Lobbying

The Parasite Economy

Government handouts make parasites out of many of us.

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Politicians and lawyers pretend that they are important people doing important work. But often they're important because they are parasites. They feed off others, while creating no wealth of their own.

We all complain about businesses we don't like, but because business is voluntary, every merchant must offer us something we want in order to get our money. But that's not true for politicians and their businessman cronies. They get to use government force to grab our money.

Those people who take instead of producing things make up "the parasite economy," says Cato Institute Vice President David Boaz. It's my favorite chapter in his new book, The Libertarian Mind. The parasite economy, says Boaz, thrives wherever "you use the law to get something you couldn't get voluntarily in the marketplace."

That includes much of the military-industrial complex, "green" businesses that prosper only because politicians award them subsidies, banks that can borrow cheaply because they're labeled "too big to fail," and—unfortunately—me.

All of us are parasites if government granted us special deals. Some parasites (not me) lobbied for their deal. "You might use a tariff to prevent people from buying from your foreign competitors or get the government to give you a subsidy," says Boaz. "You might get the government to pass a law that makes it difficult for your competitors to compete with you."

This quickly creates a culture where businesses conclude that the best way to prosper is not by producing superior goods, but by lobbying. Politicians then tend to view those businesses the way gangsters used to view neighborhood stores, as targets to shake down.

Says Boaz, "You have politicians and bureaucrats and lobbyists coming around to these companies and saying, hey, nice little company you've got there, too bad if something happened to it. … They start suggesting that maybe you need to make some campaign contributions, maybe hire some lobbyists, and maybe we'll run an anti-trust investigation, and maybe we'll limit your supply of overseas engineers. And all of these things then drag these companies into Washington's lobbying culture."

And as I mentioned, it's not just companies that get dragged in. I built a house on the edge of the ocean. People weigh the costs and benefits of building in risky places like that. Without government's encouragement, I would have just built someplace else. But because politicians decided that government should be in the flood insurance business, and then other politicians decided that government's insurance business should offer cheap rates, I did build on the beach.

Even though my property was obviously a high flood risk, my insurance premiums never exceeded $400 a year. Ten years later, my house washed away, and government's insurance plan reimbursed my costs. Today, the federal flood insurance program is $40 billion in the red.

In other words, you helped pay for my beach house. Thanks! I never invited you there, but you paid anyway. I actually felt entitled to the money. It had been promised by a government program! But it was wrong, and I won't collect again. I don't want to be a parasite.

But it's tough, because government keeps making offers. Government handouts make parasites out of many of us.

Compare politicians and politicians' cronies to tapeworms and ticks. Like parasites in nature, the ticks on the body politic don't want to kill the host organism—meaning us. It's in politicians' and regulators' interest to keep the host alive so they can keep eating our food and sucking our blood.

After watching members of Congress applaud President Obama during his last State of the Union address, I came to think that politicians were worse than tapeworms and ticks. The president bragged about American energy production being up. Domestic energy is up, but it's up because of private sector innovation, not government. In fact, it's up in spite of administration rules that make it harder to extract oil from public lands. Yet many in Congress applauded the president's misleading claim.

At least tapeworms and ticks don't expect us to clap.

NEXT: Job Training Ideas in Obama's Budget: Fewer Occupational Licenses but More Credentials. Huh?

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  1. Have I mentioned I like Stossel?

    1. Mustache ride! Get in line!

      1. Why is everything sex with you?

        1. You sound like my wife.

          1. i would parasite her economy, if you know what i mean…

            1. Everyone says that. I did good.

  2. The problem is that ticks are smarter than people in government. Government will eventually bleed society dry. It’s a constant theme throughout history.

    1. Truly, the parasite is the government. All of these others are merely other organisms feeding on the leftovers the parasite doesn’t fully consume.

    2. Government will eventually bleed society dry. It’s a constant theme throughout history.

      Not this time though.

  3. This quickly creates a culture where businesses conclude that the best way to prosper is not by producing superior goods, but by lobbying.

    And quite frankly, this is nearly the perfect ploy to perpetuate big government and to undermine the free market.

