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Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill)

Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill)

4.1 19
by David Cay Johnston

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Free Lunch answers the great mystery of our time: How did our strong and growing economy give way to job uncertainty, debt, bankruptcy, and fear for millions of Americans? Acclaimed reporter David Cay Johnston reveals how government policies and spending have reached deep into the wallets of the many to benefit the top 1% of the wealthiest.

He shows


Free Lunch answers the great mystery of our time: How did our strong and growing economy give way to job uncertainty, debt, bankruptcy, and fear for millions of Americans? Acclaimed reporter David Cay Johnston reveals how government policies and spending have reached deep into the wallets of the many to benefit the top 1% of the wealthiest.

He shows exactly who has been getting free lunches from the government?from $100 million to Warren Buffett, to $1.3 billion to the owners of the Yankees and Mets. But of course there?s really no such thing as a free lunch. The taxpayer always picks up the bill. With his in depth reporting, vivid stories, and sharp analysis, Johnston reveals the forces that shape our everyday economic lives?and shows us how we can finally make things better.

Editorial Reviews

Washington budget watchdog William Proxmire died in 2005, but the creator of the Golden Fleece Awards for wasteful government expenditures would warmly endorse David Cay Johnston's book. In Free Lunch, Johnston, a Pulitzer Prize–winning New York Times journalist, uses his investigative skills to expose tax dodges and federal "free lunches" for the super-rich. With the determination of a single-minded sleuth, he tracks legislative and lobbyist conniving that bilks Americans of billions of dollars each year. Whether you're right, left, center, or just innately skeptical, this book will confirm your worst fears.
Kirkus Reviews
An exhaustive litany of federal, state and even local giveaways to the very wealthy, described in agonizing and depressing detail. Beginning in the Reagan years, the U.S. government has placed a growing economic burden onto those least able to bear it, declares Johnston (Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich-and Cheat Everybody Else, 2003, etc.). It subsidizes the prosperous through tax breaks and other giveaways while stripping away protections for consumers, retirees, workers and investors. Starting with the sordid story of an exclusive Oregon golf course whose wealthy patrons enjoy recreation indirectly paid for by taxpayers, Johnston details dozens of giveaways, demonstrating beyond doubt that while government policies have made life much easier for those at the very top of the income pyramid, the great majority have it much worse than ever before. Examples range from the infamous-electricity deregulation, the collapse of Enron and the resulting astronomical spikes in the cost of power-to the obscure. In the latter category is Cabela's, a sporting-goods behemoth that convinced the citizens of tiny Hamburg, Pa., to grant it an exemption from property and sales taxes in exchange for locating a new megastore in their community. The total subsidy: some $8,000 for each man, woman and child in the community. Stories like these are no longer shocking, and Johnston fails to reach beyond sensationalism to solutions. In a final chapter, he suggests that citizens embrace democratic principles, but is disappointingly vague on how that might manifest itself in policies that would right the sinking ship he so vividly describes. Without solutions, thisremains little more than a list of grievances.

Product Details

Penguin Publishing Group
Publication date:
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Product dimensions:
5.40(w) x 8.30(h) x 1.10(d)
Age Range:
18 Years

What People are Saying About This

“If you’re concerned about congressional earmarks, stock options (especially backdated options), hedge fund tax breaks, abuse of eminent domain, subsidies to sports teams, K Street lobbyists, the state of our health-care system, to say nothing of the cavernous gap between rich and poor, you’ll read this fine book—as I did—with a growing sense of outrage. Free Lunch makes it clear that it’s high time for ‘We the People’ to stand up and be counted.”
—John C. Bogle, founder and former chairman, The Vanguard Group

“With clarity, conciseness, and cool, fact-saturated analysis, Mr. Johnston, the premier investigative reporter on how industry and commerce shift risks and costs to taxpayers, sends the ultimate message to all Americans—either we demand to have a say or we will continue to pay, pay, and pay.”
—Ralph Nader

Meet the Author

David Cay Johnston, a Pulitzer Prize- winning investigative reporter, recently retired from The New York Times. Over his forty-year career he has won many honors, including a George Polk Award, and has uncovered so many tax dodges that he was called the “de facto chief tax enforcement officer of the United States.” His two most recent books—Free Lunch and Perfectly Legal—were both New York Times bestsellers.

