Austerity's WINNERS!!! (Want To Know Why (and How) Food Stamps (SNAP) Are Being Used To Royally Rob the Middle Class and Shit All Over the Poor?)

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Austerity's Winners = The Corporate Class

July 24, 2012 

Common Dreams

"The corporate class" is the clear winner in the global austerity game, according to analysis from Zach Carter in the Huffington Post.

 

(photo: 401(K) 2012 via Flickr)

As austerity policies lead to cuts in government programs such as Medicare and public education, Carter writes that this "generates a tidy windfall for the corporate class, as government services are privatized and savings from austerity pay for tax cuts for the wealthiest citizens."

Blueprints for austerity in the U.S. are seen in measures such as the 2010 Simpson-Bowles deficit reduction plan, which "would allow U.S. companies to permanently avoid paying U.S. taxes on overseas income, including money stashed in offshore tax havens like the Cayman Islands," creating a banner situation for Wall Street banks while gutting Medicare and Social Security.

Dorian Warren, a professor of political science at Columbia University and a fellow at the think tank Roosevelt Institute, says that "Austerity policies are literally a redistribution from the bottom of the income spectrum to the top." Looking at state-level impacts, Warren states, "In Wisconsin, both wealthy people and businesses got tax breaks, while middle-class and working-class employees of the state essentially got crushed."

Carter also looks at global austerity as seen in countries such as Greece and Spain, which were given bailouts by the EU with harsh austerity conditions attached to them. But the banks got the bailout while the Greek people got the austerity. "The most vulnerable populations are harmed by the bailouts, while the well-paid financial professionals who made the deals to finance Greek and Spanish deficits in the first place continue profiting handsomely," Carter writes.

This is echoed by economist James Galbraith. "Imposing pain on Greeks is ... a blood price for the ever-repeated bailouts whose actual beneficiaries are said to be Greeks, but are in fact French and German bankers," said Galbraith.

As Wall Street Democrats join Republican calls for more austerity, writes Carter, the corporate class has more profits to come.

And for those who had hoped that the bailout level would at least get as far down as a few of the people harmed on the bottom (heck, maybe even help small businesses create some much-needed jobs?), well . . . you can stop holding your breath  now.

And I do mean N O W !!!

Because the games have only gone into high gear.

For people who depend on food stamps in order to make it through the month (yes, I know what I'm talking about), the farm bill's fate may prove critical.

It's really a big issue to consider in light of the soft media focus on the problems of the poor.

. . . administrative costs added by these privateers inflate the overall price tag of the Supplemental Nutrition Allowance Program (SNAP). And high program costs are prompting potentially deep legislative cuts to SNAP in the pending Farm Bill — when a record 46 million Americans use SNAP, of which 47% are children.

A major fear is that SNAP cuts could wrongly target the program’s central mission to feed the hungry, when cuts should target the private players who harness the program for their own gain.

Jaw-Dropping Corruption: America's 47 Million Hungry Mouths Are Just Another Corporate Cash Cow

Mark Anderson

July 22, 2012

An attorney's courageous report exposes just how ruthless and greedy big business is capable of being.

A unique, hard-hitting report just completed by a California attorney exposes a largely unknown federal food-stamp racket involving large grocery retailers, food manufacturing giants and other private players, including the Federal Reserve and JPMorganChase, which combine to channel food stamp spending into a gravy train for the heavy hitters in the food industry.

And the report’s author, Michele Simon, says administrative costs added by these privateers inflate the overall price tag of the Supplemental Nutrition Allowance Program (SNAP). And high program costs are prompting potentially deep legislative cuts to SNAP in the pending Farm Bill — when a record 46 million Americans use SNAP, of which 47% are children.

A major fear is that SNAP cuts could wrongly target the program’s central mission to feed the hungry, when cuts should target the private players who harness the program for their own gain.

“If we want to cut, let’s look at administrative cuts—not [necessarily] cutting the benefits themselves,” Simon told this writer. She’s disturbed that JP Morgan and the Federal Reserve are well positioned in this debacle. Yet, her 28-page report, for all that it reveals, just begins to explore this fathoms-deep issue, since critical data is being withheld by the USDA.