    Give an unfair advantage to a business and that business’s competitors have no choice but to lobby for favors. Everyone loses except the government. It’s a self-licking ice cream cone.

    1. Why is everything sex with you? Self-licking ice cream cone indeed.

  4. Stossel! Stossel!Stossel!Stossel!Stossel!

    I love Stossel!

    Simple breakdowns of our problems. It really isn’t the “welfare queens” that are the problem. It is the welfare for businesses.

    1. That’s how it works. If you approve it’s not parasitic, if you disapprove it’s welfare.

      It’s never unconstitutional though, because that would preclude the unconstitutional actions you approve of.

  5. So if someone’s house burns down, should they feel ashamed for building in a potential fire zone and collecting insurance on the backs of all the hardworking premium payers who were sensible enough to live in those places where combustion doesn’t exist?

    1. If they built in an area notorious for frequent brush fires, absolutely. They are morons and should pay for their own idiocy.

      1. See my analysis below re beach houses. The problem is that gov’t has made it impossible for you to behave economically unless you completely eschew certain locations or fields.

    2. places where combustion doesn’t exist

      I knew you were stupid, but that’s just ridiculous.

      1. I was told in a socialist paradise combustion does not exist.

        1. I suppose if they can repeal the law of supply and demand then they must be able to manipulate the laws of physics as well.

        2. “I was told in a socialist paradise combustion does not exist.”

          Yeah, Tony comes up with gems like that.

      2. There’s no oxygen going to his brain, so there’s one place.

      3. Maybe he’s stupid like a fox. He must have already staked his claim on a combustion free environment.

        http://www.reuters.com/article…..5F20150203

        But, my guess he doesn’t realize that people who build in wildfire zones don’t get cheap, subsidized insurance from the National Flood Insurance Program like the people who live in flood zones do. My house is in a wildfire zone and believe me my premiums are higher because of it. I also bet he doesn’t realize that most of the money the NFIP pays out in claims goes to beachfront properties. Maybe I’m I have a bit of class envy in me. But, if you can afford beachfront property, you can afford the full coast to insure it.

        1. I suppose it is an improvement when libertarians stop obsessing over poor people getting food to eat and focus on the handouts to the rich and well-connected. Welcome to the table. Liberals have been sitting at it for decades.

          1. You obviously don’t pay attention to the articles on Reason do you (if you read them)? Name one Libertarian contributor who espouses handouts to the rich and well-connected? If you would actually take the time to read the articles you comment on here, you would see that they pretty much universally slam government handouts. Especially handouts to the rich and well connected. As far as libertarians obsessing over the poor people getting food to eat. Again, maybe if you actually read the articles you would find out that that the complaints are not about hungry people getting food. But, about how ineffectual and oft times counter productive most welfare programs are. But, hey, let’s not take an actual cost benefit analysis of how we are spending our money. It’s a lot easier to just throw more money at it isn’t it? That way Tony can feel like he cares for the poor without having to actually think about them.

            1. Motherfucking THIS!!!

          2. Tony:

            focus on the handouts to the rich and well-connected. Welcome to the table. Liberals have been sitting at it for decades.

            Yeah, you liberals really stick it to those politicians and their cronies. Your ideal political world has no hierarchy, really. Promise.

          3. Tony|2.4.15 @ 3:23PM|#
            …”Welcome to the table. Liberals have been sitting at it for decades.”

            Can you say Solyndra, you lying piece of shit?

          4. It would help if you were actually a liberal you progressive fucking fascist.

          5. Right, because liberals don’t give big handouts to the rich and well connected! Oh wait, yes they do. I must have misremembered.

            -Brian Williams

    3. Only if they are getting a subsidized rate paid for by people who built in safer areas. If you want to live on the beach there are obvious benefits as well as extra costs like the cost of higher insurance. Those should be your costs not the costs of someone who lives in a dusty plain in Iowa. The Iowa guy doesn’t get the ocean view so why should he pay for it?

      Insurance companies already price policies based on the risks where you live. The government prices policies based on politics and makes others foot the bill. Apples and oranges.

