This piece is a research essay, co-authored by Carl Bindenagel and Bill. for The Globalist. It is Part II of The Globalist’s American Mezzogiorno series. Part I, by Stephan Richter and Carl Bindenagel, is The American Mezzogiorno: A Thanksgiving Reflection. Part III (“Take the Money and Run”) can be found here.
The American South’s political power manifests itself in the following four dimensions:
1. Congressional Power
2. Agricultural handouts
3. Defense spending as a welcome stimulus
4. Antiquated thinking
Exhibit 1: Congressional Power
Prior to the 2014 mid-term elections, representatives from the American South chaired or represented a majority of members on important permanent committees and subcommittees in the U.S. House of Representatives. At the state level, Republican governors led unified government in 26 states.
How have these lawmakers used influential policy-positions to affect the welfare and livelihoods of their constituents? Mainly they enriched themselves, protected the powerful, and deliberately harmed the vulnerable in their jurisdictions and states.
They directed federal funding to themselves and to contractors with powerful lobbies and fought against programs to assist the poor, the abused and common citizens. Often, this included children, who are among the impoverished in America and who lack resources, including access to education.
Lawmakers’ self-serving behavior at the expense of their constituents can most clearly be seen on the defense-spending related committees in the U.S. Congress.
Southerners account for 53% of the House Appropriations Defense Subcommittee and 55% of the House Appropriations Committee on Homeland Security (compared to nationwide population share of 38%).
Most tellingly, the membership of the House Subcommittee on Military Construction/Veterans Affairs is now 63% southern. The Chair of the full House Appropriations Committee is a southern Republican as well.
All of this matters greatly: Under the U.S. Constitution, all spending bills must originate in the House and ultimately from its Appropriations Committee. The Republican-dominated House (and the Southern-dominated House Majority) therefore has great control over how and where federal money will be spent.
Exhibit 2: Agricultural handouts
In addition to the defense sector, in rural communities, farmers are frequently subsidized – even in the event of crop-failure or natural disasters (such as floods or droughts).
Historically, this was crucial to prevent small-family farms from collapsing. But today, with the rise of consolidated agribusiness, the picture looks very different.
Many Republican lawmakers in the U.S. House support this type of subsidy, not only for their constituents, but also to enrich themselves.
In September 2013, several of the same House members who voted to cut almost $40 billion out of food stamps over the next decade personally received hundreds of thousands or even millions of federal dollars in farm subsidies.
Take the case of Rep. Stephen Fincher. He cited a passage from the Bible as justification for his vote against providing food stamps, presuming that a needy person was just lazy.
“He who does not work will not eat,” said Fincher. But from 1999 to 2012, the gentleman himself (not his state) received more than $3.4 million in federal farm subsidies.
Fincher’s is not the only case of faulting needy working people while claiming personal privilege from the government:
Rep. Vicky Hartzler of Missouri received $800,000 from the government for her farm. Rep. Kristi Noem, a Tea Party favorite, received $3.4 million for her farm between 1995 and 2012, and Marlin Stutzman of Indiana pocketed $200,000 from the government.
The patrician southern planter class is alive and well – and still well represented in the U.S. Congress. Tending to one’s vast fields is evidently best done from the Appropriations Committee in Congress. Conflict of interest? Perish the thought.
Meanwhile, if an individual loses his job, not from personal failure but from financial catastrophe, he or she is out of luck. A majority of House Republicans voted to cut long-term unemployment insurance.
Exhibit 3: Defense spending as a welcome stimulus
Neither of these exceptions to southern resistance to federal spending is actually helping ordinary citizens. Just as Big Agra and wealthy farmers benefit from those subsidies, defense firms and their government contracts tend to reinforce concentration of wealth. They are far from being huge job creators for average workers.
In December 2011, the U.S. Senate debated a bill to lower the cap on salaries that can be paid to executives of defense contractors, which currently stands at $763,029 per year.