Over the last 7 months, Simon organized the report, “Food Stamps, Follow the Money: Are Corporations Profiting from Hungry Americans?” She wrote it because she felt there was more to the story after a 2010 debate over how SNAP dollars should be spent in New York City.

The city asked the USDA for a waiver in order to conduct a two-year trial “to prevent SNAP funds from being used to purchase sugar-sweetened beverages,” wrote Simon, who added, “Several [nine] states have proposed bills similar to New York’s approach, to modify SNAP-eligible items to promote health. But each time, the food industry fought these bills. To date, none have passed.”

The big picture is that once Congress approves the Farm Bill budget for the USDA, (which administers SNAP 50/50 with the states), the states, upon enrolling SNAP participants, contract with banks to get the EBT debit cards that SNAP recipients now use (replacing the old food coupons).

Card-carrying participants then enter a system wherein the major food manufacturers lobby the USDA to deny states the right to alter SNAP-purchase guidelines, so major food and beverage-makers (Mars, PepsiCo, Coca Cola, Kraft etc.) can reap the harvest of 46 million cardholders buying their products—including sweets with little to no nutritional value

The big-box food makers refuse to surrender this arrangement, for, as Ms. Simon sees it, if they and their cohorts at the major retail outlets allow diverse nutritional considerations requested by the states to decide policy, then SNAP’s vast purchasing power could be redirected not only toward nutritional food (a novel idea for a “supplemental nutrition” program) but also toward smaller food outlets, including farmers’ markets — which, according to Simon, currently receive perhaps 0.01% of SNAP purchases. 

She imagined how much SNAP spending could revive the economy if most of it helped local agriculture, spurred jobs and ironically even helped some people get off food stamps. Indeed, the nation’s food relief program started on the basis of helping the needy buy fresh produce to reduce farm surpluses, says the report, which adds:

“Given the huge stakes for the food and beverage industry in the debate over SNAP purchases, lobbying has played a critical role in shaping public policy. Unfortunately, due to reporting rules, it’s difficult to paint the entire picture of exactly who lobbied and how much money was spent against any one proposal [to limit SNAP purchases to real food].”

Meanwhile, JPMorganChase has EBT contracts with more states than any other bank and rakes in fees galore. “[SNAP] store purchases at the register go to JP Morgan ... which authorizes the request. And that [purchase data] goes to the Federal Reserve Bank and the Fed reimburses, say, Wal Mart,” explained Simon, who stressed that the USDA strangely refuses to release comprehensive SNAP purchase-redemption data so the big picture can be fully understood.

This issue has become so touchy that at least one journalist, Michael Morisy (MuckRock.com), is in hot water with the USDA for managing to obtain some of this data. But the truth cannot be contained forever. A newspaper, the Sioux Falls, S.D., Argus Leader, last year in South Dakota’s federal court district filed a lawsuit to try and force the government to release all redemption amounts, including how much the Fed reimburses the stores who accept EBT purchases, and how much SNAP money goes to buy specific products.

(Mark Anderson is a veteran journalist who divides his time between Texas and Michigan. Email him at truthhound2@yahoo.com. Simon, who compiled the SNAP report referenced here, is a public health lawyer and president of Eat Drink Politics, an industry watchdog consulting group. Contact her at Michele@EatDrinkPolitics.com.)

Comment:

Cyan Z  Collapse

 This article seemed to be very faux-progressive and potentially dangerous. It seemed to be advocating we restrict where SNAP recipients can spend their money. Not only would that increase administrative costs, it would be just another regulatory burden on the poor.

This is a position I expect from Newt Gingrich than someone who actually cared about the welfare of the poor. They poor do not need to be nannied and told when and what to buy to feed their families.

The real problem is that healthy food is so much more expensive than junk food primarily because of our piss-poor agriculture policy. The only reason we have HF corn syrup is because we give $5 billion a year to corn corporation and make natural sugar artificially more expensive. This winds up crowding out nutritious foods like broccoli driving the price up there. I recommend the documentary/book Food Inc. for anyone new to this problem. We need to end agricultural subsidies not hassle the poor.