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Archive for the ‘Lobbying’ Category

No matter how much I pontificate about Washington corruption, there’s no way I can get across the true extent of the DC establishment’s self-serving behavior.

Washington is rich because government is big and the beneficiaries of this system are enjoying their status as America’s new gilded class.

It’s even gotten to the point where children and other family members also put their hands in the cookie jar.

I guess we can call this a system of hereditary corruption. Heck, maybe we can even create hereditary titles for this new elite. The Duke of Pork. The Earl of Sleaze. The Marquise de Cronyism.

Just in case you think I’m exaggerating, check out these blurbs from a Daily Beast article.

Connected children of political families catching a break is something we Americans are plenty used to—there would be no Kennedy or Bush dynasties without the public’s acceptance… But it might be that Americans are less aware of political family power plays when they’re not accompanied by gripping and grinning and kissing our babies for cameras and votes. …“Members of Congress basically are profit centers for their entire families,” says Melanie Sloan, Executive Director of Citizens for Responsibility and Ethics in Washington.

The article cites examples of this unseemly process.

Nathan Daschle, son of former Senate majority leader Tom Daschle, …did a stint at a D.C. firm before heading to the Democratic Governor’s Association (where he eventually served as Executive Director), and now works for Clear Channel Media as its Executive Vice President for Political Strategy. …then there are the lobbyists—that professional amalgam of business and politics—the litany of which reads something like an Old Testament family tree. There’s Andy Blunt, son of Senator Roy Blunt and brother of former governor Matt Blunt; Andrew Coats, son of Senator Dan Coats; Scott Hatch, son of Senator Orrin Hatch; David Roberts, son of Senator Pat Roberts; Shantrel Brown Fields, daughter of Rep. Corinne Brown; Giliane Carter, daughter of Representative John Carter; Sean King, son of Rep. Peter King; Clark Mica, son of Rep. John Mica.

As you might expect, this incestuous system produces spectacular examples of wasteful and counterproductive spending.

…sometimes there is trouble in the paradise where business and politics and family meet. There’s the case of Brad Enzi, son of Mike, Senator from Wyoming. Enzi the younger has been overseeing the building of the Two Elk Power Plant in Wyoming for North American Power Group. …Senator Enzi pushed for Department of Energy funds to go towards clean coal research projects in his state and Brad Enzi’s company benefitted from them; it received nearly $10 million in funding to drill a well to study the site surrounding the plant, and Enzi himself earned $128,000 in compensation from the federal money. …Chaka Fattah Jr., son of Pennsylvania Congressman Chaka Fattah, has similarly felt the double-edged blade of intertwining family, business, and political ties. The management consulting company he founded was paid $450,000 by an education firm with lucrative contracts with the Philadelphia City School District—turns out Chaka’s father requested a $375,000 earmark for the firm from a 2009 transportation bill. Both father and son are currently under federal investigation.

Keep in mind, by the way, that these examples are just the tip of the iceberg.

For every bit of scandal and pork that gets publicized, you can be confident that there are hundreds of equally sordid deals that haven’t been exposed.

For all intents and purposes, big government in Washington has created a niche market for insiders who learn the specialized skill of transferring money from those who earned it to those with political pull.

And these insiders pass along this “skill” to their children.

…a hereditary specialized group of people who perform certain necessary social functions and because they have families, they’re going to gradually monopolize the functions they perform.” And in 2014, the place that’s increasingly being chosen as a place to call home by American “elites” happens to be Washington, D.C. The city’s greater metropolitan area boasts the largest number of “Super Zips”—those areas with the highest combined wealth and level of education—in the country.

They get the “super zips” while the rest of the country is treated as “super chumps.”

No wonder the Washington metropolitan area is now the richest part of the United States.

If that sounds like we’re becoming Argentina or some other cesspool of cronyism, then you understand the problem.

By the way, none of this should be interpreted to suggest that parents shouldn’t try to help their kids. Or even to give them some help joining the family business. That’s a normal part of life.

The problem exist when the “family business” is big government and income is obtained by facilitating the coercion and oppression of other people.

In a genuinely free market, by contrast, you get rich by serving other people.

P.S. Some people argue that the solution is to ban family members from lobbying or to otherwise impose restrictions on the political process. But until you deal with the underlying problem of Washington being a favor factory, all of these efforts will be akin to playing whack-a-mole.

This video explains.

P.P.S. On a totally separate issue, it appears that our right to keep and bear flamethrowers has been eroded in North Dakota.

Here are some excerpts from a Fargo news report.

Local resident Todd Fox has been detained for “reckless endangerment” and “illegal use of high-powered fire-breathing weaponry” for attacking snow with his flamethrower. …Fox stated that he was simply “fed up with battling the elements” and that he did not possess the willpower necessary to move “four billion tons of white bull [expletive deleted].” Police say that Fox surrendered his efforts immediately upon their arrival and that his front yard “looked like a hydrogen bomb had gone off.” They think he was just happy to be done with snow removal, even if it did mean a trip to jail.

I have two reactions to this story.

First, does Fargo really have a local ordinance governing the use of “high-powered fire-breathing weaponry”? I’m skeptical.

Second, isn’t this a great country? There probably aren’t many places in the world where citizens are allowed to own flamethrowers. Makes me proud to be American.

And we’re even allowed to own tanks and machine guns.

On the other hand, we do have a problem letting children possess pencils and pop tarts, so we obviously have some flaws to fix.

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The Bible says that “the wages of sin is death,” but the same can’t be said of Washington, DC.

The bureaucrats, lobbyists, politicians, contractors, insiders, cronyists, and influence peddlers have rigged the system so that they get rich by diverting money from people in the productive sector of the economy.

How bad is the disconnect between Washington and real America?

Well, according to Gallup’s Economic Confidence Index, people in every state have a negative outlook.

But there is one outpost of giddy prosperity, and that’s the District of Columbia, where residents have a 20-point gap compared to the most optimistic (or, to be more accurate, least pessimistic) state and a whopping 35-point gap with the average American.

Gallup Confidence DC

If you’re a glass-half-full person, there is a tiny sliver of good news in the new Gallup report.

It turns out that DC is not as fat and happy as it was one year ago, and the likely reason is that the federal Leviathan got put on a modest diet.

The District of Columbia (+19) is the clear outlier in economic confidence, having the only positive reading for 2013 and well above the readings for even the most optimistic states. Its confidence has taken a hit, however, since 2012, when its index was +29. Likely factors in the 10-point drop include October’s federal government shutdown as well as the sequestration spending cuts that occurred earlier in the year.

This explains, of course, why lobbyists were so bitterly opposed to the sequester. It reduced the money flow to Washington, and that meant less of our money to be shared by looter class that dominates the DC establishment.

Unfortunately, the establishment ultimately prevailed and they weakened the sequester as part of the Murray-Ryan tax-hike budget deal.

So don’t be surprised if Washington’s Economic Confidence Index is higher when new numbers are released next year.

And that means that we’ll be one step closer to being another Argentina, a nation on the decline because a corrupt elite uses the coercive power of government to obtain undeserved and unearned wealth.

And the most depressing sign that this already is happening to the United States is that so many of America’s richest communities are now part of the Washington metropolitan area.

P.S. I’m a big fan of Australia. Their private Social Security system is a huge success, and I’ve even suggested that it might be the best place to go if America suffers a Greek-style fiscal collapse.

But that doesn’t mean its government isn’t capable of squandering money in stupendous fashion. Check out this blurb from an Australian news report.

A refrigerator lightbulb retailing for about $3 at a hardware store ended up costing a far north Queensland state school almost $500 after Queensland’s Public Works Department sent an electrician to install it in a teacher’s government-owned home. Doomadgee State School, on the Gulf of Carpentaria, was billed $200 for labour alone after the teacher was told workplace health and safety regulations prevented any staff member from buying and replacing the bulb themselves

This sounds even crazier than some of the absurd examples of waste that I listed last month.

