Corporate Welfare is Killing America

Corporate welfare is killing America. It is smothering our democracy and with it the once-vaunted American middle class. As Kevin Phillips observes in his new book, Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism, the elected leadership of both parties has gamed our system to fatten the profits of corporate capitalists, while shifting the risks of their failures on the rest of us.

Over the last 25 years, the Federal Reserve has catered to the financial industry, which contributes hundreds of millions of dollars to Washington politicians, by collectivizing the risk of big investors. As Phillips says, we citizens take all the risk "of collapsed currencies, flawed speculation, busted hedge funds or the greedy misjudgments of large banks or brokerage firms" (think Bear Sterns) while they keep all the profits when times are flush. Combined with upper-tier tax cuts, this corporate corruption has led to the widest divide between rich and poor since the pre-crash 1920s, a most ominous sign of a shrinking middle class.

Adding to this chicanery, the Bureau of Labor Statistics understates inflation by excluding from the Consumer Price Index such expensive items as gasoline and food. The real rate of inflation is 6 percent to 9 percent, not the officially reported 2.7 percent. This under-reporting allows the government to avoid automatic COLA (cost-of-living adjustments) to Social Security benefits, thus cheating deserving citizens out of billions of dollars of their rightful money. It also allows the Fed to set imprudently low interest rates, thus opening the spigot to the cheap money that greedy speculators turned into the subprime mortgage crisis.

Corporate capitalists love to preach "free markets," ignoring the fact that markets corrupted by such government manipulations are anything but free. They shout "personal responsibility!" when opposing government aid for the rank-and-file Americans who sweat for them, yet hypocritically reject it for themselves with the golden parachutes they use to flee the failed companies they helped sink.It is this wolf-guarding-the-henhouse phenomenon throughout our government that destroys our democracy.

When big money dictates government policy, including deregulation, bail-outs, kickbacks, no-bid contracts, war-making and even the brazen ability to write the laws that benefit them instead of the public interest (the ruse Bankruptcy Protection Act, for example), America ceases to be a free democracy, thus imperiling the middle class that so depends on it.America's middle class needs a government that acts in the best interest of all, not just those at the top.

Publicly financed elections, strict control of lobbyists and a prohibition of even the appearance of impropriety are essential reforms.

But, like a good doctor tending a sick patient, government must first do no harm.