Allan Powell: 'Free lunches' cost the taxpayers

September 21, 2011|By ALLAN POWELL

Each of us at one time or another has heard the pronouncement that "there is no such thing as a free lunch."

However, Pulitzer Prize-winning investigative reporter David Cay Johnson, in "Free Lunch," provides abundant evidence that there are many getting just that. Eventually, the bill has to be paid by someone, and the taxpayer is that someone. To reinforce the point, Johnston's subtitle is, "How The Wealthiest Americans Enrich Themselves At Government Expense (And Stick You With The Bill)."

His first account describes how Bandon Dunes, a very plush golf course developed along Oregon's Pacific Coast, was the pattern followed throughout his book. He writes, "This is our story, not of one free lunch, but of many banquets at which billions and billions of your dollars are being served to the richest among us." Mike Keiser, a Chicago businessman, was able to secure four subsidies that enabled him to create a very-spacious playground that is now being visited by thousands of corporate officers and guests transported by corporate jets.

Johnston makes it clear throughout that the subsidies are awarded by city, state and federal agencies using tax money paid by citizens who might never visit a golf course, basketball arena, or football or baseball stadium. Moreover, there are cases in which public parks and private homes are savaged to enhance the wealthy who profess to be staunch supporters of "free" markets and opponents of government "giveaways." Indeed, this whole history is one of greed thinly veiled by rank hypocrisy. A glance at several cases used by Johnston will illustrate how the "free lunch" system of "corporate socialism" works.

The system is not hidden; it is openly praised by all of the participants. In 2000, George W. Bush, then a candidate for the presidency, announced at a Waldorf Astoria dinner of the "haves and the have mores" that "some people call you the elite. I call you my base."

George Steinbrenner, late owner of the New York Yankees, was especially adept at getting financial favors with the help of well-positioned political friends. Not one for small play, he manipulated his way to the transfer of two small public parks to be used as the site for a new stadium. The public share of this cost was estimated at $600 million.

This transfer of benefits from the many to the few was a switch of public property into private ownership. This has happened in other large cities and was accompanied by a reduction of funds that resulted in the deterioration of city parks. To provide a cover of respectability to these land grabs, the proponents of minimal government had a fully developed ideology to dispose of public parks completely. The Cato Institute, a well known right-wing think tank, called for "the outright abolition of public ownership and transfer of the parks to private parties." Steinbrenner, like most "corporate socialists," actually got a "free banquet."

There is usually a sad and tragic human interest story attached to these swaps and subsidies that wrenches one's heart. Many hard-working people get crushed and left behind. One such case was that of Kim Blankenship, who owned a small auto and truck repair shop in Toledo, Ohio. Unfortunately, the site of her small shop was adjacent to the land on which Chrysler was planning to expand their Jeep plant — an investment of $1.2 billion. No less than 82 homes and 16 small businesses were sacrificed to "progress," including Blankenship's property. Many of the homes were classed as slums as a means to possess and destroy.

Enraged at the loss of her business, Blankenship sued and the case eventually worked its way to the Supreme Court. A majority opinion ruled that she had no standing to sue because she could not show "any judicially cognizable harm." The fact that her business earnings dropping from $25,000 to $2,000 a month was not a "judicially cognizable harm" seemed strange logic to Blankenship.

Sporting goods dealers Cabela's, Bass Pro, Gander Mountain and Walmart have used the same formula for success. (Fairness requires the mention that Gander Mountain has ceased the quest for the "free lunch.") Representatives of Cabela's went to Hamburg, Pa., to meet with town officers to negotiate the possibility of building a huge sporting goods store there. As the consummate promoters, they made it clear that they would consider other locations if appropriate incentives — such as subsidies and tax benefits in the millions of dollars — were not offered.

Few community politicians could resist paying "tribute" and were seduced by the promise of all the huge store could offer to a small town. Negative side effects were minimized. Jim Weaknecht, owner of a "mom and pop" sporting goods store, was driven out of business. He is now employed as a manager of a grocery store, and his wife has two part-time jobs to support their family. Jim is naturally angry. His complaint is understandable: "This is not free enterprise. They are not building their business by their own means whatsoever. They are using the government for their own benefit."

It is amazing how many "rugged individualists" who profess to be lovers of the "free market" actually are on the take for a "free lunch."


Allan Powell is a professor emeritus of philosophy at Hagerstown Community College.


The Herald-Mail Articles