Welfare through the looking glass

The New York Times Economix blog reminds us that the word “welfare” hasn’t always had negative connotations:

…“the image of the poor person in the 1930s was the agrarian farmer, down on his luck, but not complaining.” Think of Tom Joad, the protagonist of John Steinbeck’s novel “The Grapes of Wrath.”

Starting in the mid-1960s, however, that image began to change: poverty –- especially welfare — became seen by many as largely an African-American phenomenon. It was also during this decade that the word “welfare,” which previously did not have a negative connotation, became “a political epithet.

As the blog notes, however, poverty wasn’t actually a “largely African-American phenomenon”.  There have always been more whites than blacks on welfare.  The blog blames this misperception on “the media”.

I suppose that’s plausible.  But where did the media get the idea?  My bet would be that they got it from the conservative political movement.  Conservatives have always disliked social programs and discovered decades ago that they could disrupt them and defund them by appealing to racial fears and hatreds.  Not incidentally, this gained a lot of votes too  (see Nixon–southern strategy; Reagan—welfare queen).

By promoting the “misperception” conservatives did indeed end the federal government’s primary welfare program, Aid to Families with Dependent Children (AFDC) by enacting the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Henceforth there would only be Temporary Assistance to Needy Families (TANF).

Twelve years later we realize that the “misperception” about race and poverty wasn’t the only thing we didn’t understand about the conservative approach to welfare.  Not only did they transform welfare for the little guy.  They transformed it for the big guys, too.    The wealthy and powerful have always received outsized welfare payments in the form of subsidies, protection from competition, and so forth.  But under the new conservative plan, the wealthy began to receive massive public assistance.  Consider the 2003 Medicare Modernization Act, the 2005 Energy Act, two major tax cuts, just for instance.  As the Bush years came to a close the federal government was presiding over perhaps the largest welfare program ever attempted.  None of it temporary (or at least not intended to be).  None of it contingent on work or need.  None of it contingent on the existence of children–dependent or not.  And the vast majority of it benefiting the rich.

Of course, none of the programs were called “welfare”.  It wasn’t Aid to Pharmaceutical Companies in Need of Executive Bonuses Act, or Exxon Relief and Responsibility Act, or the Wink and Nod as Financial Executives Loot a Housing Bubble Act.  But it was welfare nonetheless.   However the recent economic downturn and collapse of the capital markets has made it more difficult to disguise the welfare payments.

Investment bank and insurance company executives who last year extracted hundreds of millions in cash out of their businesses based on what we now know were phony paper profits, now prostrate themselves before the taxpayers, begging for relief.  And the relief is in the hundreds of billions of dollars in guarantees and cash infusions.  By way of comparison the TANF program operates out of the government’s petty cash fund, costing taxpayers a mere $16.5 billion per year.

The spectacle would seem ludicrous except that the executives demanding the bail outs know they hold the economy hostage.  “Fork over the dough, buster.  Or the economy gets it.”  I think organized crime perfected this technique long ago.  First, seize control of a company, max out the credit lines and pay the cash to yourself; then torch the place, collect the insurance money, and walk away.  The CEOs appearing before Congress are at the insurance collection stage (“we need the money to rebuild—for the good of everyone!!”).

If this keeps up, welfare for the wealthy could start to develop some negative connotations.

Fortunately for the conservative movement, their welfare/extortion scheme is unraveling at exactly the moment that they have been relegated to minority status throughout government.  Thus they can return to doing what they do best:  complain about irresponsible government spending (welfare!) without having, as Sarah Palin might put it, actual responsibilities

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2 Comments

Filed under corporate welfare, dignity, radical right

2 responses to “Welfare through the looking glass

  1. donnafairy

    Excellent post!

    But regarding whether poverty is an African American phenomenon, I think that the perception comes, in part at least, from poverty rates. According to the US Census Bureau: “Poverty rates in 2007 were statistically unchanged for non-Hispanic Whites (8.2 percent), Blacks (24.5 percent), and Asians (10.2 percent) from 2006. The poverty rate increased for Hispanics (21.5 percent in 2007, up from 20.6 percent in 2006).” If I read this right, one in four African Americans is in poverty (as defined by the US Census Bureau), while only one in twelve whites is in poverty. So, if I am interrupting this correctly, it seems that blacks are three times more likely to be in poverty than whites.

    I agree that conservatives have used these statistics to link their hatred of social programs to racism.

  2. steve

    I checked the Census Bureau stats and it looks like there were 25 million white people living in poverty (annual income < $21,000 for family of four), and 9 million African Americans. So the typical person living in poverty is white. However, and this surprised me, if you look at at the tables at TANF, it looks like the typical recipient of TANF money is black – 37% to 32% for whites. Hmmm. And the number of people receiving it pretty low. Only about 5.5 million. So, if there were 37 million people living on less than $21K a year (family of four) and only 5.5k receiving TANF, I wonder what you have to do to qualify for that program.

    http://www.acf.hhs.gov/programs/ofa/character/FY2005/indexfy05.htm

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