Recap

Rich Get Richer on Gov't Subsidies

Pulitzer Prize-winning reporter for The New York Times, David Cay Johnston discussed his book, Free Lunch, which exposes how everyone from golf course developers and sports team owners to Paris Hilton and other super rich are getting richer off of government subsidies.

Johnston provided specific examples of wealthy people who have enriched themselves at the expense of taxpayers. He told Ian the new Yankee Stadium will likely end up costing taxpayers about $1.2 billion. Even more disturbing, Johnston said Former New York City Mayor and Yankees fan Rudy Giuliani gave the ball club $25 million to pay for them to lobby for the stadium subsidy.

Johnston dismissed the assertion that commercial ballparks are economic boons to the areas which surround them. If it's a sound investment, he asserted, then why do sports team owners need the government to give them money. According to Johnston, the four big U.S. sports are not actually profitable on their own, but end up making about $1 billion dollars from government subsidies.

Johnston also detailed a deal by Warren Buffet, known as the world's greatest investor. He said Buffet received $100 million to build a new call center for GEICO in Buffalo, New York. The call center cost only $40 million, created no new jobs and was built in a wealthy suburb, he noted. Johnston indicated that stories like this are quite routine, as one business man told him, "I don't think we should be doing this, but if they're giving you the money you'd be an idiot not to take it."

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