Mandated Corporatism

by | Aug 6, 2019

In today’s helter-skelter  political environment – entrenched in polarization, tribes scurrying to their respective corners to double down on the latest popular sentiment – it’s hard to find a single subject all sides can come to an agreement on. Whether regarding tariffs, immigration, war, or the economy most people have dug in their heels in defense of their team’s approved narrative. And as expected, with the Democrat primaries underway, the political class is out in full force sounding the clarion call to rally the troops around the party dogma.

But something is missing. One topic remains off the table.

Not since the Occupy movement of 2012 has so much animosity been directly focused on “the millionaires and the billionaires.” The Progressive wing of the Democrat party holds no affinity for the “top 1%,” and their petty view of justice demands how, when, and why other people’s money is to be spent. They demonize and attack any business owner that can’t afford to provide an employee with healthcare or a “living wage” (a poorly defined term to say the least). These warriors of equity couch hop from one vacation home to the next while they continuously pass bipartisan spending bills, bailouts, and a variety of other legislation granting the corporations run by this enemy class hundreds of billions of dollars in subsidies.

The Cost

A 2012 Cato study found that every year $93 billion in subsidies went to large corporations. The USDA subsidized agriculture to the tune of $25 billion each year – the largest 15% of agriculture companies receiving 85% of the subsidies. Tax payer subsidies spread among businesses and investments in rural areas weighed in near $6 billion each year, and ethanol received around $10 billion each year. In contrast, a Time Magazine article reported social welfare paid out an estimated $59 billion per year.

At a glance it’s easy to see that corporations and businesses in general receive a substantial amount more in welfare than do the poor. Some may argue that corporations deserve the handouts since they add to the GDP of a nation while the poor suckle off the teet of society. Others may argue that the poor are systematically disadvantaged, and they need help due to the prejudices they face – class, race, or any other circumstance being the cause.

Those arguing in favor of the corporate welfare system are misinformed on just how GDP is determined and what significance it has, if any. Frank Shostak dispells the myth of the importance of GDP in his article GDP Growth is not the Same as Real Economic Growth:

So what are we to make out of the periodical pronouncements that the economy, as depicted by real GDP, grew by a particular percentage? All we can say is that this percentage has nothing to do with real economic growth and that it most likely mirrors the pace of monetary pumping. Since GDP is expressed in dollar terms, it is obvious that its fluctuations will be driven by the fluctuations in the amount of dollars pumped into the economy.

From this, we can also infer that a strong real GDP growth rate most likely depicts a weakening in the process of real wealth formation.

Once it is realized that so-called real economic growth, as depicted by real GDP, mirrors fluctuations in the money supply growth rate it becomes clear that an economic boom has nothing to do with real economic expansion. On the contrary, such a boom is about real economic contraction since it undermines the pool of real wealth — the heart of real economic growth. (Remember that the boom is because of the increase in the money supply growth rate, which gives rise to various bubble activities that undermine the process of wealth generation.)

The opposite argument, as honorable as being preoccupied with justice may be, is just as flawed. Would be do-gooders hem and haw at the possibility of the systematic oppression of impoverished Americans without realizing that they too are in the oppressed majority. The state moves in as stealthily as it may and extracts food, shelter, and clothing from their lives in the form of taxes in order to pay the welfare to the corporations and impoverished alike. Though they may wish their money spent on one group or the other no tax payer has a say in where the fruits of their labor will ultimately land.

The United States of Commerce

When drafting the constitution commerce was a foundational priority that needed to be addressed in the minds of the founders. The Articles of Confederation allowed the colonies and the people to control their property, trade, and commerce independently. The commerce clause of the US Constitution granted the federal government full authority over interstate commerce.

Article I, Section 8, Clause 3

[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Along with the eminent domain clause of the fifth amendment, and the power to tax and spend the constitution recognized the federal government as holding a monopoly on all land and earnings within its borders. Citizens became provisional deed holders; allowed full privilege of lands purchased for so long as they were perceived as the most profitable users of the land.

When James Madison spoke about protecting the minority of the opulent against the majority he set the very precedent the politically connected exploit in order to line their pockets with tax dollars. But upon further inspection of Madison’s quote it appears he was interested in protecting the land owner from plunder. Agrarian culture ruled the period, and Madison had no reason to expect this to end any time in the near future.

