3c hapter - Index of

52 Locavesting
and they can draw on deeper reserves to weather a downturn.
They can also promote “loss leaders” to gain a competitive edge.
Due to their size, they are better able to absorb increasing regulatory
costs, which cost small fi rms much more on a per- employee
basis. And, although they need it least, our biggest corporations
are the benefi ciaries of generous public largesse.
This is not good old Darwinian survival of the fi ttest. This is
the powerful and well- connected getting a generous helping hand
from the government.
U.S. taxpayers fork over almost $125 billion each year in subsidies
to U.S. businesses—the equivalent of all the income tax paid
by 60 million individuals and families, according to Public Citizen,
a nonprofi t, nonpartisan group based in Washington. The subsidies
come in different forms, including tax breaks, incentives, and
direct government payments to offset research and other activities.
And they go to some of the richest corporations on the planet.
Oil companies including BP, ExxonMobil, and Chevron benefi t
from billions of dollars’ worth of subsidies a year. Cutting just nine
of their tax subsidies, as proposed by the Obama administration,
would save $45 billion over 10 years. 9 The oil giants, for example,
get paid to blend ethanol into the gasoline, something they are
already required to do by law. The fi ve- year cost: $31 billion. 10 And
that doesn’t begin to account for the external costs of pollution,
environmental degradation, and a national defense policy centered
on protecting oil interests abroad that is borne by taxpayers.
Agri- giant Archer Daniel Midlands also benefi ts mightily from
ethanol subsidies. According to one calculation, every dollar in ethanol
profi ts for ADM costs the public $2.85. 11 Forty percent of ADM’s
profi ts come from heavily subsidized crops, according to a Cato
Institute study. 12 Again, the Big Ag subsidies pose external costs to
society, in the form of cheap corn- based sweeteners that have infi ltrated
our food products and contributed to climbing obesity rates,
a loss of biodiversity in favor of mono- crops, agricultural run- off,
and so on.
A more insidious form of corporate welfare is the discretionary
subsidies negotiated in secret by state and local offi cials to
attract big plants, company headquarters, sports stadiums, and