Peter Namtvedt's picture

Reckless Spending due to Lobbyists?



Introduction

The founding fathers loathed direct democracy as much as royalty. Instead, they built a Republic with elected representatives. They hoped that a collective of select freeholders would create better laws than the mob.

Now, of course, in our republican form of government our representatives are allowed or even encouraged to vote their conscience instead of just representing their constituents. Rationality, wisdom and seniority are intended to temper the factious and precipitous tendencies of public opinion.

The core issue that this ignores is that no one can totally omit from consideration what is of interest to the public. Putting principle above interest is desirable, but seldom obtainable. The theory proved impractical.

To whom does an elected representative owe her dedication?

The power vested in elected officials cannot be guaranteed to be used in the way the voters intended or in the way the elected ones would do if acting rationally according to principle instead of their own interest. This power is thus vulnerable to other forces than those of the electorate and reason: these powers will be for sale. Is there anything, after all, which cannot become a commodity, cannot be bought and sold? How does this work out in the details?

Some known causes are involved: promising voters one thing on laws or regulations and then voting for the opposite in return for some meals, vicuna coats, investment opportunities, free vacation flights, contracts for future employment, etc., paid for by lobbyists?

Many problems are related

But the work of lobbyists is not the only problem. Congress has power and money which their constituents want used on their behalf. "They" are not a singularity. "They" are multiple, with different goals. They all want different legislative results. They bring legitimate needs, needs for roads, bridges, hospitals, libraries. They bring needs that their constituents at home do not want to pay for.

The constituents include the voters who elected them and other individuals and groups who either helped get them elected or who promise future help in getting re-elected and/or benefit in other ways. Here are some notable examples from history:

"The scandal of the past that most closely resembles the current uproar over lobbying excesses is the one that struck the Eisenhower administration in June 1958. At that time, House Democrats charged that a Boston businessman — Bernard Goldfine, who was having problems with the Securities and Exchange Commission — had paid hotel bills for Eisenhower's chief of staff, Sherman Adams, and given Adams an expensive vicuna coat. Adams , in turn, interceded for Goldfine with the SEC." USA Today
From the 12/18/2006 USA Today:
"Rep. Charles Rangel, D-N.Y., spent a weekend on St. Thomas in November 2005 — his travel and hotel paid for by a New York-based newspaper as part of its annual gathering on U.S.-Caribbean business issues.

"Under congressional rules, Rangel was required to disclose the trip publicly within 30 days. But he didn't report the it for another five months, congressional records show. He wasn't alone, according to a new analysis of congressional travel to be released this week.

"In 2005, 53 members of the House and Senate did not publicly report trips paid for by outside groups within 30 days of the travel, according to PoliticalMoneyLine, a research firm that tracks money in politics. Instead, the trips were reported months later when lawmakers filed yearly reports that outline their personal finances and list gifts, including travel.

"Altogether, the group found 157 domestic and overseas trips paid for by outside groups on the annual reports in 2006, that had not been disclosed in 2005. The group found trips by 28 Republicans, including former representative Tom DeLay of Texas who resigned in June, and by 25 Democrats.

"It's not clear how much these trips cost. Lawmakers don't have to provide that information even in their annual reports.

"Late travel filings are a "chronic problem," said Melanie Sloan, executive director of the liberal-leaning Citizens for Responsibility and Ethics in Washington, a watchdog group. That means the public lacks real-time information on whether the privately funded trips influence pending legislation," she said.
USA Today

Of course the ostensible reasons for the lobbyists advocating their causes is "the public interest." Never mind that they are all special interests rather than the general welfare. Rarely will the representative or senator hear words like, "if you don't…" or "in return for this favor, we will..." They may hint at how additional support might assure victory in some upcoming election. In meetings where no requests for specific votes come up there may be firm offers of support for re-election and/or assurance of future employment or other future ways in which the elected politician will be benefited.

Congress controls a giant cookie-jar. They themselves can hardly enjoy directly a single bite of the contents. But they can trade cookies for favors. The cookies are "given" away in the name of giving help to various parts of the economy and the welfare of various groups of citizens. Repayment can come in many forms, most of which are not delivered at the present time. Future delivery of return-favors fills the bill. When government employees and elected officials retire they can then collect repayment in the form of lucrative investment opportunities, jobs, often jobs as lobbyists!

