Mark Twain famously observed that, “It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.”
That’s a generalization, of course, but one that makes a lot of sense. Especially since I’ve written about the sleazy practice of swapping earmarks for campaign cash and also about the revolving door between Capitol Hill and the lobbying community.
Indeed, the culture of legal corruption in Washington is so pervasive that even the New York Times had to give credit to Sarah Palin for making it an issue.
Another sign of sleaze in DC is the degree to which politicians manage to get wealthier while in office.
In other words, how is it that some politicians come to Washington with modest amounts of wealth and somehow become multimillionaires? Especially when they are getting richer while the rest of the nation is treading water – even though we know they are some of the nation’s least competent people?
According to an analysis by the Washington Post of congressional financial disclosure data for the period of 1984 to 2009, the median net worth of a member of the House of Representatives, excluding home equity, more than doubled. Over the same period, according to the Post, the wealth of an average American family declined slightly. The Post paints the growing wealth gap between Congress and average Americans as reflecting rising income inequality more generally. But that’s a tough sell in view of other data released yesterday. The New York Times reported that while the median net worth of the richest 10 percent of Americans remained essentially flat from 2004 through 2010, the median net worth of members of Congress rose by 15 percent over that same period. …Why are members of Congress not getting rich? Hoover Institution Fellow Peter Schweizer addressed this question in his recent book, “Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison”. It’s not rising congressional pay because congressional pay has actually fallen in inflation-adjusted dollars over the last 25 years. Members of Congress are getting richer because so many of them are masterful manipulators of their perks and positions in government. For many, that means making lucrative stock deals based on insider information or participation in special Initial Public Offerings. Or it can mean securing an earmark to build a road that doubles the value of a recently purchased piece of property. In short, wealth can come from having the inside connections, specialized information and privileged access that only comes with being a senator or representative.
There are two conclusions to draw from this analysis. The obvious lesson is that big government breeds corruption and illegitimate wealth. Simply stated, politicians wouldn’t be able to accumulate so much unearned riches if government didn’t have so much power and control over the economy.
The second lesson is less obvious, but perhaps more important. As I’ve noted before, perhaps one of the reasons why politicians despise “the rich” and favor confiscatory taxes is that they generalize from their own experiences (as well as from their relationships with powerful special interests) and assume all wealth is obtained immorally.
Indeed, I’ve been mulling this over and think I need to augment Mitchell’s Law and Mitchell’s Golden Rule with something like Mitchell’s Inverse Corollary of Taxation and Illegitimate Wealth. But that’s too wordy, so I’ll have to keep thinking about it.