When you spread food out on a picnic table, you can expect
ants. When you put $3 trillion on the table, you can expect special
interests, lobbyists and pork-barrel politicians.
That's the real lesson of the Abramoff scandal.
Jack Abramoff may have been the sleaziest of the Washington lobbyists but
he's not unique. As the federal government accumulates more money and more
power, it draws more lobbyists like honey draws flies.
People invest money to make money. In a free economy they invest in
building homes and factories, inventing new products, finding oil, and other
economic activities. That kind of investment benefits us all -- it's a
positive-sum game, as economists say. People get rich by producing what
other people want.
But you can also invest in Washington. You can organize an interest
group, or hire a lobbyist, and try to get some taxpayers' money routed to
you. That's what the farm lobbies, AARP, industry associations, and teachers
unions do. And that kind of investment is zero-sum -- money is taken from
some people and given to others, but no new wealth is created.
If you want to drill an oil well, you hire petroleum engineers. If you
want to drill for money in Washington, you hire a lobbyist. And more people
have been doing that.
The number of companies with registered lobbyists is up 58 percent in six
years. The amount of money lobbyists report spending has risen from $1.5
billion to $2.1 billion in that time, according to the PoliticalMoneyLine
Web site, which compiles data from public reports.
And why not? After all, federal spending is up 39 percent in the same
period. That means another $640 billion a year for interest groups to get
their hands on.
With federal spending approaching $3 trillion a year -- and even more
money moved around by regulations and the details of tax law -- getting a
piece of that money can be worth a great deal of effort and expense. That's
why they call the hallway outside the Senate Finance Committee "Gucci
gulch," because that's where the lobbyists in their expensive shoes hang out
waiting to buttonhole members of Congress and their staffs.
Nobel laureate F.A. Hayek explained the process 60 years ago in his
prophetic book The Road to Serfdom: "As the coercive power of the
state will alone decide who is to have what, the only power worth having
will be a share in the exercise of this directing power."
The United States is not Russia or Nigeria, states where government power
really is the only thing worth having. But when the government has more
money and power, then more of society's resources will tend to be directed
toward influencing government.
A study in the Journal of Law and Economics found that 87
percent of the increase in campaign spending over an 18-year period was
attributable to the rise in federal spending during that period.
Lobbyists use a broad range of verbal and political
techniques to influence legislation. One widely-used tool is the junket, a
trip for legislators paid for by the lobby. The junket is corrupt. It
amounts to bribery-lite, because a basic fact of human psychology is that
when person A gives something to person B, then person B feels an obligation
to person A. Specific examples include all-expenses-paid conferences at
luxurious resorts, fully paid trips to
wining and dining. Although these goodies
are duly reported on Congressional
financial disclosure forms, they are then
typically ignored because the Democrats and Republicans
have an understanding that they will look
the other way. Tom Delay’s
trip to Korea shown on Schedule VII of his
2001 form got him into trouble because the lobbyist had registered as a
foreign agent. More typically, Mr. Delay spent 10 legal days in Kona, Hawaii
in 2002, and the American Association of Airport Executives
reimbursed him for $5,967.28.
Another form of corruption is the revolving
door between government and the influencing organizations – the lobby
groups, foundations, trade associations, corporations, universities, and
think tanks. "Lobby Shops Salivate as Big Names Hit K Street" one
headline reads. Powell Moore, a senior
lobbyist at McKenna, Long and Aldridge, has had "stints in the Nixon and
Reagan administrations and at the Lockheed Martin Corp.," and has been
"Donald Rumsfeld’s chief liaison with Congress for nearly four years."
Newly-minted lobbyists who are old Congressional hands include Sen. Don
Nickles, Rep. Billy Tauzin, and Rep. Jack Quinn. "A seemingly endless list
of staffers has moved as well."
This corrupt activity is wrong, pure and
simple. It is very difficult for government officials to act objectively if
they have the expectation of being rewarded by cushy jobs by the very groups
that they are legislating for while still in office! If a Congressman votes
against a measure that benefits Boeing, is Boeing more or less likely to
hire him when he retires? Or will Boeing hire its "friends"?
Abramoff specialized in manipulating regulations, especially the
licensing of casinos. If gambling wasn't so tightly licensed and regulated,
then it wouldn't produce extraordinary profits and lavish lobbying. He
excelled at crassness and cynicism. But his efforts were small potatoes
compared with the hugely expensive and complex programs of the federal
government and the lobbying generated by all that spending and regulation.
During the 1970s, when Congress created massive new government
regulations, businesses had to invest more heavily in lobbying. Some of it
was defensive -- to try to minimize the cost and burden of regulation.
But of course some of the lobbying was more cynical, to ensure that costs
fell more heavily on competitors. One study in 1980 showed that 65 percent
of the CEOs of Fortune 500 companies came to Washington at least every two
weeks. That was up sharply from 1971, when only 15 percent of CEOs visited
Washington even once a month.
In 2003 Congress passed a trillion-dollar prescription drug benefit for
Medicare recipients. Not surprisingly, there was more lobbying on health
care than on any other issue that year, some $300 million by
PoliticalMoneyLine's calculation. AARP was the biggest single spender. But
unions and pharmaceutical companies accounted for most of the total.
In most states education is the biggest budget item, and the teachers
unions are the biggest lobbyists. As states start to spend more on Medicaid
than on schools, health care lobbyists may become more numerous and
effective than the education establishment.
Meanwhile, the taxpayers have little voice in the halls of Congress. The
National Taxpayers Union spent less than $175,000 on lobbying in 2004. And
the NTU is one of the very few organizations whose lobbying is aimed at
decreasing the size and overall reach of government.
web definitions of lobbying point to goals
such as a specific cause, or laws that further one’s own interest or inhibit
those of opponents, or establishing an individual’s or organization’s point
of view. This means that lobbyists usually, but not always, are working for
the private interests of their sponsors or themselves. They are generally
not working for the "General Welfare" but their own welfare. Since the door
to such activity has been constitutionally opened by the Supreme Court, the
lobbyists and their backers naturally have walked in. That all of this works
to the detriment of society has long since stopped being noticed.
All of this lobbying, influencing,
pressuring, hiring, and to-and-fro movement of personnel is entirely legal.
It’s also entirely sensible given the way the government operates, but it is
corrupt. Corruption naturally accompanies the state. The state is plunder,
there for the taking. It’s Treasure Island. One only needs the treasure map
and a properly outfitted ship. The Jim Hawkins of today is a bright young
law school graduate. They come a-flocking. Columbia and Barnard students
even have a
Lobby Day in Washington. We have
The state pays out a set of valuable prizes
in the form of laws, subsidies, taxes, regulations, tariffs, agreements,
contracts and policies, jobs, positions, power, access, credential building,
and career enhancement. Competition is keen. The American get-up-and-go
spirit is far from dead. Given the rules of any game and given an
opportunity to play, Americans will be there aiming to win.
For the time being, we are living with this
system, so what can we say at the margin about it? Can we still identify the
relatively good guys and the bad guys, the relatively good lobbies and the
Yes. The good lobbies are those that are
seeking things that libertarians can applaud, which include lowering
aggression, repealing intrusive laws and regulations, lowering taxes,
cutting programs, and enhancing freedoms while the bad lobbies are those
that are seeking more aggression, more coercive laws and regulations, higher
taxes, more programs, and fewer freedoms.
Unfortunately, as long as the federal government has so much money and power to hand
out, we'll never get rid of the bad lobbyists like Abramoff. Restrictions on lobbying deal
with symptoms, not causes.