And since I’m in the uncharacteristic position of beating up on Australia, you may as well click here and here to see other examples of government stupidity Down Under.

Though, to be fair, at least the Aussies manage to involve sex when trying to bilk the workplace compensation system.

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In the famous “Bridge of Death” scene in Monty Python and the Holy Grail, some of the knights are asked to name their favorite color. One of them  mistakenly says blue instead of yellow and is hurled into the Gorge of Eternal Peril.

I can sympathize with the unfortunate chap. If asked my least favorite part of the tax code, I sometimes get confused because there are so many possible answers.

Do I most despise the high tax rates that undermine economic growth?

Am I more upset about the pervasive double taxation of income that is saved and invested?

Or do I get most agitated by a corrupt and punitive IRS?

How about the distorting loopholes for politically connected interest groups?

And the anxiety of taxpayers who can’t figure out how to comply with an ever-changing tax code?

Depending on my mood and time of day, any of these options might be at the top of my list.

But I also might say that I’m most upset about the way that the tax code facilitates a perverse form of legalized corruption in Washington. In this FBN interview, I explain how even small tax bills often are vehicles for lining the pockets of lobbyists and politicians.

To elaborate, some taxpayers may pay more when there’s new tax legislation and some may pay less. But this “winners” and “losers” game only applies outside the beltway.

The inside-the-beltway crowd always wins. Whether they’re lobbying for or against a provision, they get very big checks. Whether they’re voting yes or no on legislation, they’re getting showered with campaign contributions.

This chart, showing the growing number of pages in the tax code (by the way, we’re now up to 76,000 pages of tax law), also could be seen as a proxy for how the Washington establishment has gamed the system so that they always profit.

Or, to be more specific, it’s an example of how government has become a racket for the benefit of insiders. All of us pay more and endure less growth, but Washington’s gilded class lives fat and happy because there is always lots of money changing hands.

So how do we solve this problem?

The answer, at least for a period of time, in the flat tax. This video explains how this simple and fair system would operate.

But even though I’m a big advocate of tax reform, the flat tax is only a partial solution.

Simply stated, there’s no way to reduce Washington corruption until and unless you shrink the size and scope of the federal government.

That means somehow figuring out how to restore the Constitution’s limits on Washington. For much of our nation’s history, federal spending consumed only about 3 percent of our economic output.

And when the public sector was small and government generally focused only on core competencies, there wasn’t nearly as much opportunity for the graft and sleaze that characterize modern Washington.

P.S. The bad news is that all the projections show that the federal government will get far bigger in the future. So before we shrink the burden of government, we first need to come up with ways to keep it from growing.

P.P.S. The national sales tax is another intermediate option for reducing DC corruption, though that option requires repeal of the 16th Amendment so politicians don’t pull a bait-and-switch game and stick up with both an income tax and consumption tax.

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Last year, while writing about the sleazy and self-serving behavior at the IRS, I came up with a Theorem that explains day-to-day behavior in Washington.

It might not be as pithy as Mitchell’s Law, and it doesn’t contain an important policy prescription like Mitchell’s Golden Rule, but it could be the motto of the federal government.

Simply stated, government is a racket that benefits the DC political elite by taking money from average people in America

I realize this is an unhappy topic to be discussing during the Christmas season, but the American people need to realize that they are being raped and pillaged by the corrupt insiders that control Washington and live fat and easy lives at our expense.

If you don’t believe me, check out this map showing that 10 of the 15 richest counties in America are the ones surrounding our nation’s imperial capital.

Who would have guessed that the wages of sin are so high?

But even though the District of Columbia isn’t on the list, that doesn’t mean the people actually living in the capital are suffering.

Here are some interesting nuggets from a report in the Washington Business Journal.

D.C. residents are enjoying a personal income boom. The District’s total personal income in 2012 was $47.28 billion, or $74,733 for each of its 632,323 residents, according to the Office of the Chief Financial Officer’s Economic and Revenue Trends report for November. The U.S. average per capita personal income was $43,725.

Why is income so much higher? Well, the lobbyists, politicians, bureaucrats, interest groups, contractors, and other insiders who dominate DC get much higher wages than people elsewhere in the country.

And they get far higher fringe benefits.

In terms of pure wages, D.C., on a per capita basis, was 79 percent higher than the national average in 2012 — $36,974 to $20,656. …Employee benefits were 102 percent higher in D.C. than the U.S. average in 2012, $7,514 to $3,710. Proprietor’s income, 137 percent higher — $9,275 to $3,906. …The numbers suggest D.C. residents are living the high life.

Now let’s share a chart from Zero Hedge. It uses median household income rather than total personal income, so the numbers don’t match up, but what’s noteworthy is how DC income grew faster than the rest of the nation during the Bush years and then even more dramatically diverged from the rest of the country during the Obama years.

In other words, policies like TARP, the fake stimulus, and Obamacare have been very good for Washington’s ruling class.

Want some other concrete examples of profitable Washington sleaze? Well, here are some excerpts from Rich Tucker’s column for Real Clear Policy.

The real place to park your money is in Washington, D.C. That’s because the way to get ahead isn’t to work hard or make things; it’s to lobby Washington for special privileges. Look no further than the sweet deal the sugar industry gets. It’s spent about $50 million on federal campaign donations over the last five years. So that would average out to $10 million per year. Last year alone, the federal government spent $278 million on direct expenditures to sugar companies. That’s a great return on investment.

Big Corn may get an even better deal than Big Sugar.

Then there’s ethanol policy. Until 2012, the federal government provided generous tax credits to refiners that blended ethanol into gasoline. In 2011 alone, Washington spent $6 billion on this credit. The federal government also maintains tariffs (54 cents per gallon) to keep out foreign ethanol,and it mandates that tens of billions of gallons of ethanol be blended into the American gasoline supply. Nothing like a federal mandate to create demand for your product. How much would you pay for billions of dollars worth of largesse? Well, the ethanol industry got a steep discount. In 2012, opensecrets.org says, the American Coalition for Ethanol spent $212,216 on lobbying.

Rich warns that the United States is sliding in the wrong direction.

What makes Washington especially profitable is that its only products are the laws, rules, and regulations that it has the power to force everyone else to follow. …we seem to be sliding toward what the authors term “extractive” institutions. That means government using its power to benefit a handful of influential individuals at the expense of everyone else.

And let’s not forget that some people are getting very rich from Obamacare while the rest of us lose our insurance or pay higher prices.

This Reason TV interview with Andrew Ferguson explains that there is a huge shadow workforce of contractors, consultants, and lobbyists who have their snouts buried deeply in the public trough.

I particularly like his common sense explanation that Washington’s wealth comes at the expense of everyone else. The politicians seize our money at the point of a gun (or simply print more of it) to finance an opulent imperial city.

So if you’re having a hard time making ends meet, remember that you should blame the parasite class in Washington.

P.S. The insider corruption of Washington is a bipartisan problem. Indeed, some of the sleaziest people in DC are Republicans.

P.P.S. Though scandals such as Solyndra show that Obama certainly knows how to play the game.

P.P.P.S. Making government smaller is the only way to reduce the Washington problem of corrupt fat cats.

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Regular readers know I complain about the army of overpaid bureaucrats in Washington, but that’s just the tip of the iceberg.

The larger problem is that Washington also is filled with hundreds of thousands of other people who get rich thanks to big government. And these politicians, lobbyists, crony capitalists, interest groups, contractors, and influence peddlers almost surely are a bigger net drain on the economy’s productive sector.

When you combine the official bureaucracy with these other over-compensated beneficiaries of big government, it’s easy to understand why Washington, DC, is now the richest region of America, with 10 of the nation’s 15 richest counties.

Reuters did an expose last year on how Washington fat cats are living on Easy Street at our expense, and The Economist also has touched on the issue. But you know the problem has reached epidemic levels when even the local left-wing paper covers the story.

