While there can be payback from campaign contributions in supporting subsidies and protections for certain businesses and industries, most typically they are well-intentioned.
Sometimes, they come in the form of wanting to help the poor. This is the case with Chicago’s program that pays up to $7,500 in funeral costs for people who cannot afford funerals, often the victims of murders. Funeral homes have been accused of greedily taking advantage of the poor by getting all they can run subsidies, then charging extra. Whatever they can get out of the victims.
The subsidy allows for covering the expense of personnel, the costs of burial, a casket, and a funeral service. It does not cover things like flowers and obituaries, as well as other services one might obtain from a funeral home. The charges directed at Chicago funeral homes are that they take advantage of the system by always charging the full amount to the city, even if costs and normal charges are typically lower, and then charging for add-ons to grieving families.
The skyrocketing murder rate in Chicago is well documented and much discussed. There have been claims of funeral home representatives standing outside of the Medical Examiner’s Office to solicit business, and even showing up to the murder scene. A picture is being painted of evil, profiteering morticians targeting victims of shocking crimes that leave families in a weakened state. Of course, there are always going to be some unscrupulous people, and there are always going to be people who game a system and take advantage of people. However, let’s look at this situation with rationality.
When Disney began buying land in the swamps of Florida to build the world’s most famous theme park, they did so under several different corporate entities. They used many different companies to hide their identity, because when people know there are deep pockets behind proposed business transactions, they are going to try and get more than they would otherwise, especially if they know the other party has to have something to make an overall plan come to fruition.
When the deep pockets of government fund things forcibly with other peoples’ money, the same thing happens. Businesses charge more, because they know there is more money available. How could you blame anyone for making sure that they obtain all money available to them? It’s just good business.
Subsidies for college have increased the price tag on education. Wherever there are government subsidies, the price of goods and services goes up, because people are fools if they don’t get as much money as they can. If I know I can get $7,500 for the same services regardless of what I normally charge, why would I not take the full amount? By the same token, if those subsidized funerals are available to me and I can get that higher amount, I will do what I can to maximize my profits by trying to attract as many of those as possible, and the more that are available to me, the higher my prices are going to be for people who are not a murder victim.
People are not evil for maximizing their profits in the marketplace. It’s how the markets become efficient. This is a great example of how well-intentioned subsidies actually have a very negative effect. By covering the cost of funerals for a group of people, market prices go up, and solid business practices will demand that higher prices come from the result of other peoples’ stolen money gushing into the market.
In my opinion, the disgust is misplaced. Members of government in Chicago are responsible for raising prices and increasing costs on families that are grieving and are in a position to be victimized by government, no matter how well-intentioned. Government is the greedy, nasty party in this scenario. It is Chicago that has caused the problem much more than any greedy funeral homes. It’s nice to take care of people who are in financial distress at a time when they have already suffered a great loss. But, when that money comes from voluntary sources without government intervention, it is more substantive, more empathetic, and better serving to society than any government subsidies could ever hope to accomplish. Subsidies have negative impacts, and people are always best served by free markets.
Danny Chabino
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