Wednesday, November 23, 2011

Fast Food giants see big profits in the foodstamp business.


Stay away from the fast food joints or look like this
Bourgeois economists in the US are somewhat worried about inequality.  It is not so much the pain poverty and want this causes among the dispossessed but how inequality might affect economic growth or more accurately, profits.

Since the 1980’s about 5% of national income has shifted from workers to the richest US households Business Week writes. What this has meant in real terms is that in 2010, the wealthiest 5,934 households raked in $650 billion over what they would have earned if the economic pie were to be divided as it was in 1980.  “Somehow it just doesn’t seem right”, Business Week writes of the public discussion about inequality, “…that so many Americans struggle while a handful prospers.”

“Life is what You Make It.”

No, what concerns them about this is that it’s not good for the US economy.  Branko Milanovic, one of their flunkies at the World Bank stresses that “Widespread education” is the driver of growth and “broadly accessible education” is only possible in an economy that has a fairly even income distribution. Leaving aside the merits of such an argument the point is that for them, the shifting of so much wealth from the working class to the top 5,934 households could mean “shorter recoveries and gun-shy investors.” It’s the ratio between upswing and downturns in the business cycle that’s the issue.

According to the International Monetary Fund, another gang of theirs much like the Chamber of Commerce, smaller income gaps between the haves and have nots mean longer expansions and the IMF has figures to prove it.  Longer expansions make the Wall Street crowd feel more confident about life as it means an extended period of profit taking and that’s good.

This doesn’t mean that in lean times profits can’t be found.  Demand for food stamps has skyrocketed since the end of 2007 when the present crisis began and some 49 million Americans used food stamps in the month of August this year which, according to the USDA, is an 8.1 increase over August 2010. The 50-year old Supplemental Nutritional Assistance Program (SNAP) that is administered by the states distributed $64.4 billion of food in fiscal year 2010 and this doesn’t go unnoticed by the coupon clippers on Wall Street, “Everyone wants to get a piece of that action.” Says Marion Nestle, a professor of nutrition and public health at NYU.

One of the “everyone” crowd is Yum Brands and the coupon clippers that run it.  Yum is the corporation that owns Taco Bell and KFC. Yum is busy bribing (lobbying) politicians to open the door for those of us who choose to live off food stamps rather than pulling ourselves up by our bootstraps to use our foods tamps at KFC and Taco Bell.  The problem is that the US Agriculture Dept. places some restrictions on the use of food stamps (it’s all digital now) Alcohol, pet food (about the same as KFC) and vitamins are not included for example.

The problem Yum Foods has is that 85% of food stamps are used at large grocery outlets, “Restaurants think that’s unfair” says the NYU professor.   Yum has been trying to change that, bribing politicians in Ohio, Pennsylvania, Florida and Kentucky to get them to change the laws so the corporation can participate in the program and hopefully as the ranks of the poor increase, they will be using their food stamps to eat more taco’s and that delicious fried chicken that KFC provides for the masses. (Check out Food Inc. if you want to get some idea about how the chicken industry functions).

The food production capitalists have got their foot in the door in some states where people that can’t cook for themselves like the elderly or disabled can use their food stamps to purchase cooked food at restaurants authorized by the SNAP program.  McDonald’s Wendy’s Taco Bell and KFC took in $21 million in food stamp redemptions last year in the states that have opened that door.

This is the tip of a very lucrative iceberg of course and Yum could do with some help from the taxpayers and public handouts as the company’s revenue fell 7.9% last year according to BW.

This battle is much like the fight over Pepsi, soda, candy and other vending machines in the public schools.  Food stamps, or the feeding of those that are the victims of the free market or have been abandoned by it altogether, the disabled, mentally impaired or unemployed is just another business opportunity to the coupon clippers.  The food stamp program is a quick fix for a market borne problem.  The increase in use since 2007 has its roots in the failure of the market---a crisis of capitalism.  The housing bubble threw people out of their homes and capitalism cannot put 30 or so million people to work.  The mentally ill were thrown out of institutions by that thug Reagan who the bourgeois name airports after.  Vietnam veterans and other victims of US capitalism’s predatory global wars are left, after severe traumatic experiences to fend for themselves, to “pull themselves up by their bootstraps”

The fast food industry produces poison from the production of its meat to the finished product at the point of consumption.  The poorest areas of our urban communities are dominated by these franchises and in some areas there have been limits placed on their construction.   Food production should not be a private profit-making venture any more that health care should.  School lunches should be prepared and cooked on site like they were when I was at school. Health care and the feeding of those of us in society who are most vulnerable is also a social service that needs to be expanded in terms of service and employment and those working in it compensated accordingly.  The corporations are sitting on over $2 trillion in cash that they refuse to invest in the economy because they are not confident that the profit returns will be adequate.  We have to take that money from them and we have trillions more we have available that can put people to work and get them off foods tamps if we end the wars in Afghanistan and Iraq.

Jonathan Blum, a spokesperson for Yum admits that the motivation for this incursion in to feeding the poor is not actually feeding people but profit making, “Yum may have some profit motive in this, there’s some merit to doing this if it is well-regulated and focused on healthy food.” he tells Business Week.

We are supposed to ignore the fact that these corporations are bribing politicians in the two Wall Street parties to ensure that regulation doesn’t restrict profit making in the aftermath of the Great Recession.

We only have to look at two examples to see how well regulation works, the BP spill where government agencies allowed the oil industry to write the regulations and the collapse of the housing industry.

You can’t regulate the behavior of the Fox when he enters the hen house.


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