And that’s exactly what is happening. The Washington Post reports on how coerced access to other people’s money has meant boom times for the beltway elite. Here are some excerpts on how your money is creating unearned riches for DC insiders.

The avalanche of cash that made Washington rich in the last decade has transformed the culture of a once staid capital and created a new wave of well-heeled insiders.Wash Post Capital Wealth The winners in the new Washington are not just the former senators, party consiglieri and four-star generals who have always profited from their connections. Now they are also the former bureaucrats, accountants and staff officers for whom unimagined riches are suddenly possible. …They are the lawyers, lobbyists and executives who work for companies that barely had a presence in Washington before the boom.

Here are some depressing stats from the story.

During the past decade, the region added 21,000 households in the nation’s top 1 percent. No other metro area came close. …in 2010, companies based in Rep. James P. Moran’s congressional district in Northern Virginia reaped $43 billion in federal contracts — roughly as much as the state of Texas. At the same time, big companies realized that a few million spent shaping legislation could produce windfall profits. They nearly doubled the cash they poured into the capital. …Essentially, Washington has been the beneficiary of a ­decade-long, taxpayer-funded stimulus package.

Unfortunately, all this federal largesse is corrupting the business community, with many companies deciding that lobbying for tax dollars is more lucrative than competing for consumer dollars.

The federal government wasn’t the only one pouring buckets of new money into Washington in the 2000s. Big business did it, too. At a time when promising investments were hard to find, corporate America learned that lobbying was one of the most surefire ways of bolstering its bottom line. …Companies spent about $3.5 billion annually on lobbying at the end of the last decade, a nearly 90 percent increase from 1999 after adjusting for inflation… Legal services also boomed, fueled by the growing complexities of federal business regulations. The number of lawyers in the D.C. metro area increased by a third from 2000 to 2012, nearly twice as fast as the growth rate nationwide. And those lawyers have the highest mean salaries in the country, according to George Mason University’s Center for Regional Analysis.

Lobbying isn’t automatically a bad thing, by the way. Sometimes a company needs representation so that the political vultures in Washington don’t descend upon them.

“You know that if a company stopped lobbying, it would get creamed,” Drutman said. “That’s why companies don’t stop lobbying.”

The real moral of the story is that small government and genuinely free markets are the only effective ways to reduce sordid lobbying and political corruption.

The challenge, needless to say, is convincing the Washington establishment to adopt those policies. That’s not an easy task, particularly when it violates my First Theorem of Government.

P.S. Here’s a great video from Reason about Washington’s parasite economy.

P.P.S. Here’s an example of how Obamacare has lined the pockets of some DC insiders.

P.P.P.S. And here are some grating details about how the President is part of the problem.

P.P.P.P.S. You can enjoy some government corruption humor here, here, here, here, and (my personal creation) here.

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When I write about the importance of understanding the difference between a disease and its symptoms, I’m almost always seeking to help people understand why it’s important to focus on the problem of government spending rather than the side-effect of government borrowing.

But the same analogy is useful when looking at issues such as lobbying and campaign contributions.

It’s very understandable for people to get nauseated when we see things such as lobbying for corporate welfare or campaign contributions being given in exchange for things such as ethanol subsidies.

So would it make sense to outlaw lobbying or to restrict campaign contributions? Setting aside constitutional issues (the First Amendment protects our rights to petition the government and to engage in political speech), the answer is no.

Why? Because lobbying and campaign contributions are a function of government being too big and being involved in too many areas.

If we shrink the size and scope of the state, we reduce incentives to manipulate the system. But if we leave big government in place, laws to restrict lobbying and campaign contributions will simply lead to different forms of “rent seeking.”

Not surprisingly, leftists want the wrong approach. Here are some excerpts from Dana Milbank’s Washington Post column, which argues that campaign spending is the problem.

…the Supreme Court…has created a campaign-finance system that is directly responsible for the rise of uncompromising leaders on both sides of the Capitol. …Political money was again before the Supreme Court on Tuesday morning, and, judging from their questions, the conservative justices are poised to make things even worse. Milbank CorruptionNow they are prepared to expand on their 2010 decision that caused an explosion of independent spending by allowing the wealthy to give about $3.5 million apiece to candidates and parties in each election cycle. …The 1976 decision in Buckley v. Valeo made government for sale and created the arms race in campaign financing by equating unlimited spending with free speech. The John Roberts court in 2010 made the system dramatically worse in its Citizens United decision, loosening restrictions and spurring wealthy donors to make hundreds of millions of dollars in independent expenditures. …Justice Elena Kagan said those who give $3.5 million should expect “special treatment” from Congress — and Burchfield didn’t disagree. Under the Citizens United decision, he said, “gratitude and influence are not considered to be quid-pro-quo corruption.”

Milbank puts the cart before the horse. Big donors aren’t the problem. We should worry about big government.

If we had the type of limited central government envisioned by the Founding Fathers, there would be very little reason for billionaires (or the rest of us) to spend time or energy worrying about what happens in Washington.

I elaborate in this video on the real causes of political corruption in Washington.

P.S. In the title, I wrote that campaign contributions are a “possible” symptom. That’s because campaign contributions (like lobbying) don’t necessarily imply corruption. If John Doe gives money to someone like Rand Paul, he’s probably not looking for a government handout. But if the realtors cut a big check to someone like Chuck Schumer, it’s quite likely that they’re looking to obtain or preserve some undeserved goodie from Washington.

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Want to know why – as shown by this map – most of America’s richest counties are part of the metropolitan DC region?

Part of the answer is that federal bureaucrats are overpaid. Another part of the answer is that the Washington area is filled with consultants and contractors, and this shadow government workforce also is overcompensated by taxpayers.

But I’m guessing that DC’s vast population of lobbyists and influence peddlers dominate the upper end of the income spectrum.

And that community of back scratchers and deal makers are getting even richer thanks to Obamacare. Here’s some of what The Hill is reporting today.

ObamaCare has become big business for an elite network of Washington lobbyists and consultants who helped shape the law from the inside. More than 30 former administration officials, lawmakers and congressional staffers who worked on the healthcare law have set up shop on K Street since 2010. Major lobbying firms such as Fierce, Isakowitz & Blalock, The Glover Park Group, Alston & Bird, BGR Group and Akin Gump can all boast an ObamaCare insider on their lobbying roster — putting them in a prime position to land coveted clients. …The voracious need for lobbying help in dealing with ObamaCare has created a price premium for lobbyists who had first-hand experience in crafting or debating the law.  Experts say that those able to fetch the highest salaries have come from the Department of Health and Human Services (HHS) or committees with oversight power over healthcare.  Demand for ObamaCare insiders is even higher now that major pieces of the law — including the healthcare exchanges and individual insurance mandate — are being set up through a slew of complicated federal regulations.

You’ll also be happy to know that beltway insiders can expect years and years of undeserved loot thanks to rules, regulation, and red tape that will be unveiled for another seven years.

…the healthcare law has generated steady work — a trend that is likely to continue for years to come. That’s because ObamaCare runs on a long timeline, well into the next administration. Unless the law is severely crippled, the reform’s rules and requirements will be rolling out through at least 2020. That’s good news for lobbyists who want to sign up clients for the long haul.

This is the social science equivalent of a kick-in-the-you-know-what. A bunch of political hacks pass legislation that increases both the fiscal burden and the regulatory burden on the rest of us, but they make it very convoluted so that they can cash in and make big bucks navigating the law for deep-pocket clients.

This is a win-win for the political elite and a lose-lose for America’s productive sector.

And it’s a perfect example of what I was trying to get across in this video I narrated about the link between big government and corruption.

There are lots of specific examples of Obamacare’s corruption.

Michael Barone has exposed the sleaziness of the waiver process, Tim Carney revealed the special deals for politically connected companies, and I suggested the process was eerily similar to a passage from Atlas Shrugged.

