December 7, 2001Volume CXIII, Number 10
Published by the Associated Students of Pomona College

Copyright 2001
The Student Life


Economic Stimulus Package Equals American Corporate Welfare

By PETER DOUGLAS
Staff Writer


It is gradually becoming clearer that President Bush’s "War on Terrorism" will not be fought solely by blowing up "strategic targets" (and sometimes hospitals) in Afghanistan, or by giving disorganized tribal governments destructive weaponry. No, every single American can fight this war simply by going to the mall. In addition to the massive, anonymous signs on highways proclaiming "United We Stand," there is also alarming propaganda that commands us as a nation to "Fight Terrorism- Spend Money." Now President Bush, with the support of Republicans in Congress, has proposed an economic stimulus package that proposes to significantly cut taxes on corporations. Bush claims that by pushing for this corporate tax cut he is "fighting for America’s workers." Looking at the situation closely, however, reveals that the only thing Bush is fighting for is the corporate welfare system that is already so firmly entrenched in the United States.

Looking at Bush’s proposal it seems that he is once again making a fool of himself by talking about things he doesn’t understand. How can tax cuts for corporations, the largest and wealthiest companies that dominate American business, improve the lives of workers? It seems like a clear contradiction. Yet this has been the logic of conservatives for at least the last twenty years, the idea of "supply-side" or "voodoo" economics, that if the wealthiest members of society become wealthier they will get the economy moving and poorer people will become wealthier as well.

The problem with this idea is that the people getting richer at the top aren’t willing to share their increasing prosperity with those below them. In 1998, Alfred A. Bartlett conducted a study of profits and wages in the period from 1989 to 1997. Bartlett found that corporate profits grew 4.2 times as fast as the economy, and that profits grew 25 times as fast as wages. Obviously the corporate profits were not being spread throughout society in the way they were supposed to. Bartlett concludes his study by writing, "the irony of this enormous disparity is that it exists in what is widely identified as a ‘healthy economy’." This raises the question, "How much longer can our nation afford a healthy economy?" Bush is proposing his economic stimulus package as a way to get our economy healthy again. Yet as we’ve just seen, a healthy economy isn’t going to help the workers Bush is claiming to represent.

Part of the rationalization for these corporate tax cuts is to create jobs to make up for layoffs after September 11 and the economic insecurity that followed. Yet no one asks why these corporations were so ready to lay off thousands of workers after the attacks. Yes, the corporations had to cut costs since we are in the middle of a recession, but they have many different types of costs; why is it that labor is always the first to go? Why are there always funds to build new skyscrapers and give CEOs a seven-figure salary, but not enough to keep the workers who make the company run employed?

Bush seems to be sure that as long corporations are doing well they will have the best interests of American workers at heart. Yet during the last decade, when the economy was booming, corporation after corporation ditched their American workers to take advantage of cheap labor in developing nations. Many of these corporation’s leaders are probably hungrily eyeing our operations in Afghanistan, knowing that once we have an American-friendly government firmly in place there, there will be yet another country full of people willing to work for dirt cheap making American products. Bush’s economic stimulus plan may well create some jobs in the United States, but those jobs will disappear just as quickly as soon as a new economic downturn or free trade agreement comes around. If Bush were really fighting for American workers, he would provide them with job security, not simply with jobs that come and go every time the stock market bounces.

Bush’s plan is really just another example of the corporate welfare that has become so prevalent in this country. We always brag about how our wonderful free market system is the best in the world, yet the market really isn’t that free. Instead of a survival of the fittest system where corporations that can’t keep up are replaced by others that are more adaptive to a changing economy, the government consistently bails out the biggest industries when times are hard. For years the government has subsidized timber, agriculture, and energy corporations in order to keep the prices of their products artificially low. Just a few days after September 11, Congress passed a massive subsidy for the airlines to keep them afloat during tough economic times. Now Bush is all set to throw more money at his corporate constituency, all in the name of "fighting for America’s workers."

The whole idea of focusing on strengthening our economy in the face of terrorism is flawed. Asking Americans to spend large amounts of money on things they don’t need to "fight terrorism" isn’t about patriotism, it’s advertising. In World War II the government asked citizens to conserve in order to support the war. Now they ask us to wastefully spend in order to build up our sagging corporations. There is something seriously wrong when "the land of the free and the home of the brave" is willing to impose egregious limitations on civil liberties but will use any means necessary to ensure a strong economy. And what do we mean by a strong economy? Is it one in which everyone earns a decent wage and enjoys a high quality of life, in which our economic institutions serve all of the people? Or is it one with a big GDP? It seems that Bush and most of our leadership desperately want more money to move around in this country, but they aren’t terribly interested in where it moves. Bush can talk about fighting for the workers all he wants, but his economic stimulus package won’t help the workers and it won’t fight terrorism. All it is going to do is help out his buddies in the corporate sector.



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