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Free Lunch 4.2 out of 5 based on 0 ratings. 19 reviews.
willyvan More than 1 year ago
In this brilliantly-researched book, the New York Times' Pulitzer-Prize-winning tax correspondent David Cay Johnston explains how US politics serves to take from the many to enrich the few. He shows how, for example, President George W. Bush, Donald Trump, Paris Hilton, Steve Jobs and Warren Buffett have got rich by leeching off the taxpayer. Bush bought the Texas Rangers baseball team, with the help of a public subsidy of $202 million from the city sports authority to build a new stadium. Then he sold it nine years later, at a $164 million profit. Bush got $17 million, on which he paid tax at the capital gains rate of 20 per cent, not, as he should have done, at the compensation rate of 42.5 per cent, saving himself $3.7 million. Donald Trump benefits from a tax designed to help the old and poor, part of which is now diverted to fund his casinos. Paris Hilton's grandfather got his fortune by overturning his father's will, to take the money from charities that specifically benefited poor children. A fabricated Apple board meeting gained its CEO Steve Jobs an extra $70 million. Warren Buffett's MidAmerican Energy Company paid just 4 per cent of its US profits in federal corporate income taxes in 2006. The government agreed to let it defer $666 million in taxes in 2007, so by 2035 it will have paid just half of its tax! This is like getting an interest-free loan from the government, that is, from all other taxpayers. Many firms service the rich by helping them to evade taxes and cheat the great majority who pay their taxes. KPMG, for instance, helped Columbia/HCA cheat the government, when it had a contract to detect such frauds. The hugely rich get away with murder, yet a guy who steals nine videos worth $150 gets a 50-year jail sentence, with no chance of parole. The Supreme Court upheld this punishment in 2003. The rule of law, anyone? 90 per cent of Americans are no better off than they were in 1973. Average incomes have fallen since then. Of every dollar earned in 2005, the richest ten per cent got 48.5 per cent. Between 1990 and 2003, the net effect of foreign investment in the USA was the destruction of 3.4 million US jobs. Johnston details rip-offs by student loan companies. "In a world of growing complexity and technological demands, short-changing higher education through rising tuition and high-cost loans is tantamount to a policy of reducing future economic growth so that the few today can have more. It is a kind of hidden tax on the future." He shows how the US healthcare system prioritises profits at the expense of care. Its administration costs were $123 billion in 2003: it is the world's most expensive health care system, and not the most efficient: the USA ranks only 36th in infant mortality. He analyses the infamous hedge funds and concludes, "Hedge funds are making a few people spectacularly rich, but they add nothing of value. Each trade that puts a dollar into the pockets of Simons and his investors is a dollar someone else lost. Trading is a zero-sum game."
RolfDobelli More than 1 year ago
Pulitzer Prize-winning reporter David Cay Johnston exposes how the wealthy have used the U.S. government to distort markets, eliminate competition, support lavish lifestyles and appropriate tax dollars. He explains how developers get resorts subsidized, and how big businesses extract huge concessions from cities based on promised benefits that rarely materialize. He details how big sports teams get taxpayers to build palatial stadiums where team owners reap big profits. Johnston also explains that when your local cops investigate false burglar alarm calls - running to investigate when something triggers a system installed by a private alarm company - you pay the cops for making the visit and dilute your own police protection. If you are a U.S. taxpayer, expect to feel frustrated or infuriated as he reveals how politicos route your money to the wealthy. However, his recommendation on how to free Congress from lobbyists' influence may be somewhat impractical. getAbstract thinks this report will continue to be intriguing as long as the issue of government spending matters. Sounds like a long time.
gwazdos More than 1 year ago
This book was so Enlightening regarding the FREE subsidies that are given out to anyone knowing how to take advantage of the rules of the Game. I have purchased six (6) more books to give to people of influence in my community that i felt needed to know how the game of FREE LUNCH is played even in our community and how the ordinary citizen had no idea of how the average hard working individual is getting screwed while the people knowing the games rules are making millions at our expense. For one good example - A well know sporting good store wanted to open a store in a certain location, they went to the town and said they would need help and with helping the store owners it would bring jobs to that community. So the small community not knowing how the game is played give this sporting good store a very large subsidy like an offset to not pay any taxes for 25 years. Now for the best part - the city also negotiated that all the sales tax collected at the store would not go to the community or state, but would KEEP the sales tax collected to help them pay for the cost of putting a store in this community. See what is going on? This book details many such example as this that will make your hair rise and will increase your blood pressure after seeing what is done to you by well intentioned city officials who i assume are given donations to help keep them in office. This book is a must for every one to read and know what is happening!

This book detail will really P@#$% you off and maybe make you mad enough to stand up for your community and address the damage the so called TIF's or subsidies do to you and your residential citizen.
Nuffsaid More than 1 year ago
As we are now in the thralls of the Presidnetal election season we need to take a look at history. We need to look at the so called Reagan Revolution, and ask ourselves if we are better off now, than we were a generation ago? The Reagan campaign promised prosperity and growth to our economy. Much of what we are facing now is due to the Reagan Revolution. Out of control Government spending, stagnant wages, diminished fringe benefits, and loss of pensions. Fraud on Wall Street, predatory lending, and down right smash the poor, and working class in America. All due to this idea of De-Regulation.