But don’t forget Obamacare is just one example of the sleaze that defines Washington. Maybe the best way of understanding the game is to watch Andrew Ferguson explain DC’s parasite economy.

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I realize this might mean I’m not a very nice person, but I take joy in the sadness of others.

But in my defense, this only happens when the sad people happen to be those who want to steal my money using the coercive power of government. Crocodile TearsOr when bad things happen to the political class.

So you can imagine how happy I am that sleazy lobbyists for the agribusiness crowd are distraught about the rejection of the pork-filled farm bill in the House of Representatives.

Here are some of the details from The Hill, but have your crying towel ready.

K street agriculture lobbyists were stunned Thursday by the House defeat of a $940 billion farm bill and were scrambling to figure out their next move. The bill was widely expected to win approval… “We were shocked. We were watching the vote on TV and in the final minutes were saying ‘what are they doing? This thing isn’t going to pass!’ ” said one commodity group lobbyist. “I’m shocked,” said another lobbyist. “Our job as agriculture is to go to the House and say Mr. Speaker what is your plan for getting this done?” The intense blame game that broke out immediately after the bill was rejected in a 195-234 vote will only make it harder to get a bill over the hump, supporters of the measure said.

Gee, I can barely type with my vision clouded by tears.

In my fantasy world, of course, we abolish the Ag Department, which would enable me to be even happier about the sadness of others.

P.S. I have another reason to be happy. With only a few more days before I reach the advanced age of 55, I managed to hit a ball out of the park at a softball tournament in Salem, Virginia. Courtesy of Google Maps, here’s a reenactment of the glorious event.

Salem Tournament

I did hit one out at a tournament in Virginia Beach last year, but my happiness was undermined when Georgia lost later in the day to South Carolina. Hopefully nothing bad will happen today to offset the illusion that I’m still a young buck.

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I believe in the First Amendment, so I would never support legislation to restrict political speech or curtail the ability of people to petition the government.

That being said, I despise the corrupt Washington game of obtaining unearned wealth thanks to the sleazy interaction of lobbyists, politicians, bureaucrats, and interest groups.

So you can imagine my unfettered joy when reading about how this odious process is being curtailed by sequestration. Here are some cheerful details from story in Roll Call.

…sequester cuts…reflect not only Washington’s political paralysis but a bitter lobbying failure for K Street interests across the board. From university professors and scientists to cancer victims, defense contractors and federal workers, hundreds of advocacy, trade and labor groups have lobbied aggressively for months to head off the cuts. They’ve run ads, testified on Capitol Hill, staged demonstrations and hounded lawmakers, all to no avail. …the path forward could be a lobbying nightmare.

Reading the story, I recalled a Charles Addams cartoon from my childhood. Thanks to the magic of Al Gore’s Internet, I found it.

Slightly modified to capture my spirit of elation, here it is for you to enjoy.

Charles Addams Cartoon

Except I like to think I’m a bit more prepossessing than the Uncle Fester character, but let’s not get hung up on details.

What matters is that sequestration was a much-needed and very welcome victory for taxpayers. Obama suffered a rare defeat, as did the cronyists who get rich by working the system.

To be sure, all that we’ve achieved is a tiny reduction in the growth of federal spending (the budget will be $2.4 trillion bigger in 10 years rather than $2.5 trillion bigger). But a journey of many trillions of dollars begins with a first step.

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In large part because of an excessive burden of government, the American economy is suffering European-style stagnation, with even the Washington Post now confessing that growth far below the long-run trend.

This helps explain why job creation has been so dismal in recent years, with more than twenty million Americans out of work, underemployed, or dropped out of the workforce.

But there is one pocket of enormous prosperity in America. It will warm your heart to know that our overlords in Washington are living the life of Riley.

Here are some of the highlights of a remarkable Reuters expose about the fat cats of big government, starting with the huge gap between the insider elite and the poor.

In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government’s help. And the rich are getting richer because of it. The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 – a ratio of 54 to 1. That gap is up from 39 to 1 two decades ago. It’s wider than in any of the 50 states and all but two major cities.

One small but important correction in the previous excerpt. As I have noted many times, the “poor are getting poorer” because of “the government’s help.”

The article then explains that a lot of the redistribution in Washington is from taxpayers to a pampered elite.

…in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too – especially in the nation’s capital. …Two decades of record federal spending and expanding regulation have fostered a growing upper class of federal contractors, lobbyists and lawyers in the District of Columbia area. …Direct spending by the federal government accounts for 40 percent of the area’s $425 billion-a-year economy. …Roughly 15 cents of every dollar from the entire federal procurement budget stays in or around the government’s hometown, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. Last year, that was about $80 billion out of $536 billion in procurement spending, he said. The 15 percent share is far greater than the region’s 2 percent portion of the U.S. population. “We’re seeing an enormous transfer of wealth from taxpayers to the Washington economy,” said Fuller.

And all this spending leads to an elitist class of cronyists, politicians, contractors, bureaucrats, and lobbyists. No wonder the DC area is home to some of the richest counties in America.

But unlike other well-to-do areas, the wealth in DC is rarely accumulated by honest means.

Instead, it’s the result of perverse form of redistribution to big-government insiders. Check out these horrifying details.

Washington-area workers with incomes above $100,000 rose to 22 percent of the workforce, up from 14 percent in 1990, adjusted for inflation, a Reuters analysis of Census data found. …there are 320,000 federal jobs in the Washington area. Within the District of Columbia, 55 percent pay $100,000 or more. …Nearly 13,000 lobbyists registered with the government last year and reported $3.3 billion in fees, or about $260,000 per lobbyist. That’s 22 percent more lobbyists and 37 percent more inflation-adjusted revenue per lobbyist than in 1998… Times are flush for Washington lawyers as well. The number of attorneys in the area has risen 44 percent, twice the national rate, to 41,000 since 1999. Their average income, adjusted for inflation, rose 35 percent to $156,000.

I guess we know who’s having a merry Christmas.

All these rich bureaucrats, lobbyists, politicians, cronyists, and contractors certainly are living the good life, as revealed in a Washington Post story on the “Region’s Rising Wealth.” Here are some sordid excerpts.

…the D.C. region already has a reputation as one of the most affluent in the country. But the area is fast emerging as a home to the truly rich as well. High-end luxury retailers are responding. Brands such as Aston Martin are expanding their operations into the area — betting, for instance, that there will be plenty of customers who can afford the $280,000 sports car James Bond drives in the movies. …Already there are 500 Aston Martin owners in the area with the potential for more.

I’ve already shared an interview with Andrew Ferguson by Reason TV that should make all taxpayers upset. Why should ordinary taxpayers be coerced to subsidize Washington’s high-flying parasite economy?

Redistribution is a bad thing in most circumstances. But when you redistribute from poor to rich, that’s utterly perverse.

Well, thanks to profligacy by Bush and Obama, that’s exactly what’s happened.

The region’s top one percent of households make more than a half million dollars yearly — far more than the national average for the one percent, according to a study of Census data by Sentier Research, an Annapolis-based data analysis firm. And these top earners — many of whom are from dual-income households and benefit from federal contracting — weathered the recession better than their counterparts in some other metropolitan areas and the nation. More are moving beyond comfortable affluence to a much higher standard of living. “What is unique to D.C. is that there has been a change in the complexion of wealth here. There didn’t used to be much of this ultra-high-net-worth business here and now there is,” said Susan Traver, the regional president of BNY Mellon Wealth Management.

But everyone in the rest of America at least can go to sleep tonight with a warm and fuzzy feeling of joy, knowing that our money has created such comfortable lives for the political elite.

Milton Pedraza, the CEO of the Luxury Institute, a research and consulting firm, said that purveyors of luxury goods are drawn to the area because it has…a stable economy bolstered by the federal government. Government contracting, where some local entrepreneurs and business owners amassed their fortunes, has been a key driver of the region’s economy for three decades. A third of the region’s gross regional product still comes from federal spending… “Let’s face it . . . the only place with money during the recession was Washington, D.C.,” Pedraza said.

