The Year in Review, February 10, 2014

THE YEAR IN REVIEW FEBRUARY 10, 2014

What’s our government done for you in the last two weeks? Unless you are a lobbyist representing powerful interests or campaign donors like Robert or David Koch, the government has done very little for you.

The Farm Bill

Let’s start with a FOOD related story. The President just went to Michigan to sign the farm bill that had stalled in Congress for many months. A big reason why the bill stalled in Congress for so long is that the Republicans wanted to gut the food stamp program as a way to cut government spending on the less fortunate in America. This bill represents about $1 trillion in spending over the next decade. Historically, this bill has always contained a potpourri of special interest give always, some more related to farming than others. The special interest provisions still exist within the provisions of the 1000 pages of law.

So, in a bill that represents about $1 trillion of spending of the next 10 years, Congress decided to cut $8 billion dollars in food stamps over this time period. Food stamps are provided to eligible impoverished Americans. The cuts to the food stamp program will affect about 1.7 million people across 15 states. Eligible folks will lose $90 a month in food stamps. You can bet that none of these folks have any influence in Congress. Most are children and poor working mothers or families with either unemployed adults or low wage earning adults getting Walmart type pay.

The Republican budget minded Congresspersons, on the other hand, have no trouble dolling out $1.4 billion a year to 18 insurance companies to administer our Country’s crop insurance program. Yes, we taxpayers pay for insurance that private businesses (big corporate farmers) can purchase. The Federal government also pays 62% of the farmer’s insurance costs. Oh, I mean you, me and the rest of the taxpayers who pay 62% of these insurance premiums for farmers. Unlike the food stamp program, there is no means test for eligibility. It is just part of the welfare program for the rich and powerful. Of course some small farmers ride the coattails of the rich corporate farms and receive some of our governmental largesse. That way the President, Congresspersons, and Senators can say the Farm Bill helps the small farmer.

To top it off, the insurance friendly industry folks in Congress added a provision which bars the Agriculture Department from renegotiating the money paid to the insurance companies to procure their administrative services. Prior bills did not bar the Agriculture Department from negotiating the administrative costs paid to insurance companies and we taxpayers were able to save hundreds of millions of dollars in the past.  

So, here we have another example of the two faced liars in Congress claiming to be concerned about deficits and government spending. These hypocrites restrict the government’s ability to negotiate a better bargain on behalf of taxpayers when it seeks services from the private sector. This happens all the time. One such example comes to mind when Congress, at the urging of George Bush, did just that when Congress prohibited the Medicare program from negotiating with the drug companies for the cost of Medicare prescriptions. This has cost the government (the taxpayers) and those purchasing drugs billions of dollars. And, what a bonanza for the drug companies.

The farm bill is replete with giveaways to a laundry list of special interests solely because corporate lobbyists and campaign donors get special favors (favorable legislation) from the elected officials we vote into office. And, the bill is replete with provisions that benefit targeted constituents in various Congressional districts. You will never see government spending or deficit concern raised as a complaint when the special interests are concerned. Republicans in particular habitually raise concerns of too much government spending when it comes to programs designed to benefit the unemployed, the poor, students, and others who don’t contribute to campaigns or have money to hire high priced lobbyists.

The President and Congress felt great that the farm bill passed. The President talked about all the benefits and mentioned little about who won and who lost in the bill. Maybe our government should be required to provide a list of what companies, industries, and people receive from these bills and who are the losers. Maybe we should ask why should the taxpayer are asked to subsidize crop insurance. All businesses have risks and insurance bills to pay. I would like the government to help subsidize my insurance. There is something very unfair about these types of governmental policies. These policies are part of why we have income inequality in our Country.

GMO and the FDA

In a story that has received little attention, Dow Chemical has requested the FDA to approve genetically modified seeds that are resistant to herbicides. Farmers would purchase these seeds (Dow will market them under the name “Enlist”) and then be able to use herbicides and pesticides containing stronger versions of 2,4-d. The pesticide 2.4-D is best known as one of the chemicals in Agent Orange, the defoliant that the US recklessly sprayed across Vietnam. The Vietnamese people still suffer from Agent Orange and other pesticides because these chemicals caused cancers, birth deformities, and poisoned ecosystems.

A battle is now raging in the FDA. Organic farmers and proponents of sustainable farming are fighting the big chemical corporate behemoths Dow and Monsanto. We consumers are the bystanders who will either finds ourselves with fewer choices to eat real and unadulterated food or be forced to eat food genetically engineered with an extra dose of some cancer causing chemical. Small farms that grow organic crops also have to worry about the GMO seeds migrating and polluting their fields. Many countries have prohibited or restricted the use of pesticides like 2,4-D. The US again is way behind, mainly because of the influence and money that Monsanto, Dow, and other chemical company giants have in Congress.

