The K Street Feedback Loop

Julian Sanchez | January 10, 2006

Russell Roberts has an amusing post at Cafe Hayek in which he dissects a Washington Post profile of the Coushatta Tribe in Louisiana, erstwhile clients of ex–power broker Jack Abramoff, who routinely referred to the Native Americans who hired him to lobby on his behalf "monkeys," "troglodytes" and "morons." Though the Post piece paints the tribe as victims bilked out of some $32 million in lobbying fees by Abramoff, Roberts notes that they seem to have gotten their money's worth: Abramoff succeeded in blocking another tribe's plans to build a casino that would have competed with the Coushatta Casino Resort, which pulls in some $300 million annually in revenue. So it's a reasonably safe bet that the benefit of getting to keep their status as the only game in town was worth well over the $32 million they paid.

Roberts wraps up with an important general point: "Any time the government hands out monopoly rights, it's not surprising that the beneficiaries will pay large sums of money to keep those rights intact and free from competitors." Given Majority Leader–hopeful John Boehner's view that "adding more new rules isn't the answer" to K Street corruption, it's tempting to view his focus on earmark reform that would "distinguish...between legitimate earmarks with a clear local need and those for which the merits are less well demonstrated" as a disingenuous effort to seem proactive without alienating deep-pocketed lobbyists. But there's certainly a feedback loop in effect between expansive federal powers and political corruption.

Lobbyist dollars flow in at such a high rate because a potent government with expansive powers that's heavily entangled in the nation's economic life is able to provide decent return on investment. As long as that fundamental fact remains, it will remain extraordinarily difficult to keep the moneychangers out of the civic temple. The recipients of concentrated benefits have a strong motivation to find a way around whatever restrictions are in place, and those paying the diffuse costs of enriching the well-connected have a far lower incentive to rigorously police the system. In the first election after McCain-Feingold took effect, spending on federal candidates rose. But, of course, so long as that money's flowing in, the political motivation to really shrink government is likely to remain as enervated as it appears to be in today's GOP.

If the vicious cycle's ever to be broken, I imagine it would have to be in one fairly dramatic, high-visibility reform—tinkering at the margins would quickly be captured by lobbyists, since the political returns (in terms of popular opinion) to legislators from each incremental change would be relatively low. I find myself wondering whether something like Yale political scientist Steve Ackerman's "Patriot Dollars" proposal, which would combine public funding with individual choice by allowing each citizen to allocate some fixed sum among candidates, might not be the lesser of the available evils.

Comments

|1.10.06 @ 5:59PM|#

I get such an enormous kick out of reading of how lobbyists and their money corrupt politicians. They do, in exactly the same way people who pay protection money corrupt the Mafia.

Reform can't "fix" the system, because it ain't broke. It's working just fine, doing exactly what it was designed to do.

|1.10.06 @ 6:09PM|#

Interesting proposal. It meets the major goals of campaign finance regulation, really. By restricting citizens' donations to a fraction of what's legal now, it enhances the advantages federal incumbents have merely by virtue of being in office and having access to the public-contact resources Congresscritters (for one) have. Further, it means any third-party candidates have to pull vast crowds of pre-existing support out of their asses before they can engage in trying to make the public aware of them.

Sounds win-win to me, at least if you're part of the Republican or Democratic machines.

|1.10.06 @ 6:52PM|#

If you want to stop the funding and its distortions, the radical answer is to make representation in a Republic a selection like jury selection; randomly pick from a qualified pool. No campaigning, no nothing. The Romans used to do this, or partly, in the Republic days, I do believe. As it became an empire, campaign costs became part of the incentive as well as imperial jobs becoming part of the expenditures (from subject-nation coffers of course); one reason for Caesar's invasion of Gaul was to pay his huge campaign expenses, I do think.

|1.10.06 @ 7:13PM|#

"Lobbyist dollars flow in at such a high rate because a potent government with expansive powers that's heavily entangled in the nation's economic life is able to provide decent return on investment."