Perhaps we should make a slight correction in the previous excerpt. After all, shouldn’t it read “America suffered a recession because the only place with money was Washington, DC.”

Let’s wrap this up. A few years ago, I issued this video about overpaid bureaucrats.

But I now realize my mini-documentary only scratches the  surface. Yes, there are too many paper-pushers on the government payroll, and of course they get far too much compensation.

But what about unofficial government workforce of over-paid contractors? And all the lobbyists, consultants, and cronyists that exist only because we have a bloated federal government?

Our nation is being seriously damaged by this corrupt system, and I fear that the outcome will be Argentinian-style decline.

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I’ve written before about how big government is enriching people in the Washington metropolitan area. This is for two reasons.

First, bureaucrats are paid too much, getting twice as much compensation, on average, as people in the productive sector of the economy.

Second, lobbyists, contractors, and interest groups have figured out how to get lucrative positions at the federal trough.

A new report from MSN Money illustrates how the political elite is getting very rich by plundering honest Americans. America has 3,033 counties, and they identified the 15 richest jurisdictions from that list.

Of those 15 super-elite counties (the top 1/2 of one percent), 10 are in the Washington metropolitan area. I’ve identified them with stars in the map.

You may be wondering, by the way, about the location of the other counties in the top 15. Well, four of them are suburbs of New York City, meaning that they are home to rich Wall Street people who mooched from the taxpayers thanks to TARP bailouts and other subsidies.

So if you really want to be cynical, you could count them as auxiliary counties of Washington, DC. That’s probably an unfair conclusion, but TARP was unfair to honest and hard-working people, so I don’t feel too guilty.

As far as I can tell, the only untarnished jurisdiction in the top 15 is Douglas County, Colorado. And given that these are the folks who are implementing a good school choice plan, it seems that we have a group of productive people who also believe in doing the right thing.

For more information about the overcompensation of bureaucrats, this video is loaded with information.

Most important of all, remember that any proposals to increase government spending will further widen the income gulf between the political elite and regular Americans. And any initiative to boost the tax burden would lead to the same result.

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I haven’t paid too much attention to the Solyndra scandal, except to note that waste, corruption and job losses are the inevitable consequences of big government and crony capitalism.

But if you want a withering indictment of the sleaziness of the whole enterprise, a trip to Chicago is very illuminating.

Here’s some of what John Kass of the Chicago Tribune wrote about the “Chicago smell” of this issue.

The Solyndra scandal cost at least a half-billion public dollars. It is plaguing PresidentBarack Obama. And it’s being billed as a Washington story. But back in Obama’s political hometown, those of us familiar with the Chicago Way can see something else in Solyndra — something that the Washington crowd calls “optics.” In fact, it’s not just a Washington saga — it has all the elements of a Chicago City Hall story, except with more zeros. …did you really believe it when the White House mouthpieces — who are also Chicago City Hall mouthpieces — promised they were bringing a new kind of politics to Washington? This is not a new kind of politics. It’s the old kind. The Chicago kind. And now the Tribune Washington Bureau has reported that the U.S. Department of Energyemployee who helped monitor the Solyndra loan guarantee was one of Obama’s top fundraisers. Fundraising? Contracts? Imagine that. …it’s the same old politics, the same kind practiced in Washington and Chicago and anywhere else where appetites are satisfied by politicians. When the government picks winners and losers, who’s the loser? Just look in the mirror, hold that thought, and tell me later.

Kass does a great job of describing how these legal forms of corruption take place.

In Solyndra, like any proper City Hall political scandal, there are similar archetypes. There are the guys who count. The guys who bring the cash. They count because they do the counting. They have leverage. They’re always there at the fundraisers. And so they’re the ones who are allowed to gorge at the public trough. The bureaucrats are the fulcrum so the guys with the leverage can lift great weight without too much effort. And while they might whine privately among themselves, they don’t hold news conferences to blow the whistle. They keep their mouths shut until the deal is done. If anyone gets caught and the problem becomes public, at least they’ve got email to cover their behinds. And they’re doing a good job covering. But there’s one group that doesn’t get their behinds covered. Instead, their behinds are right out there, suspended foolishly, and waiting to get kicked. We’re the taxpayers — in Illinois we call ourselves chumbolones because we’re the ones who stupidly end up covering all the losses. As in the Solyndra mess.

His last point is most important. Taxpayers always wind up with the short end of the stick. Meanwhile, all the politicians, bureaucrats, lobbyists, and interest groups simply shrug their shoulders and move on to the next scam.

That’s why the only solution to this sleaze is smaller government.

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If you want to know why Washington is a cesspool of corruption and graft, you should read this story from the Washington Post about how Capitol Hill staffers use their positions as stepping stones to jobs in the lobbying community.

Nearly 5,400 former congressional staffers have left Capitol Hill to become federal lobbyists in the past 10 years, according to a new study that documents the extent of the revolving door between Congress and K Street. The data published by the online disclosure site LegiStorm found close to 400 former U.S. lawmakers also have made the jump to lobbying. The report…underscores the symbiotic relationship: Thousands of lobbyists are able to exploit experience and connections gleaned from working inside the legislative process, and lawmakers find in lobbyists a ready pool of experienced talent. …The study also documents the reverse movement, finding 605 former lobbyists who have taken jobs working for lawmakers in the past decade. …About 14,000 people work on the Hill, and about 11,700 people are registered to lobby this year, according to the Center for Responsive Politics.

If this sounds like sleaze, that’s because it is. It’s a story about how the political class has created a system that loots the American public and enables the well-connected to skim a good share of the booty.

I explained in a previous post that some of the most despicable people in Washington are Republicans, but this story gives me an opportunity to elaborate.

What happens is that idealistic people come to Washington to work for Congress (also, because they get elected to Congress). They earn good salaries, considerably above the average for the U.S. economy.

But if they want to make big money – and if they have weak morals and an absence of character, they are drawn to the lobbying community.

I have known dozens of good people over the years who have been corrupted by this process. They came to Washington to do good, and they wound up doing well instead.

They began their careers thinking Washington is a cesspool, and they eventually decided it’s a hot tub.

The only solution to this problem is to shrink the size and scope of government, as I explain in this video.

And if we shrink the burden of government, we can return to the good ol’ days when each member of Congress could do their job with 2 or 3 staffers rather than 20 or 30.

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I don’t have strong feelings about Sarah Palin, but I like her anti-establishment attitude.

And, in a case of strange bedfellows, so does the New York Times. Or at least one columnist is honest enough to admit when she makes a compelling argument.

Here’s an excerpt from a column published yesterday, in which the author reports on how Gov. Palin perfectly captures the reprehensible corruption that defines business-as-usual in Washington.

Along with her familiar and predictable swipes at President Barack Obama and the “far left,” she delivered a devastating indictment of the entire U.S. political establishment — left, right and center — and pointed toward a way of transcending the presently unbridgeable political divide.  …She made three interlocking points. First, that the United States is now governed by a “permanent political class,” drawn from both parties, that is increasingly cut off from the concerns of regular people. Second, that these Republicans and Democrats have allied with big business to mutual advantage to create what she called “corporate crony capitalism.” Third, that the real political divide in the United States may no longer be between friends and foes of Big Government, but between friends and foes of vast, remote, unaccountable institutions (both public and private). In supporting her first point, about the permanent political class, she attacked both parties’ tendency to talk of spending cuts while spending more and more; to stoke public anxiety about a credit downgrade, but take a vacation anyway; to arrive in Washington of modest means and then somehow ride the gravy train to fabulous wealth. She observed that 7 of the 10 wealthiest counties in the United States happen to be suburbs of the nation’s capital. …Ms. Palin’s third point was more striking still: in contrast to the sweeping paeans to capitalism and the free market delivered by the Republican presidential candidates whose ranks she has yet to join, she sought to make a distinction between good capitalists and bad ones. The good ones, in her telling, are those small businesses that take risks and sink and swim in the churning market; the bad ones are well-connected megacorporations that live off bailouts, dodge taxes and profit terrifically while creating no jobs. …“This is not the capitalism of free men and free markets, of innovation and hard work and ethics, of sacrifice and of risk,” she said of the crony variety. She added: “It’s the collusion of big government and big business and big finance to the detriment of all the rest — to the little guys. It’s a slap in the face to our small business owners — the true entrepreneurs, the job creators accounting for 70 percent of the jobs in America.”

