KENNEDY: ‘Makers’ take their share

The “makers and takers” narrative—promoted most prominently by Paul Ryan and eagerly adopted by Tea Party activists—is just the most recent manifestation of a persistent American fable that encourages people who believe they “stand on their own two feet” to aim moral indignation and opprobrium at those they believe are “sucking at the public you-know-what.”

What is so ironic about this simplistic construct is that the self-proclaimed “makers” are recipients of by far the largest percentage of government largesse. (About $52 billion is spent on social welfare programs, including programs like Social Security and Medicare that benefit rich and poor alike; in 2006, $92 billion went to corporate subsidies alone.)

The self-proclaimed “makers” just don’t see it that way. What they get is their due; what that other guy gets is charity.

Stunning as these numbers are, benefits enjoyed by us privileged folks aren’t limited to the oft-cited examples of crony capitalism or tax loopholes or even the immense amounts in outright subsidy enjoyed by favored enterprises. It goes much further, and is frequently a product of well-meaning public policies.

I was reminded about the multiple ways in which we taxpayers subsidize the “haves” while I was reading a fascinating book about housing policy: “The End of the Suburbs: Where the American Dream is Moving.”

The mortgage interest deduction provides nearly $400 billion in subsidies to homeowners each year, propping up the market for single-family homes. Renters, of course, enjoy no such assistance.

The unintended consequences of Federal Housing Authority mortgages have been amply documented, for years. Its regulations encouraged new construction to the detriment of repairs and improvements to existing housing stock, encouraged redlining (making it much more difficult for African-Americans to buy homes), and (by stipulating that homes had to be built far from “adverse influences” and in areas of “economic stability”) favored suburban over urban homeownership.

It wasn’t just FHA. Suburban development has been subsidized by everything from highway construction to artificially low gasoline prices. William Wimsatt wrote an article for the Washington Post a couple of years ago in which he detailed—and rebutted—five “myths” about the suburbs: Myth No. 3 was, “The suburbs are a product of the free market.”

Taxpayer subsidies for businesses are everywhere: from the public schools that educate most American workers, to the “free” highways over which we ship our goods (if you ship by train, no such luck—pardon the pun, but you pay full freight), to the food stamps and other social safety-net benefits that makers scorn even while those benefits supplement, thus subsidize, the below-living-wage compensation paid by Walmart and its ilk.

The next time you hear a Tea Party crank fulminating over the cost of the hated “Obamacare” and its outrageous requirement that we all chip in to keep poor folks from dying, you might consider the fact that long before passage of the ACA, 70 percent of all medical costs in the United States were being paid with tax dollars. From medical research to medical education to Medicare and Medicaid to emergency room services to the uninsured, taxpayers paid for it all.

We just did it in the most inefficient possible way—a way that also, conveniently, allowed us to maintain the fiction that we had a “free market” health system. We didn’t, and we don’t.

What we have is an unfortunate attitude: If a public service benefits me, it’s a natural outgrowth of the market. If it benefits poor people, it’s socialism.•

__________

Kennedy is a professor of law and public policy at the School of Public and Environmental Affairs at IUPUI. She blogs regularly at www.sheilakennedy.net. She can be reached at skennedy@ibj.com. Send comments on this column to ibjedit@ibj.com.