Those who have won, are those who were already rich, and those who knew how to manipulate the system. Rich individuals, and Giant Corporations. The cry DEREGULATE, comes to mind and is and was the catch word powering this so called prosperity, that has seen an increase in the numbers of Corporations doing business in Commiunsit China, at the expense of American jobs, and prosperity. You know Communism, the sworn enemy of Capitalism, and the HOLIER THAN THOW Republican Party. Not to say the do Nothings on the other side are blameless.

All of this reminds me of some of the writings of Vladimir Lenin, who wrote, "The Capitolists will sell us the rope with which we will hang them." In our GungHo charge to do trade with China, a Communist Nation, our sworn enemy, it does seem we have done just that.

Technologies, which are very important to our National Security have been sold to China, all to save or make a buck. All by the way in the name of free trade. Trade, you know something of value, in exchange for somthing of equal value. What a joke. Seems the guys who entered into these deals never involved themselves in playground trading.

So why pay an American worker $40.00 per hour when you can ship the job to China, and have that job done by some guy forced to work by the Government, for $0.25 an hour in China? This is all a result of our dealings with a Nation that has no respect for Human life, the enviroment, or other such rules.

This is what you will find in this book, the degrading of the American worker, wages that have all but dried up pensions, that have vanished, and all because of the Reagan Revulotion, and this so called "Free Market," and "Free Trade," or "Free Lunch."

We are taken advantage of by the people who own Pro Sports teams, and we go without roads, tunnels, and bridges. Yet we pay for the Arenas, the Stadiums, and then we turn around and buy the inflated costs for tickets. Oh and the Screwing continues, as any and all of the Giant Corporations milk us through Government subsidies, and Johnny cannot read, and teachers are on "Food Stamps."

This is Capitolism, this is freedom, this is America. Where did we go wrong.
Guest More than 1 year ago
If you have not read this book, you are missing one of the most important books of this century. David Cay Johnston¿s writing is riveting, and his expose on how government regulations are helping take from the many to help the few is essential knowledge or all who wish a good and prosperous future for America. Instead of bring a bottle of wine to our friends when visit, we are now bring a copy of the book. We have never had such a positive reaction to our thank you gift! Conservatives, libertarians, progressives are all appalled by information in this book. We need to get the message out and take our country back. You owe it to yourself and future generations, if you read no other book this year, to read this one. What Mr. Johnston has done provides a major service for America and it will only be useful if we read it and take action. In case you missed it Mr. Johnston was just on Bill Moyer¿s, and Terry Gross¿s Fresh Air You can google them to listen to them on your computer or ipod. They are well worth listening to and passing on to your friends who love America and want to help it have a great future.
readerrabbit427 More than 1 year ago
Quite wordy, was looking for some more statistical, broken down and listed ( at least at end )by name of person or corporation
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Matt-Bailey More than 1 year ago
I found this book both informative and frustrating. The book focuses on Govt subsides, for the most part. However, I was disappointed that Johnston makes many claims, but lacks any credital proof to back it up. While I dont necessarily disagree with the content, I would feel better knowing that these claims are based on facts and studies. Rather than blindly taking him at his word. Great book, none the less.
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Guest More than 1 year ago
As a member of the working class, I purchased this book with my hard-earned money solely to be informed or to be precise, to confirm what I have always suspected. I believe that class system is as old as this world and will always exist in one form or another. What is unique in our case, as citizens of this United States of America, is that we can move-up to the social ladder just by our wits, willingness and determination. I always believe that as Americans, we can dream of any goals to advance our social status in life. In this GREAT Land, we are FREE to turn that dream into reality. Our history is dotted with remarkable stories of successes that are almost impossible to duplicate anywhere else in the world. Keep working at your goals in life. Whining about the social status of others will NEVER help you to attain your unique personal successes in life.
Guest More than 1 year ago
Johnston's book contains much data of considerable, even damning, evidence of how our government helps entrepreneurs rape our tax-paying citizens for private gain at the expense of public coffers. But his laborious writing style obfuscates his subjects, vainly and wordily trying to infuse personal interest features into his examples. As a Ph.D. in English (Michigan), emeritus Professor of English, and former copy editor for a publishing house, I am appalled by the ineptness of the writing in this book. Working as a copy editor, I could reduce the volume by half, transfuse energy into the examples, and invoke riot to inspire the readers to rise up against the practices exposed.