Think about the recent controversy about Solyndra, the “green” company that got lots of handouts from the Obama Administration and recently filed for bankruptcy (and got raided by the FBI).

Not that anyone should be surprised, but the money people at the company were big financial backers of Obama.

Let’s be blunt about what happened. They bribed the White House (not in a way that violates the law, we must assume, but does anybody doubt that’s what was happening?). In exchange, the Obama Administration used the coercive power of government to steer undeserved money to the corrupt company.

And we’re not talking about a couple of million dollars. We’re talking about more than one-half of one billion dollars. That’s $535,000,000.00.

And this is presumably just one example of what probably happens dozens of times every day in Washington.

But let me make one thing clear. I don’t think the Obama Administration is an outlier. The same thing happened every day, in all likelihood, during the Bush Administration. And in previous administrations.

Heck, this is almost certainly what happens in state capitals and city governments, and I doubt that it makes much difference what party is in charge.

Indeed, Republicans are probably even worse than Democrats.

The only way to control the festering sleaze is to make government smaller, as I explain in this video.

As I’ve explained before, I hate when rich people use big government to screw poor people.

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In a column about the revolving door between big government and the lobbying world, here’s what the irreplaceable Tim Carney wrote about the waiver process for folks trying to escape the burden of government-run healthcare.

Congress imposes mandates on other entities, but gives bureaucrats the power to waive those mandates. To get such a waiver, you hire the people who used to administer or who helped craft the policies. So who’s the net winner? The politicians and bureaucrats who craft policies and wield power, because this combination of massive government power and wide bureaucratic discretion creates huge demand for revolving-door lobbyists. It’s another reason Obama’s legislative agenda, including bailouts, stimulus, ObamaCare, Dodd-Frank, tobacco regulation, and more, necessarily fosters more corruption and cronyism.

This seemed so familiar that I wondered whether Tim was guilty of plagiarism. But he’s one of the best journalists in DC, so I knew that couldn’t be the case.

Then I realized that there was plagiarism, but the politicians in Washington were the guilty parties. As can be seen in this passage from Atlas Shrugged, the Obama Administration is copying from what Ayn Rand wrote – as dystopian parody – in the 1950s.

Nobody professed to understand the question of the frozen railroad bonds, perhaps, because everybody understood it too well. At first, there had been signs of a panic among the bondholders and of a dangerous indignation among the public. Then, Wesley Mouch had issued another directive, which ruled that people could get their bonds “defrozen” upon a plea of “essential need”: the government would purchase the bonds, if it found proof of the need satisfactory. there were three questions that no one answered or asked: “What constituted proof?” “What constituted need?” “Essential-to whom?” …One was not supposed to speak about the men who, having been refused, sold their bonds for one-third of the value to other men who possessed needs which, miraculously, made thirty-three frozen cents melt into a whole dollar, or about a new profession practiced by bright young boys just out of college, who called themselves “defreezers” and offered their services “to help you draft your application in the proper modern terms.” The boys had friends in Washington.

This isn’t the first time the Obama Administration has inadvertently brought Atlas Shrugged to life. The Administration’s top lawyer already semi-endorsed “going Galt” when he said people could choose to earn less money to avoid certain Obamacare impositions.

So if you want a glimpse at America’s future, I encourage you to read (or re-read) the book. Or at least watch the movie.

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Here’s a stomach-turning story from the Chicago Sun Times about how the political class uses special insider deals to get rich (or richer). What’s remarkable is that there may be nothing technically illegal in this story of crony capitalism and government contracts. But does anyone doubt that being the Mayor’s son was not a relevant (if not the key) consideration?

For years, City Hall maintained that Mayor Richard M. Daley’s son, Patrick Daley, had no financial stake in the deal that brought wireless Internet service to city-owned O’Hare Airport and Midway Airport. But it turns out that the younger Daley still reaped a windfall of $708,999 when Concourse Communications was sold in 2006, less than a year after the Chicago company signed the multimillion-dollar Wi-Fi contract with his father’s administration, company documents obtained by the Chicago Sun-Times show. …Exactly how the deal was structured isn’t clear. Neither Patrick Daley nor his father replied to interview requests. But the amount that Patrick Daley was paid was linked to the sale price of the company, a source with knowledge of the arrangement said: The more the company was sold for, the more Patrick Daley would be paid. The elder Daley — who left office May 16 after deciding not to seek re-election — is now in business with his son. The two Daleys are working out of offices on Michigan Avenue on international business deals. Patrick Daley’s Wi-Fi windfall was part of $1.2 million he was paid as a result of deals he had with Cardinal Growth, a Chicago venture-capital firm that invested in Concourse and other businesses. Among those businesses was a sewer-inspection company that got millions of dollars in no-bid city-contract extensions. In addition to Patrick Daley, Cardinal Growth also has had business dealings in which it made payments to two of his cousins, Robert G. Vanecko and Richard J. “R.J.” Vanecko. …In addition to the $708,999 from those payments linked to the Concourse sale, Cardinal Growth made numerous other payments to Patrick Daley, totaling $543,127, between July 10, 2002, and Oct. 31, 2009, company records show. It isn’t clear what those payments were for.

Chicago has a reputation for this kind of corruption, and I suppose I could make a snarky comment about Obama learning how to be a politician in that environment, but I have little doubt that there are untold versions of this story in every part of government, at all levels of government.

The moral of the story is that big government is the mother’s milk of cronyism, sleaze, unearned wealth, and other forms of corruption. I posted my video on this topic just a few weeks ago, but this is a perfect opportunity to include it again for those who didn’t see it.

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General Electric has received a lot of unwelcome attention for paying zero federal income tax in 2010, even though it reported $5.1 billion in U.S. profits. This is a good news-bad news situation.

The good news is that GE’s clever tax planning deprived the government of revenue. And I’m in favor of just about anything that reduces the amount of money that winds up in the hands of the most corrupt and least competent people in America (a.k.a., the political class in Washington).

The bad news, though, is that politicians can engage in borrow-and-spend vote-buying behavior, so depriving them of revenue doesn’t seem to have much impact on the overall burden of government spending.

Moreover, there are good ways to cut taxes and not-so-good ways to cut taxes. Special loopholes for politically powerful companies and well-connected insiders are unfair, corrupt, and inefficient.And I’ve already written about GE’s distasteful track record of getting in bed with politicians in exchange for grubby favors.

Ideally, we should junk the corrupt internal revenue code (and the corporate side of the tax code makes the personal tax code seem simple by comparison) and replace it with a simple and transparent system such as the flat tax.

That way, all income would be taxed since loopholes would be abolished, but there would be a very low tax rate and no double taxation.

Tim Carney of the Washington Examiner is one of the best economic and policy journalists on the scene today, and this excerpt from his column explains what is right and wrong about GE’s tax bill.

GE allocates hundreds of talented minds to attempts at lowering taxes. I don’t blame GE for that. It’s probably worth it — which is exactly the problem. In a world with a simpler tax code — or better yet, with no corporate income tax — GE would spend those resources creating something of value. Again, this is a case where government creates a chasm between what’s profitable (gaming tax law) and what’s valuable for society. Also, this story demonstrates once again how Big Government hurts small business much more than it affects Big Business, which can afford to figure out a way around taxes.

