How Food Stamp (Welfare) Enriches Cronies

This is an example of how the welfare state is tied up with crony capitalism.

From Breitbart.com (hat tip Bob Wenzel)

The Farm Bill is reapproved every five years; in the 2007 bill, the biggest lobbyists included the agriculture biotech giant Monsanto, which spent $8.8 million. Other large corporate lobbyists included American Farm Bureau, Kraft Foods, PepsiCo Inc., American Beverage Association, Tyson Foods, Coca-Cola Co, Wal-Mart Stores, and the GMA (Grocery Manufacturer Association).

Big Agriculture lobbies Congress knowing hundreds of millions of dollars are on the line for their corporations.

Lobbying also takes place at the state level, where Big Agriculture has been fighting off further regulation of SNAP. State laws cannot strictly mandate that certain purchases be forbidden with the use of SNAP; the USDA (United States Department of Agriculture) has jurisdiction on how SNAP money is spent. State laws are required to seek a waiver from the USDA on certain products. Nine states proposed bills to alter SNAP to make it a more health-conscious program, but none of the proposed measures passed due to the pushback by Big Agriculture.

States contract with large banks in order to administer SNAP benefits; such banks charge fees, mostly to the states, for the use of electronic benefit transfers (EBT). The largest of such banks is J.P. Morgan Chase, which has EBT contracts in 24 states and makes a fortune from the Food Stamp Industrial Complex. J.P. Morgan Chase signed two contracts to administer EBT for the states of New York and Florida totaling $209 million. So much for liberals’ supposed disgust for the 1%.

Large retailers are also cashing in on SNAP benefits. Stocking the shelves with food stamp-approved foods, Wal-Mart made about half a billion dollars in SNAP purchases in two years just from the state of Oklahoma. That is a significant returns for Wal-Mart’s lobbying effort in the 2007 Farm Bill, where Wal-Mart lobbied for five provisions, all having to do with food stamps.

This is not an uncommon story; big business colludes with big government in the name of the public’s interests while they are making themselves rich with regulation, bailouts, corporate welfare, and government contracts. Americans don’t bother to get riled up about it because they expect it, because human nature reduces itself to whatever conditions the culture allows.

What is sold as ‘public good’ to get the approval of the gullible public, is in reality, political privilege.

Next time you hear political agents say that so and so programs are needed for interests of the public, behind the scene are snickering cronies waiting to grab your purse.