Forbes’ Frezza: Millions “Make A Living Off…Misery” Of the Poor

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April 16, 2013; Forbes

Bill Frezza’s column for Forbes bears the tagline, “I chronicle the decline and fall of entitlement democracy.” Based on his most popular columns, Frezza is comfortable with aggressive positions, including predicting the demise of public sector unions in the wake of Wisconsin Governor Scott Walker’s victory and predicting Romney’s election victory over Obama due to events such as the Supreme Court’s “evisceration” of national health insurance reform and the street violence of Occupy Wall Street protesters—though that last column reads like it could well have been satire, despite Frezza’s virulent antagonism toward anything Obama.

His April 16th column attacks “poverty professionals” and the “love” they receive from “crony capitalists.” Since many nonprofits provide assistance to the poor, he is characterizing not only “the marriage of convenience between the financial services industry and federal bureaucrats,” but the nonprofits that are often part of the federal anti-poverty delivery system. Frezza says that “a panoply of federal welfare programs [have] expanded and multiplied to the point where they now consume one-sixth of the federal budget—some $588 billion,” without counting, he says, unemployment benefits, Social Security, or Medicare. He describes the “War on Poverty” as “the longest and least successful ‘war’ in American history, with no sign of stopping.”

Given the lack of success of federal anti-poverty programs, Frezza argues that the interests supporting these program include “entrenched bureaucrats” who receive “good pay and benefits…to do all this poverty fighting.” He suggests that government policy makers expand these programs because they believe that “expanding welfare programs creates economic vitality,” and firing “all those people who make a living giving away chunks of your paycheck” to find jobs in which they would “do something productive instead” would, according to Keynsians, lead the nation into “austerity [that] will drive us into a depression.”

In fact, Frezza’s argument, while not particularly friendly to the “government employees who profit from this growing sector of our distorted economy,” criticizes other interests that are intended to benefit from anti-poverty programs—such agricultural interests that advocate for food stamps and foreign food aid and electronic card processors such as J.P. Morgan and Affiliated Computer Services that make money from Electronic Benefit Transfer (EBT) cards. Those are the major examples of the crony capitalists that Frezza targets, but he implies other programs also benefit “the myriad civil services and wing-tipped bankers who dole out benefits.”

Frezza suggests that the marriage of federal anti-poverty bureaucrats and big business sounds like something from The Onion, America’s (and our) favorite satirical newspaper. His own column could well be drawn from The Onion as well. But we suspect that there are many more people who believe, like Frezza, that there is an industry of bureaucrats, nonprofits, and businesses allied with little or no interest in eradicating poverty, but with maintaining themselves to profit from the War on Poverty.—Rick Cohen

  • Terry Fernsler

    Should we add the foundations that, while pumping 5% of their assets into anti-poverty programs, invest much of the remaining 95% of their assets into the likes of big business that fuel the increase in poverty?

  • kait

    I’ve worked in nonprofits willingly since I was 20. I was incredibly impoverished myself. only when I moved into academia did that change. This guy is right to a certain extent, because I think that nonprofits need to look @ the ridiculous salaries of executives, but it’s not like that everywhere. Those of us delivering the programming or even raising the money aren’t making a huge buck.

  • Kelly Kleiman

    Frezza is right that there are people making millions off the misery of the poor, but wrong about who those people are. It’s not nonprofit service providers but banks which refuse to refinance mortgages, fast-food companies which refuse to pay the minimum wage, deficit hawks who sacrifice job creation for a meaningless reduction in indebtedness, health insurers who made sure health care reform would be as complex and expensive as possible so they could still participate, charter school operators and investors who soak up funds that belong in public education, and on and on. @Kait: Don’t let jerks like this guy make you defensive about your work in the sector. Of course you’re underpaid, and of course your salary is not what’s coming between poor people and prosperity. That argument is the equivalent of “Your shoe’s untied!”–a method of getting people to look away from what’s really happening and focus on what isn’t. @Terry: Yes, absolutely, the foundations profit from the current system, regardless of how they invest their corpus, because they get 100% of tax break for 5% of generosity. That’s money that comes out of all our pockets, including the pockets of the poor.