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I sometimes assert that the greatest enemies of freedom in Washington are mortgage payments and tuition bills. When people give me a blank stare, I say that I’m joking, but I use the opportunity to explain that the desire for easy wealth (and the lifestyle it enables) lures many Republicans to become lobbyists and to promote policies that they almost surely understand are bad for America.

These GOPers, who do the wrong thing to line their own pockets, are the worst people in Washington. They presumably first got involved in policy because they recognized government is a cesspool, but eventually got corrupted and decide it is a hot tub. To put it mildly, this gets me very agitated. For instance:

I have slammed a former Reagan Administration official for defending earmarks. I think it is morally offensive that he gets rich by facilitating the transfer of money from taxpayers to powerful interest groups.

I have condemned the former Senate Republican leader for defending Obamacare. I think it is disgusting that he puts his lobbying income ahead of America’s best interests.

I have denounced Illinois Republican legislators for killing school choice. I think it is downright nauseating that they condemn inner-city children to terrible schools in exchange for campaign contributions from teacher unions.

So you won’t be surprised to know that I am on the verge of going postal after reading a report from The Hill about all the Republican lobbyists who are getting lucrative contracts to fight against the Tea Party agenda and lobby on behalf of big government. Here are the utterly nauseating details.

A stable of former GOP aides has been hired by public television stations, children’s hospitals and other interest groups that fear they’ll be targeted for spending cuts by the Republican House. Most of the aides left Congress years ago, but many still have close ties to senior Republicans on Capitol Hill, including Speaker John Boehner (Ohio). They’ve been hired to try to convince the new GOP Congress that some public spending is worth continuing and not reducing. An advocacy group for the Association of Public Television Stations, for example, has hired GOP lobbyists John Feehery and Marc Lampkin of Quinn Gillespie & Associates to fight off budget cuts. …A review of lobbying disclosure records by The Hill shows the public television stations are hardly alone in recruiting GOP muscle. A number of associations hoping to retain federal funding have recently added GOP lobbyists with connections to the new majority. The hiring binge indicates Republican lobbyists are earning dividends from their party’s re-taking of the House in November and points to the headaches in store for a Republican House that wants to take a hatchet to public spending. Targets of GOP budget cuts say they need all the help they can get from the coming GOP-led onslaught. “Everyone is going to make their case for government support for their projects,” said one GOP lobbyist. …The California High-Speed Rail Authority has hired Ogilvy Government Relations’ Drew Maloney, a former aide to DeLay, to work on retaining federal grants for high-speed rail. …Williams & Jensen has registered to lobby for AARP to work on senior-citizen issues and President Obama’s deficit commission report. Prominent Republican lobbyist Steve Hart is among those working for the group, which wants to make sure the new healthcare law is not repealed. …The National Association of Children’s Hospitals (NACH) has hired former Rep. Deborah Pryce (R-Ohio) of Clark Lytle & Geduldig to lobby for the reauthorization of the Children’s Hospitals Graduate Medical Education program, which uses $317.5 million in federal funding a year.

Some of my Republican friends sometimes respond by asserting that Democrats are worse, but I grade on a curve. Democrats seek to make government bigger because they believe in statism. So it’s not terribly surprising or philosophically inconsistent for them to become lobbyists and get rich pushing to expand the burden of government (though some Democrats lobby for things that are not completely consistent with a left-wig agenda, such as special tax breaks or defense contracts, so it’s not a black-and-white divide).

Republicans, however, tell voters that they believe in small government and individual liberty. So when GOP politicians and staffers decide to get rich by lobbying for bigger government, that is more disgusting.

Doing the wrong thing is bad. But doing the wrong they when you know it is wrong is even worse.

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The internal revenue code is nightmarishly complex, as illustrated by this video. Americans spend more than 7 billion hours each year in a hopeless effort to figure out how to deal with more than 7 million words of tax law and regulation.

Why does this mess exist? The simple answer is that politicians benefit from the current mess, using their power over tax laws to raise campaign cash, reward friends, punish enemies, and play politics. This argument certainly has merit, and it definitely helps explain why the political class is so hostile to a simple and fair flat tax.

But a big part of the problem is that tax lawyers dominate the tax-lawmaking process. Almost all the decision-making professionals at the tax-writing committees (Ways & Means Committee in the House and Finance Committee in the Senate) are lawyers, as are the vast majority of tax policy people at the Treasury Department and the Internal Revenue Service.

This has always rubbed me the wrong way. Yes, some lawyers are needed if for no other reason than to figure out how new loopholes, deductions, credits, and other provisions can be integrated into Rube-Goldberg monstrosity of existing law.

But part of me has always wondered whether lawyers deliberately or subconsciously make the system complex because it serves their interests. I know many tax lawyers who are now getting rich in private practice by helping their clients navigate the complicated laws and regulations that they helped implement. For these people, the time they spent on Capitol Hill, in the Treasury, or at the IRS was an investment that enables today’s lucrative fees.

I freely admit that this is a sour perspective on how Washington operates, but it certainly is consistent with the “public choice” theory that people in government behave in ways that maximize their self interest.

There’s now an interesting book that takes a broader look at this issue, analyzing the extent to which the legal profession looks out for its own self interest. Written by Benjamin H. Barton, a law professor at the University of Tennessee, The Lawyer-Judge Bias in the American Legal System explains that the legal profession has self-serving tendencies.

Glenn Reynolds, of Instapundit fame, interviews Professor Barton about his new book.

I freely confess that I’m looking at this issue solely through my narrow prism of tax policy. But since Barton’s thesis meshes with my observations that tax lawyers benefit from a corrupt tax system, I’m sympathetic to the notion that the problem is much broader.

One of the most quoted lines from Shakespeare’s Henry VI is, “let’s kill all the lawyers.” But rather than making lawyer jokes, it would be a better idea to figure out how to limit the negative impact of self-serving behavior – whether by lawyers or any other profession that might misuse the coercive power of government.

This is one of many reasons why decentralization is a good idea. If people and businesses have the freedom to choose the legal system with the best features, that restrains the ability of an interest group – including lawyers – to manipulate any one system for their private advantage. This new study by Professors Henry Butler and Larry Ribstein is a good explanation of why allowing “choice of law” yields superior results.

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I have a piece in this morning’s New York Post, and I did not try to be polite. Commenting on the end-of-year orgy on Capitol Hill, I slam corrupt deal making that leads to ever-bigger government. Here’s part of what I say about the “omnibus” spending bill.

The weeks since Election Day have provided nauseating confirmation of Mark Twain’s observation: “There is no distinctly native American criminal class except Congress.” Exhibit A is the “omnibus” spending bill Harry Reid is trying to push through the Senate. This monstrosity contains about 6,500 earmarks — special provisions inserted on behalf of lobbyists to benefit special interests. The lobbyists get big fees, the interest groups get handouts and the politicians get rewarded with contributions from both. It’s a win-win-win for everyone — except the taxpayers who finance this carousel of corruption. …earmarks and pork-barrel spending are the gateway drug that turns good legislators into big spenders.

And here’s some of my commentary on the tax deal.

Regardless of what you think of its core elements, it’s also packed with provisions — known as “extenders” — that reek of corruption and special-interest deal making. Extenders are the tax version of pork-barrel spending: special tax breaks put in the law by powerful politicians in exchange for campaign cash and other support. …There are strong policy arguments against these kinds of special tax breaks, especially since we could use the revenue to finance lower tax rates — but most people are even more upset by the dead-of-night process used to put these goodies into the tax bill. The behavior on Capitol Hill reminds me of the movie classic, “Animal House”: After their fraternity has been placed on “double-secret probation,” John Belushi and the rest of guys at the Delta House decide to go out in a blaze of glory with a toga party. Likewise, the politicians on Capitol Hill just got placed on the equivalent of probation by a Tea Party uprising. Yet rather than mend their crooked ways, they’re throwing a massive party with our money.

But after further thought, I feel compelled to apologize to the guys at Animal House. To paraphrase Ronald Reagan, at least they were partying with their own money.

