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The nation’s poor aren’t the only ones benefiting from government poverty programs. Large corporations, most notably JP Morgan Chase (NYSE:JPM), are enjoying lucrative profits thanks to procedural stipulations included in the language of bills like Obama’s 2010 Healthy, Hunger-Free Kids Act.
Language in the legislation requires all state agencies receiving their funding through government welfare programs such as Women, Infants, and Children WIC to implement Electronic Benefit Transfer EBT systems, thus opening the door for potential corporate profit. State agencies enter into contracts with companies like JP Morgan Chase and Affiliated Computer Services (ACS), a subsidiary of Xerox, to administer their EBT card systems. EBT cards function similarly to debit cards, with the administering corporations benefiting on a transactional basis.
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According to the Agriculture Department, which is responsible for overseeing EBT-using programs like the Supplemental Nutrition Assistance Program (SNAP, the official name of the food stamps program), the market for these state contracts is dominated by JP Morgan Chase and ACS, which together hold multi-year agreements with 39 states.
Most concerning, however, is the degree of influence on policy such arrangements threaten to give companies that become involved with programs which, on their surface, are intended to help feed hungry children. Since the implementation of EBT was mandated in 2002, JP Morgan’s political contributions to members of congressional agriculture committees have risen from a modest $82,302 to $332,930, perhaps a sign that the company is eager to have the ear of policymakers.
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