Defense executives can be, and often are, paid more than that amount. However, any amount in excess of the statutory cap simply cannot be paid by the taxpayer directly.
An investigative report into SEC filings of the five largest DOD contractors by Ben Freeman of the Project on Government Oversight found that the average compensation of the CEOs of those companies (Boeing, Lockheed, Northrup Grumman, Raytheon, General Dynamics) was $21.5 million.
By comparison, the U.S. President’s (the Commander in Chief) compensation is $400,000 per year and the Vice President’s salary is $230,700 per year. Boeing, Lockheed Martin, and Northrop Grumman, the three largest U.S. defense contractors, together account for 18% of the Department of Defense’s budget.
Even so, these companies declined to provide information to the GAO about how many executives are paid above the President’s and Vice President’s salary (or the amount that would not be allowed to be paid if the cap were reduced to the Commander in Chief’s or VP’s level).
The average engineer or scientist who works at these corporations is certainly not paid at a similar level. Assembly line workers even less so.
Exhibit 4: Antiquated thinking — The case of Georgia
Take the Georgia State legislature’s recent passage of legislation that expressly forbade Georgia’s elected insurance commissioner from enforcing the new federal standards for insurance companies established by the health care law.
Georgia’s Governor Nathan Deal – like many of his Republican peers across the region – has also refused to expand Medicaid, even though that expansion of benefits would come at no initial cost to the state and very little in the future.
Never mind that Republican business leaders should rejoice at making their state’s population potentially healthier — and hence more productive.
Never mind that poor people who receive medical care should also be a lesser burden in the future – unless, of course, they conveniently die prematurely.
And, finally, never mind that there are so many uninsured people in Georgia that the governor has had to close at least four hospitals, due to their insolvency from “un-covered visits” (i.e., from serving patients without insurance coverage, as required by law).
Instead of accepting the Medicaid expansion that is a key part of “Obamacare,” Governor Deal’s proposed solution to his insolvency problem is to request that the federal government repeal the law forcing hospitals to treat the uninsured in emergency rooms.
In other words, he would prefer to turn them away without treatment. This was the situation just 30 years ago.
How Georgia turns back the clock
In 1986, Congress passed, and conservative Republican President Ronald Reagan signed the Emergency Medical Treatment and Active Labor Act (EMTALA).
This law guarantees emergency service to all, regardless of the ability to pay. At that time, Democrats and Republicans were united in agreement that only an unjust society would turn the uninsured away from emergency care.
Now, Governor Deal is asking the federal government to reexamine EMTALA, and to rescind it. He would rather jump back three decades than accept federal dollars to provide Medicaid for low-income Georgians without insurance.
Many people lack insurance because they are unable to afford it, which the Affordable Care Act partly aims to counteract. But those without insurance often cannot have illnesses treated early. Instead, they wait until they have an emergency and have to go to the ER.
If people are unable to pay, there are various ways of shifting costs, from insurance premiums for those who do have insurance, to the hospitals, to the taxpayers. It’s inefficient or even unsustainable in some places – and it explains why Georgia hospitals are going bankrupt.
While emergency care visits typically account for only a small amount of what large hospitals do, many hospitals have significant costs from uncovered visits. In wealthy urban centers, U.S. hospitals can shift the costs onto more affluent patients or raise private charity funds.
But smaller, rural hospitals and emergency care centers in low-population, low-income areas with a high percentage of uninsured residents – such as many places in Georgia – can easily go bankrupt with no one to pick up the cost burden.
It would also be cruel simply to let the poor die just to spite a president the governor despises. But that’s Georgia for you.
Georgia is also the home of the much touted and praised private hospital and medical center at Emory University – which has successfully treated four Ebola victims. Emory is a favorite in Georgia – heavily endowed by the Woodruff bothers of the Coca Cola Company very early and sustained over many decades. Such richness in the same location as poverty is not limited to Atlanta or Georgia.
The United States is bifurcating into increasingly distinct rich or poor, while the middle class disappears from existence.