569: Welfare for the Rich, Government Creep & The Human Cost of Welfare by Phil Harvey

This show is produced by the Hartman Media Company. For more information and links to all our great podcasts, visit hartmanmedia.com.

Welcome to the Holistic Survival show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary to survive and prosper? The Holistic Survival show is your family's insurance for a better life. Jason will teach you to think independently, to understand threats and how to create the ultimate action plan. Sudden change or worst case scenario, you'll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.

It's my pleasure to welcome Phil Harvey to the show. He is the author five books, including Welfare for the Rich. That's his newest work, how your tax dollars end up in millionaires pockets and what you can do about it. And also his last book, which is the human cost of how the system hurts people. It is supposed to help. Phil, welcome. How are you?

I'm well and it's good to be here.

Good, it's good to have you on. And you're coming to us from outside Washington D.C. area, right?

That's right.

Excellent, excellent. Well, what is going on with the system and how are taxpayers getting burned by having welfare go to many of the wrong places?

It's shocking really. I think there can be a general agreement among people leaning left and leaning right on the political spectrum that the least fortunate among us in society deserve some help from the government. And indeed there's a very large program, particularly in the days of the pandemic, to assist those whose incomes are very sparse. But what shocks me and my co author Lisa Conyers is the fact that so much of taxpayer money is going to parties who are extremely wealthy, in some cases billionaires and many, many millionaires and the corporations that they take part in for no, no reason except for the fact that various parties have lobbied effectively to get programs going. And once a program gets going in Washington D.C. it's practically impossible to end it.

Milton Friedman said that so well, he said, I've never seen anything so permanent as a temporary government program.

Exactly right. And he couldn't be more right. The best, the best story there, which is included in our book by the way, was the sheep and goat program that was introduced because wool and mohair were badly needed during the second World War for making uniforms, maybe even been the first World War anyway, way back. And the government Subsidized sheep and mohair farmers and growers, year after year after year, somebody would stand up in Congress and say, the war is over. We don't need this for uniforms anymore. Let's end this program. Could never get it ended. And then finally, Sometime in the 90s, it was eliminated for one year. Congress voted to simply end a program that was wasteful and unnecessary. And the next year, sure enough, it came back in a different format, and the mohair and wool folks are back on the subsidy train for absolutely no rational reason except for those people who benefit immediate from it.

Of course, these are the iron triangles that exist in so many parts of government, probably just everywhere, at every level of government, state, federal, local. It's just someone is getting paid. And that's why it just can never be efficient or properly allocated. It's absolutely ridiculous. So talk to us more about these multimillionaires and billionaires and giant companies that are getting welfare. I mean, the common thought, I guess, Phil, would be that, you know, look, you know, these people don't get disability. They don't get unemployment insurance. How are they getting welfare?

Well, the most egregious example, I think, is in the farm program. Farm Bill, as it's called, been renewed every year for umpteen years now. I think it started in the Depression when assistance to farmers actually was needed, and it made sense back then. But like so many other programs, the farm bill program, not counting the part that goes to food stamps, which is a separate subject in many ways, gives away about $96 billion a year to farmers and farm interests, with very little attention paid to the wealth of those benefiting, with a result that some of the largest farms and some of the largest agricultural corporations get most of the benefit. One telling example is a woman named Tenny Pritzker, who is a billionaire. I mean, she inherited scads of money from a mill and lumber company in Chicago some years ago and doesn't farm. She isn't a farmer, but she owns some property that is farmed or some. At least some property that can be farmed and qualifies as agricultural land. Well, she got $1.6 million over a recent decade just because she owned that property. Now, this is not somebody who goes out and runs a reaping machine or a planting machine or gets her fingernails dirty. She just happens to own some property. She owns the property because she's already wealthy.

So what kind of subsidy does she get?

She gets a cash check just based on the fact that she owns property that is farmed. Or is farmable. There are dozens of these. Let me get a quick statistic here. Fifty billionaire members of the Forbes 400, which is pretty good about listing billionaires, got $6.3 million in subsidies over a similar recent decade for no good reason. I mean, the idea that very, very wealthy people who happen to own farm properties should be getting taxpayer money is nuts.