To lobby means to conduct activities aimed at influencing public officials and especially members of a legislative body on legislation. Ordinary citizens cannot afford to travel constantly to Washington, DC to button-hole senators and representatives in the lobby. They must economize, they must organize and select a few who will represent them. Their cards and letters are politely answered and usually ignored. Those who mount the strongest effort in the hallways and lobbies of the Capitol will be those who have the most money available for such efforts. And among those, they will be most successful who have something to offer in return for getting senators or representatives to vote for their cause. The strongest are corporations or entire industries.

And the resources at the disposal of congress is considerable.

In 2006 the total GDP of the United States was 14 trillion dollars. Without the burden of government this could have been much greater (doubled, in my estimate). But, directly or indirectly, the government took out of our pockets over 2.7 trillion dollars, partly in individual income tax, social security "contribution," the employer's share of the social security "contribution," state income taxes, sales taxes, excise taxes, and built into the prices of everything we buy are the corporate income taxes, fees, licenses, the cost of compliance with regulations, loss earnings on savings and investments due to the total sum of taxes taken. Furthermore our income and savings are hurt by and inflation (increasing the money supply faster than GDP growth), and borrowing, which hits annually with interest payments and eventually when the borrowing has to be repaid. That 9 trillion dollar debt is surely a serious drag on the economy, reducing the value of what we have and earn.

Whoever is in charge of spending such a large sum, that they cannot directly take, must be tempted to spend some in wasteful ways, and spend some in the interests of friends.

Attempts at solving the problem

Laws have been enacted from time to time to obligate lobbyists and congress members all to disclose what goes on. Such reform actions do not always strike at the biggest part of the problem. New laws may single out mere groupings of individuals seeking to magnify their voice for restrictions, while large lobbyist operations are allowed to do their work freely. Small groups operating openly may lose out to large groups operating secretly.

One proposed reform in this area would require grass-roots groups of individuals (who share a viewpoint and want to join together to make their voices heard more effectively), to file financial records as rigorously as banks and report donor names, etc. At the same time, no such "regulation" is being proposed for large national political action groups or lobbyists. Or the reporting required is too costly for the small groups.

It would be common sense to say that voters have the opportunity to tell their representatives what they expect of government and of the representative. This should be open to them before and after elections. This should be open to them to do as individuals and as groups. The unstated assumption is that the representative would most likely be re-elected if he or she agreed to do these things, to support their causes. No monetary awards should be discussed.

By logical extension, individuals or groups should be able to do this regardless of what cause they espouse, whether it is on behalf of small groups or large, poor or wealthy, whether seeking fair employment practices, protection of rights or property or seeking fewer government obstacles to doing business. As soon as rewards in money or kind for the representative enters the discussion, the advantage swings immediately in favor not of voters but rather in favor of those who have money to spend, gifts in kind, business opportunities, etc.

Men are clever enough to disguise the rewards and prevent detection. No laws passed by the foxes will ever keep foxes from extending their roles as tenders of the chicken-coop to outright raiders. They don't have to break into the coop themselves. They just open it for their friends.

The problem is the legislative bodies' power to dispense. They can dispense better conditions for doing business, relief for poverty, tariffs, limits on production, or any manner of spending on "public interests" (read: "favoring special interests"). In the name of promoting the general welfare, they can spew out any number of acts of specific welfare.

The problem is WELFARE .

Welfare is not just what government provides those who lose their jobs or families that lose their breadwinner. Welfare encompasses farmers who are good at producing what is already plentiful or prone to grow what is most profitable to them rather than what politicians deem socially preferable. Welfare is also paying then not to grow certain crops or raise pigs. Welfare helps a steel industry that has become old and stodgy and uncompetitive, pays for purchase and storage of "excess" farm products (later sold cheaply abroad or given away, which itself causes additional market problems that demand government solutions!). Welfare includes other favors and tax breaks for businesses. It covers bank failures. It covers regulations and subsidies to companies facing "brutal competition."

Conclusion: how to solve the underlying problem

Instead of focusing on the symptoms, we should get at the root of the problem. The problem is two-fold:

  1. The problem is not lobbyists but turning “general welfare” into “specific welfare.” The welfare or effectiveness of how the federal government serves the states is true general welfare. General welfare does not mean redistribution of wealth, continuing government growth and the thousands of ear-marks or pork that Congress enacts. It has to do with maintaining a good union of the states.
  2. The problem also is the immense resources that government has to dispose of. It is too tempting to both spend money in wasteful ways and on things that turn out to benefit the lawmakers, when you are looking at over 2.7 trillion dollars, over 19% of what you and all the households in America earned.

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