Time Warner.
"The king of corporate welfare may be Archer Daniels Midland," according to Time. "The global agricultural-commodities dealer has artfully preserved one of the more blatant welfare programs -- a subsidy for ethanol that has already cost taxpayers more than $5 billion in the 1990s. Some $3 billion of that has gone to ADM."
Year after year, Archer Daniels Midland has poured several million dollars into the nightly PBS NewsHour television show hosted by Jim Lehrer. ADM is also an underwriter of National Public Radio news. And the savvy firm buys a lot of image ads on commercial TV network programs that discuss political issues. Not surprisingly, ADM hasn't been subjected to much tough reporting on the national airwaves.
Corporate welfare is an important issue. But it can easily be spun in dubious directions. For instance, in an article addressed "To Our Readers," Time's editor-in-chief Norman Pearlstine throws a wide curve that breaks sharply downward and to the right.
"Ending corporate welfare as we know it is essential," Pearlstine contends. But then comes the English: "Rather than give corporations uneven and unfair exemptions, it may make more sense to simply do away with both corporate welfare and corporate taxation."
Now there's an idea that Time Warner can get behind: Stop taxing corporations!
Another hazard is the temptation to put all forms of government assistance in the same "welfare" category. It would be a big mistake to equate government aid to dependent corporations with safety-net subsidies for children, seniors and others struggling at the bottom rungs of the economic ladder.
Government should not be using tax dollars to help the rich get richer. But government has no business refusing to help Americans get the nutrition, health care, housing and other basics that are everyone's human right.
Welcome as it is, the occasional blockbuster expose of corporate abuses -- even in a media outlet as influential as Time magazine -- won't accomplish very much. Without an "echo effect," these issues are likely to remain muted.
The need to speak up and take action is a burden that falls on people in every community. Large corporations have been ripping us off for decades. Our initial efforts to force restitution will not be televised.
Norman Solomon is co-author of Wizards of Media Oz: Behind the Curtain of Mainstream News and author of The Trouble With Dilbert: How Corporate Culture Gets the Last Laugh.