Well, you know, just let me play devil's advocate for a moment on that. So I'm a real estate investor and I teach people how to invest in real. We've been doing that for many years, almost 20 years now. And we've looked at farm deals as our investors have asked about, what do you think about investing in farmland? And Phil, the returns aren't very good. It seems like a good idea. Everybody needs food. On the face of it, farmland seems like something that. It's just a staple. Right. But the actual returns on investment are just pretty minuscule. So is that designed to help incentivize farming of land and the ownership of that land? I mean, it's got to be owned by somebody and financed by somebody, right? I don't know. You know, maybe if they took that away, would there be less investment there? You know, the government, everybody responds to government incentives. I'm not saying it's right, it's just true.

Well, certainly the fact that farmland may not be a sound or a wise investment for an outsider is no argument against the fact that people who own farm property, quite probably for other reasons, are getting these free. These free bonuses for no particular reason and without deserving it in any way, shape or form.

Well, does. Does the land have to be actively farmed to get the incentive? Or can it just be dormant land that's not being farmed? That would worry me.

Yeah, well, that. That happens. There is a program under the farm bill that pays farmers to let certain acreage lie fallow for a period of time. This was well intentioned. But it does result in the fact that we're paying some farmers not to grow anything at all for extended periods, which is, on its face, shall we say, a little embarrassing.

Yep.

But overall, this is simply picking the pockets of the American taxpayer to benefit very wealthy people. It makes no sense.

Do you address some of these tax schemes that companies like Apple and Amazon and Google are using to basically evade taxes? I mean, they're not technically evading taxes because they're just taking advantage of the laws that are out there. But seems ridiculous to me that these incredibly wealthy companies and incredibly wealthy executives or founders can get away with what they're doing, you know, by setting up these entities in different states and in different countries. It's just ridiculous.

Well, I won't argue that point. I think. I think you're quite right. We do not go into the complexities of the tax code for those kinds of companies in the book. But we do cover tax advantages of the sort that clearly involve taking taxpayer money and subsidizing a non taxpayer. My favorite example of this is the Walt Disney Company, which owns some. Some acreage in Florida, presume somewhere near their. Their entertainment sites, Disneyland, Disney World and so on, where they rent cows. They actually don't.

There's like a rule in Texas where you can get a huge break on your property taxes if you just put at least one cow on that land.

Well, there you are.

Because it becomes farmland.

We're asking people to do something that's not productive. It's stupid. It's simply unjustified. That kind of thing happens a great deal.

Give us some more examples, if you would. We talked about the farm bill, we talked about the wool, what else is happening? And then let's make sure we cover what we can do about it before we wrap it up.

Okay. Well, an area that is much less well known because the impact is harder to evaluate at a glance is the zoning rules. This is particularly burdensome right now in a country with severe job shortages, facing great difficulties in getting people back to work and in the homes they can live in. Zoning, particularly on both coasts, most especially coastal cities in California, have zoned their cities in such a way that housing has simply become unaffordable to the average person. You cannot move to San Francisco, for example, and try to rent or buy, but usually rent a place to live unless you're pretty rich to start.

Sure.

The result is that we're reducing the number of jobs. We're forcing people who go to cities like that because there is work available and ending up 100 miles out in a suburb somewhere where they can afford housing. And this is badly inhibiting the employability of many.

I agree with you. But the environmentalists would say, you know, we can't have any more people. You know, it's just. It's too crowded. We see this all over these dedicated open spaces under the guise of it being for the environment. What that really does is keep people out of the housing market. I call that environmental racism. And I had Thomas Sowell on my show years ago. I coined that term, actually, during that interview with Thomas Sowell. And what do you say to them, though, all this development is bad for the environment, right?

Well, it's certainly fine to have open spaces, but you can't have big open spaces in the places where the jobs are. People will go to find work. That's a universal, universal phenomenon. And if you make housing unaffordable at or near the places where the jobs are, you're simply shooting yourself in the foot.

Well, so what would San Francisco do, for example? Would they build more high rises to house more people? What can be done?

Absolutely. They would build more high rises. They would build them multi family homes of various kinds. A lot of zoning is for single family homes only, which of course gobbles up enormous amounts of land per occupant.

Right. But San Francisco is completely built out. I mean, there's no vacant land in San Francisco.

So what do you do? One simple way of adding to the housing availability in San Francisco would be to allow all existing buildings to add one more story. This would make a significant difference. But their rules in San Francisco against doing that.

Well, that's because they want to keep. They don't want the density to be any higher. You know, they don't want it to affect people's views and all kinds of, you know, you've got all these conflicting interests, Right, Sure.

Certainly you do. And a lot of it comes from the NIMBY folks, the not in my backyard phenomenon, where.