      1. Tony’s brain is broken. You see, to him not giving is taking and not taking is giving. So if the government doesn’t subsidize flood insurance, it is taking money away from people who live on flood plains while at the same time giving that money to the rich people who would have been forced to pay the subsidies. Can you imagine being that stupid? It hurts just thinking about it.

        1. I know all about Tony. I have been reading a lot longer than I have been posting. When it comes to intellect he definitely didn’t win lifes lottery and apparently forgot to mail in the ticket for a second chance drawing.

        2. You don’t know how this program works at all do you?

          1. Clearly you understand it differently than Sarc et al. Please explain. How does it work?

    4. So if someone’s house burns down, should they feel ashamed for building in a potential fire zone and collecting insurance on the backs of all the hardworking premium payers…

      I don’t know, moron, are the premium payers being forced to pay for someone else’s ignorance at the end of a gun or is it a voluntary transaction involving free market pricing?

      1. Tony does not understand the definition of the word “Voluntary”.

    5. Not understanding the simple actuarial equation, I can understand why you’re confused.

      Let’s say a fire comes through the area and wipes out all buildings every 10 years. Let’s say your house costs $1,000,000 to replace. Let’s assume there is no inflation.

      Now, how much would an insurer have to charge in order to make money?

      If you answered “over $100,000 a year”, congrats, you can read and do simple math!

      Now, the government found out that no-one is willing to insure for that amount because there is not enough people willing to pay that much to make sense for a business to insure that risk bracket. But people build there anyway (because they’re stupid).

      Then these people whine to government to “fix it” and government does it (because they’re stupid and/or evil).

      So, in conclusion, the poor taxpayer ends up paying for the rich idiot’s home every decade or so.

      So why in the heck do you want to subsidize the rich idiot’s poor choices?

      1. Some people dont like it when the math doesnt correspond to the way they want the world to work.

        And then they call their dislike of reality “market failure”.

        1. I’d call it “market success” as the market just told the people, “You’re idiots, no.” The government is not that smart.

      2. I don’t know that this is a program for rich people, as the bulk of the payouts since its inception have gone to Louisianans. But what’s supposed to happen is localities get the insurance option if they agree to do flood risk mitigation in high-risk areas, and it was supposed to be self-supporting. It hasn’t quite worked out that way, but it’s really just not near the top of my list of concerns. It’s really too much when someone like John Stossel has bought in to an anti-collectivist ideology to such an extent that he feels guilt over things that he’s perfectly entitled to.

        1. Who decide who is entitled to what? You?

          Count me out.

        2. Wait, “things hes … entitled to do?”

          There is a lot there that he is entitled to. Owning the home, trading goods/services, buying insurance, rebuilding, mocking himself, etc.

          One thing he is NOT entitled to is your money, Tony. That is YOUR money that, I assume, you worked hard for. Remember, had he not taken it away, you could have done any number of noble things, like: buying more Che Guevera t-shirts, giving large bills to homeless people, donating to ThinkProgress, buying cotton to stuff in your ears when people start talking real economics, fancy underpants for you or your loved ones, or just up-and-donating to the US Government.

          Instead, he, the rich white freedom-loving bastard that he is, used your money to pay his insurance premium and then spent his money on things he loves, probably things like additional copies of 1984, moustache oil, donations to the Koch brothers, his CPA to reduce his tax burden, new suspenders with America Flags on them, etc.

          He is not entitled to your shit. Nobody is but you. THAT is the issue, none of this “anti-ollectivist” nonsense you are hiding behind.

          1. Just want to say Simon Jester’s takedown of Tony is my new favorite all-time comment on Reason. I got wood just reading it.

        3. Tony:

          It’s really too much when someone like John Stossel has bought in to an anti-collectivist ideology to such an extent that he feels guilt over things that he’s perfectly entitled to.

          That sounds like a stupid way of saying that it’s all too much that Stossel takes what he says seriously.

          Seriously?

        4. Why is he “entitled” to my money to pay for his house?

    6. If I build a house on Beach Front property I am going to pay a higher premium on my house insurance. If my house gets destroyed during a hurricane. I am owed insurance money in order to rebuild it.

      Let me guess Tony. This was some sort of sideways argument for Obammacare.

