Conservative politicians, including Mitt Romney during his presidential campaign, supported legislation mandating drug testing for recipients of federal aid, such as: the unemployed, families in assistance programs -- in general, citizens down on their luck or in trouble. Interestingly, none of these politicians has suggested drug tests for executives whose banks benefit from billions in federal aid and bailouts.
Since 2011 (generally, at Republican insistence):
"Seven states have passed laws mandating drug tests for [welfare] recipients, and in 2012 at least twenty-five other states considered proposals to tie welfare cash assistance, and in some cases also food stamps, to drug tests." (Source: The Nation.)
For example, in 2011, GOP Governor Scott of Florida signed a law requiring all applicants for that state's welfare program to take a drug test. And in 2012:
"Congress passed a law paving the way for states to urine-test the recipients of unemployment benefits ... Since then, sixteen states have considered laws tying unemployment insurance benefits to drug tests." (Source: The Nation.)
And, in 2013, in response to various court decisions concerned that mandatory drug testing violated welfare recipients' constitutional rights:
"Rep. Fincher (R-TN) introduced a bill ... that would require states that want to receive full funding for welfare assistance to force its citizens to waive their Fourth Amendment rights and submit to random drug testing." (Source: ThinkProgress.)
One touted justification for drug-testing assistance applicants is that people who've fallen on hard times because of drug problems shouldn't get a taxpayer bailout. In short, if people can't run their lives, or businesses, because of drug use, they shouldn't be subsidized with government money. And, speaking of people who can't run their businesses without a government subsidy, that does brings us back to our largest banks.
Bloomberg News recently reported that America's largest banks receive a federal subsidy of about $80 billion per year, and that, without this subsidy, they would not be able stay in business. To put the bank subsidy in perspective, federal payments under the welfare programs and food stamps combined are about $70 billion per year.
- The 2008 financial crisis, when, in addition to their annual $80 billion subsidy, our banks needed a $400 billion bailout.
- The collapse of Bear Stearns, Lehman Brothers and AIG.
- Five banks (Ally Bank, Bank of America, Citi, J.P. Morgan Chase and Wells Fargo) paid $25 billion to settle claims that they "routinely signed foreclosure related documents ... without actually knowing whether the facts contained in those documents were correct." Seriously, you'd have to be high as a kite, incredibly arrogant, or amazingly incompetent to think you could get away with this behavior.
- Money Laundering -- "Credit Suisse, Lloyds Bank, ABN Amro, ING Bank and now HSBC -- have reached settlements in the past couple of years with the U.S. government for billions of dollars in tainted transactions." For example, "between 2006 and 2010, the Sinaloa Cartel in Mexico, the Norte del Valle Cartel in Colombia and other drug traffickers laundered at least $881 million in illegal narcotics trafficking proceeds through HSBC". Since these banks were doing business, on a large-scale, with drug traffickers, did some bank executives perhaps try samples?
The actions of the financial services industry can only be explained by some combination of bad luck, innocent incompetence, criminal intent, or significant drug use. Unless we ask our bank CEOs (and other senior executives) to "pee in the cup," how will we know whether they "deserve" taxpayer assistance? If this seems far-fetched, it's been widely reported that James Cayne, the CEO of Bear Stearns as it lurched into insolvency:
"Sometimes smoked marijuana at the end of the day ... He also has used pot in more private settings, according to people who say they witnessed him doing so or participated with him." (Source: WSJ, Bear CEO's Handling Of Crisis Raises Issues.)
The banking industry has demonstrated an ongoing pattern of law-breaking behavior, wouldn't be profitable without a massive government subsidy, and is filled with credible rumors that senior bank personnel use illegal drugs. Further, a senior bank executive with a drug problem is in a position to do real damage to our economy, unlike the average person on unemployment insurance. If bank executives don't want to submit to drug testing in exchange for federal aid for their bank, they could always resign.
- Political Donations: No one on food stamps makes substantial political contributions. However, America's financial services industry (broadly defined) donated $650 million to political campaigns in 2012.
- Future High-Paying Jobs: Many of our current political leaders, and their staffs, are tomorrow's highly-paid lobbyists for banks. They might not want to annoy potential future employers.
- Class Bias: Our Congress knows and socializes with bank executives. But how many congressional leaders have shared a meal with a family on food stamps? Or lunched with someone who worked hard for 20 years, lost his/her job in the financial crisis, and now must "pee in a cup" to satisfy the whims of hypocritical politicians?
For a variety of reasons, I believe drug testing of aid recipients is bad policy; the tests are often inaccurate, several courts believe these laws violate our constitutional rights, and so on. But if we're going to require it, let's test our corporate welfare recipients as well as ordinary Americans.
Steven Strauss is an adjunct lecturer in public policy at Harvard's Kennedy School of Government. Immediately prior to Harvard, he was founding Managing Director of the Center for Economic Transformation at the New York City Economic Development Corporation. Steven was one of the NYC leads for Applied Sciences NYC (Mayor Bloomberg's plan to build a new engineering and innovation center in NYC), NYC BigApps and many other initiatives to foster job growth, innovation and entrepreneurship. In 2010, Steven was selected as a member of the Silicon Alley 100 in NYC. He has a Ph.D. in Management from Yale University, and over 20 years' private sector work experience. Geographically, Steven has worked in the US, Asia, Europe and the Middle East. You can follow him on Twitter at: @Steven_Strauss