Less than one hundred years after the ratification of the constitution the federal government’s business interests began affecting average Americans. In the 1860’s 800,000 acres known as the Cherokee Tract in Southeastern Kansas was confiscated by the federal government. They then sold the land to Railroad man James F Joy at $1.00 An acre. Protests broke out when the public caught wind of 20,000 Cherokee settlers that had been kicked off of their homesteads, so the federal government allowed the settlers to buy their land back from “The Railroad King” for nearly twice the amount Joy had paid per acre. Corporatism was alive and well in the good ole US of A.

Is There a Solution?

Jefferson understood that once the fight for independence ended the rights of the general public would be trampled upon due to their attention shifting to their own livelihoods.

The spirit of the times may alter, will alter. Our rulers will become corrupt, our people careless. A single zealot may become persecutor, and better men be his victims. It can never be too often repeated that the time for fixing every essential right, on a legal basis, is while our rulers are honest, ourselves united. From the conclusion of this war we shall be going down hill. It will not then be necessary to resort every moment to the people for support. They will be forgotten, therefore, and their rights disregarded. They will forget themselves in the sole faculty of making money, and will never think of uniting to effect a due respect for their rights. The shackles, therefore, which shall not be knocked off at the conclusion of this war, will be heavier and heavier, till our rights shall revive or expire in a convulsion.

Corporatism, the preferred economic system of fascists, became the American economic backbone during the Progressive Era, and it persists today. The 14th Amendment has long been translated by the Supreme Court to grant personhood to corporations. This finding, along with the commerce clause and eminent domain, grants corporations the unchecked power to lobby and bribe politicians with substantial donations, the deeds of privately owned lands confiscated for profit, and to receive entitlements as a disadvantaged citizen may.

The use of general welfare in the preamble of the constitution has opened up a Pandora’s box of opportunity for the corrupt and greedy to sell the public and the Supreme Court on the benefits of big business receiving the benefits of subsidies to expand their wealth. The creation of jobs, international influence, and investment opportunities are straight out of an Ayn Rand utopia. Often ignored is the use of regulations, many times drafted by the corporations they are intended to oversee, to prop up some politically connected businesses by inflicting licenses, fees, and arbitrary barriers for entry that choke off the potential competitors with less capital and influence in the system. The monopolies of today are no longer a single entity that cornered a niche no one else has exploited, but a massive cartel of corporations and government that keep the entirety of the market to themselves while attempting to tax the ambitious out of existence.

While the left and the right enter the political arena to face off over medicaid, medicare, public housing, college tuition, food stamps, a minimum wage, and immigration; the political elite meet up with their opulent friends to strike deals on the next war, arms deals, overseas drilling contracts, data collection, media narratives, tariffs, land grants, billion dollar handouts, and how to continue the charade without exposure. Private banks enter into fraudulent contracts, eminent domain is used to rob farmers of their lands for pipelines, and inequality becomes more obvious by the day as all the profits settle in the pockets of the corporate overlords that have made their careers by leveraging political power. Engaging in the same old arguments over whether blue or red is the better team only further advances their realm of influence and power.

Given modern interpretations of the constitution not only authorize, but, essentially, mandate corporate welfare the challenge becomes how does the average person combat the practices that have become as American as apple pie. The average citizen must take control of the narrative. They must not allow the corporate media outlets to determine the parameters of discourse. They must refrain from deferring to the authorities that have served only themselves. It’s time people focus on the interests of state and business, dispute their legitimacy, and reignite human exceptionalism and the spirit of entrepreneurship.

If we are to believe that all men are equal under the law with unalienable rights and no one is more free than anybody else the discussion must shift. The next time the left is calling for tax payer funded programs and the right is chanting to build a wall remind them that while their taxes go to fund corporations, conglomerates, and cartels – those that live excessively privileged lifestyles – they are busy arguing over which minority or class should be punished. Remind them that retribution and revenge are not the same thing. Remind them that they must pay back their loans, and the same should be demanded of the corporations that make their living and fortunes receiving favors from the government that they are funding.

About Tommy Salmons

Tommy Salmons is the host of Year Zero, a podcast focusing on government abuse of power.
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