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Tim Carney of the Washington Examiner has a great piece looking at the utterly indefensible panoply of ethanol subsidies and handouts that screw consumers and taxpayers in order to line the pockets of the politically powerful. Unfortunately, several senior GOP lawmakers have unseemly ties to the lobbyists for the industry. So this is a test, but don’t expect a passing grade.

Ethanol fuel (especially ethanol distilled from corn) is subsidized in dozens of ways by governments at all levels. Two of the longest-running subsidies — a 54-cent-per-gallon tariff on imported ethanol, and 45-cent tax credit for every gallon blended with gasoline — expire on Dec. 31, making them a top priority for industry lobbyists during the lame-duck session. …In recent years, Americans have learned about the downsides of ethanol subsidies. The 2005 and 2007 energy bills mandated the use of ethanol, igniting a corn boom, which crowded out other crops, contributing to spikes in food prices. Ethanol was even blamed for tortilla riots in Mexico. Growing and distilling ethanol uses immense amounts water (contributing to river and aquifer depletion) and energy (some scientists argue that more energy goes into making a gallon of ethanol than is contained in that gallon). The added corn demand means more fertilizer production and use, adding to harmful runoff, which is blamed for “dead zones” in the Gulf of Mexico that choke out aquatic life. There are plenty of policy reasons to kill ethanol subsidies, but historically, a powerful lobby has kept them alive. And while the GOP talks about free markets, Republican lawmakers are cozier with the ethanol lobby than Democrats are. Republicans raised more than Democrats from Poet, the nation’s largest ethanol maker. Former Republican Rep. Jim Nussle of Iowa is now the president of Growth Energy, a leading pro-ethanol lobby. Presumptive incoming House Ways & Means Chairman Dave Camp has long supported ethanol subsidies, as has Finance Committee ranking member Chuck Grassley. Republican coziness with corn growers and ethanol distillers could outweigh sound policy considerations.

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The “appearance of impropriety” is often considered the Washington standard for corruption and misbehavior. With that in mind, alarm bells began ringing in my head when I read this Washington Times report about Jacob Lew, Obama’s nominee to head the Office of Management and Budget. Why did Citigroup decide to hire a career DC political operator for $1.1 million? As a former political aide, lobbyist, lawyer, and political appointee, what particular talents did he have to justify that salary to manage an investment division? Did the presence of Lew (as well as other Washington insiders such as Robert Rubin) help Citigroup get a big bucket of money from taxpayers as part of the TARP bailout? Did Lew’s big $900K in 2009 have anything to do with the money the bank got from taxpayers? Is it a bit suspicious that he received his big windfall bonus four days after filing a financial disclosure? Read this blurb from the Washington Times and see if you can draw any conclusion other than this was a typical example of the sleazy relationship of big government and big business.

President Obama’s choice to be the government’s chief budget officer received a bonus of more than $900,000 from Citigroup Inc. last year — after the Wall Street firm for which he worked received a massive taxpayer bailout. The money was paid to Jacob Lew in January 2009, about two weeks before he joined the State Department as deputy secretary of state, according to a newly filed ethics form. The payout came on top of the already hefty $1.1 million Citigroup compensation package for 2008 that he reported last year. Administration officials and members of Congress last year expressed outrage that executives at other bailed-out firms, such as American International Group Inc., awarded bonuses to top executives. State Department officials at the time steadfastly refused to say if Mr. Lew received a post-bailout bonus from Citigroup in response to inquiries from The Washington Times. But Mr. Lew’s latest financial disclosure report, provided by the State Department on Wednesday, makes clear that he did receive a significant windfall. …The records show that Mr. Lew received the $944,578 payment four days after he filed his 2008 ethics disclosure.

Lest anyone think I’m being partisan, let’s now look at another story featuring Senator Richard Shelby. The Alabama Republican and his former aides have a nice incestuous relationship that means more campaign cash for him, lucrative fees for them, and lots of our tax dollars being diverted to moochers such as the state’s university system. Here are some of the sordid details.

Since 2008, Alabama Sen. Richard Shelby has steered more than $250 million in earmarks to beneficiaries whose lobbyists used to work in his Senate office — including millions for Alabama universities represented by a former top staffer. In a mix of revolving-door and campaign finance politics, the same organizations that have enjoyed Shelby’s earmarks have seen their lobbyists and employees contribute nearly $1 million to Shelby’s campaign and political action committee since 1999, according to federal records. …Shelby’s earmarking doesn’t appear to run afoul of Senate rules or federal ethics laws. But critics said his tactics are part of a Washington culture in which lawmakers direct money back home to narrow interests, which, in turn, hire well-connected lobbyists — often former congressional aides — who enjoy special access on Capitol Hill.

Some people think the answer to these stories is more ethics laws, corruption laws, and campaign-finance laws, but that’s like putting a band-aid on a compound fracture. Besides, it is quite likely that no laws were broken, either by Lew, Citigroup, Shelby, or his former aides. This is just the way Washington works, and the beneficiaries are the insiders who know how to milk the system. The only way to actually reduce both legal and illegal corruption in Washington is to shrink the size of government. The sleaze will not go away until politicians have less ability to steer our money to special interests – whether they are Wall Street Banks or Alabama universities. This video elaborates.

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Dan Henninger authored a fascinating column in the Wall Street Journal a few days ago comparing people who became rich honestly to those who used government favoritism. He warns that Obama’s policies will encourage the latter version – meaning that smart entrepreneurs will seek wealth by gaming the political system. At best, this is a zero-sum game for the overall economy, and it is quite likely that it will reduce prosperity since labor and capital will be allocated based on political power rather than market forces. But there are two other reasons to reject Obama’s industrial policy. First, political control is necessarily unjust and corrupt since political insiders will have an advantage. This is something that also should upset honest left wingers. As my Cato colleague Will Wilkinson sagely noted, “…the more power the government has to pick winners and losers, the more power rich people will have relative to poor people.” Second, this system undermines support for genuine free markets because the average person begins to associate wealth with corrupt government handouts. This insight (sent to me by an American who fled Greece many years ago) helps explain why average people sometimes support punitive tax rates in hopes of clawing back some of the unearned wealth in the hands of insiders. The downside of that approach, of course, is that the honest and productive entrepreneur also suffers from those policies, thus undermining the economy’s ability to generate earned wealth:

…a small classic by Hillsdale College historian Burton W. Folsom called “The Myth of the Robber Barons: A New Look at the Rise of Big Business in America” (Young America’s Foundation). Prof. Folsom’s core insight is to divide the men of that age into market entrepreneurs and political entrepreneurs. Market entrepreneurs like Rockefeller, Vanderbilt and Hill built businesses on product and price. Hill was the railroad magnate who finished his transcontinental line without a public land grant. Rockefeller took on and beat the world’s dominant oil power at the time, Russia. Rockefeller innovated his way to energy primacy for the U.S. Political entrepreneurs, by contrast, made money back then by gaming the political system. Steamship builder Robert Fulton acquired a 30-year monopoly on Hudson River steamship traffic from, no surprise, the New York legislature. Cornelius Vanderbilt, with the slogan “New Jersey must be free,” broke Fulton’s government-granted monopoly. If the Obama model takes hold, we will enter the Golden Age of the Political Entrepreneur. The green jobs industry that sits at the center of the Obama master plan for the American future depends on public subsidies for wind and solar technologies plus taxes on carbon to suppress it as a competitor. Politically connected entrepreneurs will spend their energies running a mad labyrinth of bureaucracies, congressional committees and Beltway door openers. Our best market entrepreneurs, instead of exhausting themselves on their new ideas, will run to ground gaming Barack Obama’s ideas. …Political entrepreneurs create fewer jobs than do market entrepreneurs. We need new mass markets, really big markets of the sort Ford, Rockefeller and Carnegie created. Great employment markets are discoverable only by people who create opportunities or see them in the cracks of what already exists—a Federal Express or Wal-Mart.

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