And that backyard is becoming bigger and bigger, by the way, for everybody.

Yeah, yeah. And the value of those homes that exist there now, of course, has shot up so that the people, the people who own those single family homes have done extremely well.

Yeah, but I mean, say you just keep building and building. I mean, everybody will just keep coming. You know, I'm a big fan of John Denver's music and he has this lyric in one of his songs where he's talking about Colorado, and the lyric is, more people, more scars upon the land. So how do you weigh these interests? They're opposing interest.

If you consider people to be scars upon the land.

I don't, I don't. I think people listen. I'm not a Malthusian, but I'm just. I'm parroting their arguments. I mean, you know, the left argues against development. They argue against providing housing to people, and they argue for open spaces. You can't have both. You have to choose. They're directly opposing interest. Right.

They often are. I completely agree. And if you want people to be able to work and thrive and prosper, you have to allow housing to be built. I'm all for open spaces, but they don't need to be in places where they compete with housing for workers.

Yeah, but you know, I'm from, I don't live there now, but I'm from Southern California and so I lived in Newport beach for many years. One of the things in Newport beach and also in neighboring Irvine, I don't know if you're familiar with those cities. You know, Irvine is a very master planned city and you know, they've got all these dedicated open spaces and you know, there's a vibrant economy there. I mean, you know, it's a, it's a high end area. All these open spaces just simply serve to create a housing shortage. But it's beautiful. I mean, you know, I remember all my friends circulating flyers, Save Crystal Cove State Beach. Don't let them develop it. You know, they were so against it. And I thought, you know, basically your whole argument is you've already got yours, so don't share with anybody else. Right. Keep other people out and prop up your housing prices. It's like that old riddle, right? What do you call a developer? Someone who wants to build a house at the beach or in the woods or what do you call an environmentalist? Someone who already has a house at the beach or in the woods. You know. Yeah. So what do you do about it? Right.

I think that's exactly right. Well, I mean, there are compromises that have to be made. I would not suggest that cities be entirely without parks. For example, we need to make living in cities and working in cities reasonably attractive. I'm all for that. But you don't have to zone people out of affordable housing. I mean, the city of Houston, for example, has no zoning of any kind. And people, you know, say with great horror, imagine having no zoning. Well, Houston has no zoning.

They brag about it, but Houston is rather nice. I mean, you know, I own property.

Houston, I know it.

Yeah, it's quite nice. Yeah.

You don't need zoning to have a nice livable city. In any event, I certainly agree with your term. Racial zoning has been the result.

Environmental racism.

Yeah, environmental racism.

Spread the word, spread the word. Yeah, really, people have to know about it because it's really unfair. It really is. You've got a couple other maybe touch points just before we wrap it up that I want to ask you about. You talked about housing. You've got food, steps, missteps with women and children. You know, we disable the disabled. Do you want to touch on any of those as we wrap it up?

Well, I would, I would mention just one more program related to agriculture. But it's a. It's a basically a different program, and that's the sugar program because it's one of the most egregious of government subsidy efforts. Everybody pays about twice as much for sugar and sugar containing products every time they go to the supermarket, Twice as much as they should have to pay because sugar in America costs double the world price. This is done for the benefit of really a very small number of very wealthy sugar barons who grow sugar cane, primarily in Florida. Man named Pepe Fanhoul, who is another billionaire benefiting from gulp. Policies. And even people who are too poor to be paying any kind of federal income tax below the tax level still have to buy groceries. So virtually everyone in America is subsidizing Pepe fondable in his billionaireness, one of the most obscenely unfair programs that the government takes part in.

Should we eliminate lobbyists? I mean, a lot of this is a result of lobbying.

Of course we can't eliminate lobbyists because the first amendment to the constitution specifies that one can represent one's case in front of the government. It's a very fundamental American right. There are ways of making lobbying a little less intense, but it's an uphill battle and one that requires alarmed citizenry, I think, an extent that we may have difficulty achieving.

Yeah, I agree with you. Give out your website and tell people where they can find out more.

Well, Welfare for the Rich has its own website called Welfare for the rich.org and you can find out a lot about the book there. It is available on Amazon and a great many other places and we hope you'll have a look at it and learn just how much of your money is going to how many very, very wealthy parties.

Excellent. Phil Harvey, thank you so much for joining us.

My pleasure. I enjoyed it.

Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out this show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own, and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to itunes or Stitcher radio or whatever platform form you're using and write a review for the show. We would very much appreciate that and be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.