      1. BTW Obammacare distorts the costs of people who make bad health decisions. People who make bad health decisions would be paying less for healthcare, and health insurance in a free market system.

  6. Help me be a productive member of society! Buy my books and tell others to buy them!

    (Seriously though, my day job sucks)

    1. Buy my books and FORCE others to buy them AT INCREASED COST!

      FTFY.

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  8. I’m going to show you how I make a living online! Here is a company that will pay you $100 if you don’t make money in 24 hours. Take a look this company has an A+ Business Bureau Rating
    === ?w?w?w.M?o?n?e?y?k?i?n.c?o?m?

  9. Is this the article where I learn that not only will rich people like john stossel enjoy a way of life that I cannot afford (I.e. A beach house) but that they are my moral betters as well?

    1. If he isn’t stealing, or using the gov’t to steal for him, then yes.

    2. ABSO-FUCKIN’-LUTELY.

      People like you are a double-loser. Must be a hard pill to swallow.

      Let me pose something to you, AS – you clearly think that being rich, in of itself with no other considerations, is “bad”. Rich people owe others. If you became rich somehow through legitimate, productive means … would you hate yourself immeidately? Would you keep the money, or give it away? Would you feel morally obligated to let relatives and strangers decide how to spend your money?

      1. amsoc doesn’t speak hypothetically, and let’s not pretend he’s going to find himself well-off anytime soon.

    3. If you haven’t learned that by now you probably never will. Some people just can’t be taught.

    4. AMSOC. You mean “Rich People” like you, that come from rich parents, who get to cheat out of paying your own bills because of Nepotism. While the rest of us “Proles” have to stick to our contracts to your crony, family owned banks get “Fucked”.

      Fuck you Rich Boy.

    5. american socialist|2.4.15 @ 5:51PM|#
      “Is this the article where I learn that not only will rich people like john stossel enjoy a way of life that I cannot afford”

      Shitpile, if you paid your mortgage, maybe you could afford another house.
      But I’m sorry you can afford food; if the world were just, you’d starve to death.

    6. The latter only bothers you because the former is true.

    7. amsoc:

      Is this the article where I learn that not only will rich people like john stossel enjoy a way of life that I cannot afford (I.e. A beach house) but that they are my moral betters as well?

      It’s not that he’s rich. It’s that he’s in the media.

      And you learn that at journalism school.

  10. But because of the gov’t-subsidized insurance, the prices of the land the houses are built on are bid up. If it weren’t for the gov’t subsidy, people would still build beach houses, but they’d do it sensibly, making them cheap, not expecting them to last for decades. You’d still buy insurance against the chance the hurricane that ruins it will come this year, and such insurance would be offered by someone.

    But the combination of the subsidy and anti-storm codes combine to preclude that option. You’re not going to build a cheap beach shack on land that’s priced for expensive houses, nor would you do just those things needed to bring the house up to the required code, because once you’ve spent that much, you’re going to want more pleasure from your investment. So you’re pretty much forced to build uneconomically, or to just avoid the possibility of a beach house at all.

    So I don’t blame anyone for taking advantage of the subsidized insurance. It’s like teaching, where if you want to go into that as a career, you pretty much have to resign yourself to probably doing it at a tax-supported institution. What should people do, just avoid those fields that are favored by gov’t, so as to be fair to everyone else but unfair to yourself?

  11. Given that I am forced to pay high taxes in order to pay for others receiving handouts, I certainly am going to insist on getting my cut as well. I’m all for scaling that system back.

    For example, I think the mortgage interest tax exemption should be eliminated, but only if income taxes are reduced proportionately (personally, I’d still be worse off, but it would be a sacrifice I’d be willing to make).

  12. Biologists define 3 types of long term relationships between animals as follows: Mutualism is when both animals benefit, commensalism is when one animal benefits while the other is unaffected, and parasitism is when one animal benefits while the other is harmed.

    For decades, experts in animals behavior have tried to find examples of persistent altruism (defined as a relationship where one animal is harmed and the other benefits) to no avail, because if they just labelled those relationships as parasitism, they would be harder to sell.

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