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Taibbi Highlights Hypocrisy Of Punishment Of Wall Street Vs. Main Street

In an article at Rolling Stone, Matt Taibbi contrasts the story of a woman who committed food stamp fraud and recieved a harsh penalty with the fraudsters of Wall Street, who, at worst, got slaps on the wrist for their crimes. Taibbi












Taibbi is right to be outraged. This is another in a long line of false crises pushed by Republicans that, instead of targeting real problems, target populations that can't speak up for themselves as well or who already suffer from low public approval. For decades, conservatives have targeted the recipients of government assistance programs, trying to pain anyone in one of these programs as part of the "unworthy poor" who are "stealing" from the rest of us. These campaigns heavily target the most vulnerable of the 99 percent and few people are willing to defend the targets.

Think Progress recently pointed out the weakness of the conservative argument against the food stamp program:

But as the Center on Budget and Policy Priorities found, SNAP errors are currently at an all-time low, with errors accounting for less than three percent of the program’s cost:


During the recession, SNAP has been critical for reducing poverty and pumping money into local economies.

It's clear that food stamp fraud is not a real issue. If anything, the biggest problem in the program comes not from program recipients, but stores that accept food stamps, who are committing significant fraud:

A criminal swindle of the nation's $64.7 billion food stamp program is playing out at small neighborhood stores across the country, where thousands of retailers are suspected of trading deals with customers, exchanging lesser amounts of cash for their stamps.

Authorities say the stamps are then redeemed as usual by the unscrupulous merchants at face value, netting them huge profits and diverting as much as $330 million in taxpayer money annually a year. But the transactions are electronically recorded and federal investigators, wise to the practice, are closely monitoring thousands of convenience stores and mom-and-pop groceries in a push to halt the fraud.



Last year, 931 stores nationally were dismissed from the food stamp program for trafficking and 907 others were sanctioned for lesser violations — 37 percent of the nearly 5,000 retailers being investigated.

So the real significant fraud in food stamps comes from retailers -- who are being caught in significant numbers already. On top of that, the president is ramping up enforcement, which is already good. So, again, this isn't a problem that is costing the government or the taxpayers much money in the big picture. The combined fraud rates from individuals and retailers is like 3.5 percent of a $65 billion program, accounting for less than $3 billion annually. The entire realm of fraud for the entire program is less than numerous individual cases of fraud on Wall Street. And that's not even to go into the subsidies, tax relief and bailout money the Wall Street fraudsters got.

Conservatives complain about a few anecdotes of millionaires getting food stamps because of loopholes as if the anecdotes were proof of broader problems. They complain of Barack Obama pushing more to get people enrolled in the program than to prevent fraud, as if making sure that people eat during bad economic times is somehow a crime. And they complain about the lack of inspectors able to pursue fraud cases, despite it being their push for downsizing government that led to that shortage.

Taibbi adds another thought:



As part of the fraud hysteria promoted by Republicans, people are given penalties way out of proportion with the crimes they are committing. In particular, poorer people are given these penalties. What the proponents of these types of laws -- denial of food stamps because of drug use -- are literally saying is that the punishment for drug use should be starvation.

Can you help us out?


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