Monday, June 1, 2015

Distressing knowledge - we spend more money capturing the regulatory process than we do buying elections

Sometimes the news is not the news, but the ancillary information that bubbles up from the news.

The case of former House Speaker Dennis Hastert has been in the news lately. He apparently has been paying money to a blackmailer over some purported sexual incident some decades ago when Hastert was a teacher.

The facts of the underlying allegation are not well known at all. In their absence, the focus seems to have been on two issues.

First, why is the Federal government bringing charges against a blackmail victim. Surely they have the wrong end of the stick. It appears to be that the government is using anti-racketeering and money laundering charges against Hastert. He apparently was structuring his payments to his blackmailer in a fashion that avoided the trigger amounts associated with money-laundering laws. That explains how the government is pursuing him but not really the why. If he is falsely accused, then he is a triple victim: once from the false accusation, once from his decision to pay blackmail money, and once from the Federal government applying a law originated for different purposes to his case. It creates the impression that the federal government is using the law to punish a political opponent, except that Hastert is no longer active in politics. Perhaps it is the administration using the power of the law to create a diversion from all the other bad news that is surrounding it.

The accusation of manipulating the law for political purposes would seem absurd on the face of it but there don't otherwise appear to be many viable explanations.

The second issue to attract attention has been the age old one of how our politicians, not just Hastert but others like Harry Reid, can enter politics essentially penniless and retire as millionaires. It is not exactly what we view as public service. Reid's case is especially murky, though he is only one among many. Hastert's is a little more straightforward. It appears that his wealth accumulation did not occur during his public service, but afterwards as a lobbyist. Still not what you want in a healthy, transparent, effective democracy, but a little less suspect than getting rich during public service.

Now there is new news. George Will: We spend more on lobbying than on campaigns by Jon Greenberg. The data appears to have always been there but it is the circumstances of Hastert's case which is shining light on a disturbing measure of the health of our republic. We depend on transparency and accountability but too often rent-seeking and regulatory capture preclude those prophylactics against corruption.
"Big government becomes big by being deeply involved in the allocation of wealth and opportunity," Will said on May 31, 2015. "Lobbyists are important. That's why we spend more money on lobbying than we do on campaigns. They become important precisely because they know how complicated the government is, where the levers and pulleys and widgets are, to make it work. And he made the most of that value."

Will pointed no fingers but said this was "an unfortunate glimpse of how hard government is."

We were intrigued with Will’s comparison of lobbying and campaigns and decided to look into the numbers. We reached out to Will, and while we didn’t hear back, we suspect he based his statement on federal expenditure data.

According to government figures on the Center for Responsive Politics website, Will is correct. Spending on lobbyists exceeds all the money that flows during elections. And the political scientists we reached said on top of that, a lot of lobbying never makes it into the official tallies.
Hopefully the Hastert case becomes clearer and there is less nefariousness than currently hangs as a pall over it. Regardless of that disposition, it is worthwhile knowing that we spend more on capturing the regulatory apparatus than on buying elections. Distressing knowledge, but worthwhile.

UPDATE: I suppose the alternate headline to this post could have been "It is cheaper to rent politicians than to buy elections"

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