Revisiting the Recent Freedom Industries Spill

Freedom Industries filed for bankruptcy within two weeks of the toxic spill that laid waste to the Charleston, West Virginia water supply while polluting the Elk River. It is time to pay a lot more attention to the bankruptcy laws in the U.S. There is a distinctly unfair quality and unequal treatment of people and corporations in the Bankruptcy Code. It is all right for Freedom Industries to go bankrupt in the face of having laid waste to the environment and causing damage to 300,000 people in West Virginia. On the other side of the coin, students who are financially unable to pay back loans cannot file for bankruptcy. You may ask why that is. The answer is that the financial giants who make those loans wanted the government to protect their interests and to prevent the student borrower from being able to avail him/herself of the protections of the Bankruptcy Code.

Companies, like Freedom Industries, routinely are purchased in what are called leveraged buyouts. In fact Freedom was purchased shortly before the toxic chemical leak. The ‘new company’ is usually loaded with debt, fails within a couple of years, and declares bankruptcy. Who gets really hurt? The workers who had pensions from the company before it was sold and bankrupted. Yes, workers become big losers. So, when the Mitt Romney types (hedge funds) mastermind these financially complicated deals, a lot of wealthy people walk away with a pot full of money, in part because they were able to bankrupt out large liabilities. The Bankruptcy Code could be written to prohibit companies like Freedom Industries from being able to get the benefit of bankruptcy protections when their losses result in damage to the environment or to persons damaged by such things as toxic spills.

The Bankruptcy Code could also protect workers who are the innocent victims of bad corporate practices. The Bankruptcy Code is replete with what are called ‘preferences’. Some creditors get a higher priority than others to collect on their debt in the bankruptcy proceeding. Detroit’s bankruptcy has highlighted this problem. Creditors (big financial institutions and the like) that concocted financial arrangements to sell bonds or advise Detroit to enter into ‘interest swaps” and the like are given a higher preference than employees who worked and earned pension benefits. Now, a bankruptcy judge may erase the obligation of the City of Detroit to pay those pensioners. Those people already performed their work. Their pensions were part of their compensation package. And now they will probably get screwed. The average pension of a Detroit retiree is under $25,000 per year. These folks depend on that money to live.

The Bankruptcy Code could provide for a preference to workers who have already earned the right to receive their pension. The Bankruptcy Code could also cease protecting big financial institutions that market their magical like deals that more often than not drives targeted companies, cities and districts into dire financial straights. If these financial companies were not given this added layer of protection in the Bankruptcy Code, they would be more circumspect about the effects on the borrower should their proposed deal end up causing a financial disaster.

Another Sequel to the Freedom Industries Toxic Spill

Within a couple of weeks of the Freedom Industries leaky tanks spilling toxic chemicals into the Elk River, a ruptured Duke Energy pipe in Eden, North Carolina resulted in the release of somewhere around 82,000 tons of toxic coal ash and 27 million gallons of contaminated water into the Dan River. This spill ranks as the third largest coal ash spill in U.S. history. Duke has at least 14 unlined coal ash ponds in North Carolina. Local residents, in particular, have become increasingly concerned about the maintenance and integrity of these all too often under regulated storage facilities. Like Duke, Freedom’s chemical spill was related to the processing of coal.

Coal is one of the dirtiest forms of energy. It continues to be a much used source of energy because it enjoys the protection of politicians who receive corporate largesse in the way of campaign donations and offers of employment to those who retire or to members of the elected official’s family. America’s energy policy is pathetic and stupid. Politicians do the bidding for the large energy companies. The health and safety of our citizenry is of minor concern to many of our elected officials.  Investing in sustainable alternative energy sources is given lip service but no serious consideration because the big energy corporations, whether coal, oil, or natural gas frackers would stand to lose their protected income stream. 

Conclusions to Ponder

Income and wealth inequality in America is a threat to our democracy. Where ever you look at what Congress does, it becomes sadly true that very few elected and appointed officials care about the health, safety, and welfare of the citizens. Big corporations and the wealthy enjoy an exalted status in the eyes of our politicians. The campaign laws and the Citizens United case have allowed the wealthy to buy elections. We citizens have a lot of hard work ahead of us if we want to save our democracy and make it work for all.