Yes, and people rob banks because that's where the money is. Should we not have banks?

Personally, I think banks should have security protocols, and guards to keep an eye on things.

Windypundit|1.10.06 @ 10:32PM|#

Personally, I think banks should have security protocols, and guards to keep an eye on things.

All banks limit the amount of money at each teller's window, reducing the incentive to rob banks. If we reduce the power of government, it will reduce the incentive to bribe officials.

Robert|1.11.06 @ 1:58AM|#

I've imagined campaign finance reform similarly, and concluded the necessary cure would be worse than the disease.

Thanks to the technologies, communication today is amazingly cheap by historic standards. Anyone who wants to find out about candidates for elected office can do so quickly & cheaply. However, technology can't increase the supply of what the "sellers" are really after: attention. People today are close to saturated with inbound communications, and the only way one message can get thru is by pushing aside another. From the POV of the target, that can be done 2 ways: voluntarily (i.e. what that person is interested in) or involuntarily (by presenting that person with something s/he didn't really want, which is the nature of almost all advertising).

The proposer was correct that money will find a way to flow to campaigns no matter what, so that limits are futile. Therefore if fairness to the candidates be the criterion, only flooding the market with so much in terms of advertising resources will work to make campaign donations superfluous. Whether it be done by voucher (as in the proposal), mandate (licensed broadcasters forced to provide air time), or subsidy (free postage, gov't printing), it must in effect crowd out other things for people's att'n.

Result: TV & radio programs pushed off the air for weeks before each election, to make room for political ads. No room in your mailbox for any other correspondence. That's the only way to make sure you pay att'n to some of it, and that all candidates have an equal chance to get your ear & eye.

The voucher proposal has the advantage, or disadvantage, over other types of subsidy that its results would be concentrated in a few contests rather than being spread over all elections everywhere for all offices. However, if the voucher be sufficient to swamp regular campaign finance, it'd just bid up the prices of advertising media.

|1.11.06 @ 8:24AM|#

Windypundit,

And yet the banks still have just as much money. In this metaphor, the government is the bank as a whole and tellers are Congressmen. A government version of limiting the amount at each teller would be something like earmark reform, meaning that more of the money is "in the vault" - which would seem to be analogous to having spending and regulatory decisions made by the bureacracy, according to standards and directives that leave them little discretion.

I don't think your teller example leads to where you want it to lead.

Warren|1.11.06 @ 9:23AM|#

Lobbyist dollars flow in at such a high rate because a potent government with expansive powers that's heavily entangled in the nation's economic life is able to provide decent return on investment.

If the vicious cycle's ever to be broken, I imagine it would have to be in one fairly dramatic, high-visibility reform

BINGO! Giving buckets of cash to congress people, is the inescapable consequence of putting the government in charge of everything. Perhaps the single most depressing thing about American politics, is how many people actually believe the corruption resulting from past expansions of government will be made better by future encroachments.

If the government is a bank, then the robbery is an inside job. The people in charge of security are the one's doing the stealing. Putting more cash in the vault will always result in higher losses for the depositors.

The only way to break the cycle is to reduce the size and scope of government. What's needed, is to start taking the tenth amendment seriously, but it ainna gonna happen. So rent-seeking is here to stay, and every new law passed to combat it, is just going to make it worse.

Larry A|1.11.06 @ 12:37PM|#

What a farce.

<For example> Representatives who vote for gun control get contributions from people and organizations who support gun control. Representatives who vote against gun control get contributions from people and organizations who oppose gun control.

Most of the campaign money is spent on advertising telling voters that the representative's opponent votes wrong on gun control.</example>

Where's the problem?

|1.11.06 @ 4:15PM|#

Apropos this discussion, and especially Mr. Hogan's comment above, permit me to direct your attention to my article at TCSDaily:
http://www.tcsdaily.com/article.aspx?id=011006B