Lobbyists

Sen. Elizabeth Warren’s recent rant about lobbyists in the Trump transition team (just before they were all sent packing) brings me once again to editor David Rotman’s MIT Technology Review article Capitalism Behaving Badly. Specifically this:

[W]e should admit that markets are created and shaped by government policies, including government support of innovation.

If we are to admit that markets are created and shaped by government, we also must admit that lobbying is created by government as a protective reaction to that regulatory manipulation ‘market’ creation and shaping.

Don Boudreaux puts it well at Cafe Hayek

Sen. Elizabeth Warren is upset that President-elect Trump’s transition team includes many corporate lobbyists (“Elizabeth Warren Criticizes Donald Trump Over Lobbyists in Transition Team,” Nov. 15). Well now. Sen. Warren is second-to-none at empowering Uncle Sam to exercise broad discretionary powers over corporate affairs – powers that, if exercised one way, yield that company hundreds of millions of dollars in additional profits or, if exercised another way, saddle that company with hundreds of millions of dollars of additional costs. It is hardly surprising, therefore, that corporations work diligently to have their voices heard among the din of everyone clamoring for the new emperor’s attention.

For Sen. Warren to be upset that Trump’s transition team is filled with hordes of corporate lobbyists panting for political favors is akin to a Madam being upset that her bawdyhouse is filled with hordes of men panting for female favors.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

Lobbying is protected by the First Amendment. Even absent Constitutional protection, lobbying would continue at a level commensurate with the degree to which government creates and shapes markets, only it would be more nefarious – say like the Clinton Foundation pay-to-play shenanigans.

Meanwhile, the House GOP beat back a plan by some of its own members* to restore internal super-lobbying by reinstating earmarks.

*Who should now be Primaried.

Update 1:15PM: In the interests of naming names, “Reps. John Culberson of Texas, Mike Rogers of Alabama, and Tom Rooney of Florida are listed as sponsors of the amendment.”

Cognitive Dissonance

Our Democrat leaders in Washington passed a bill last week that they didn’t much like. The passage of this bill increased government tax receipts by about $30 million a day, and ‘saved or created’ 70,000 construction jobs along with 4,000 federal jobs. Since the Dems claim to be about ‘revenue enhancement’ and government ‘job creation,’ you might wonder why they weren’t patting themselves on the back, rather than complaining that the GOP “put a gun to our heads.”

The bill in question was a temporary extension (the 21st such since 2007) of the Federal Aviation Administration’s operating authority. Since July 23 of this year the lack of this authority had caused the FAA to miss collecting taxes of $28.6 million a day. If the partial suspension of FAA operations continued until September, when all our Congresscritters will have completed reunions with their Pomegranate trees consultations with their constituents, that could have totaled a billion dollars. That’s billion with a “B”.

The partial shutdown was caused by the Democrat’s insistence on preserving $17 million in pork and changing a unionization process rule that has been in place for 75 years. So, for Senate Democrats, pork preservation and enabling public service unions to more easily organize are higher priorities than jobs and tax receipts. These preferences come together under the general heading of ‘bribing the base.’

The Democrats were getting a bit squirmy about it, though. Transportation Secretary Ray LaHood and the president pleaded with Congress to solve the problem; As if the problem was the whole Congress and not just Democrats in the Senate insisting on pork and a mini-version of card-check:

The GOP-led House passed a long-term FAA funding bill last month that included a controversial labor provision that would overturn a decision by the National Mediation Board allowing airline and railroad employees to form a union by simple-majority vote. Republicans, who have long been concerned about union intimidation in these votes, want to keep the former rule treating a non-vote as a “no” vote.

But once that bill stalled over Democratic objections, lawmakers turned to a short-term extension that has passed 20 times before to keep the FAA operating since 2007.

But that effort stalled, too, when Republicans added a separate provision stripping $16.5 million in subsidies for rural airline services.

The rural airport subsidies come from the well-worn pork barrel Congressman John Murtha made infamous with the John Murtha Johnstown-Cambria County Airport.

The labor provision may have been ‘controversial,’ but only because the Senate Democrats were insisting on letting a bunch of bureaucrats at the NMB change a rule that’s been in place for over 75 years.

So what did the Senate Democrats do after passing a temporary extension they could have passed 2 weeks earlier? They called a press conference to tell us the delay was all the fault of the Republicans. This charade proved too much even for ABC:

http://abcnews.go.com/assets/player/walt2.6/flash/SFP_Walt_2_69.swf

What is scary is that Senior Democrats were not feigning outrage and shock when there wasn’t universal acceptance of their ludicrous assertions – they truly believe what they said. When leaders’ foundational beliefs and tried and true methods suddenly don’t work – even are mocked – dangerous things can happen.

There is a final twist. The Transportation Secretary announced that he is not bound by the pork elimination provision, in any case. So, the Democrats cost the United States Treasury over $200 million in tax receipts, and then will go ahead and spend another $17 million on several examples of Murtha’s folly in violation of the law they just passed.

Update 2:05PM: Debra J. Saunders reports in the San Francisco Chronicle that Senator Barbara Boxer, blocked a vote on the legislation.

Sen. Barbara Boxer chided Karl for showing “a certain naivete” in not understanding that “this is about government threats.” She also challenged Karl by asking if he had reported on GOP opposition to a vote on a “clean” bill. “Clean” here means no pork cuts.

Boxer seemed to have forgotten that she blocked a vote on the House Bill.

It’s the moral hazard, stupid!

How budget battles go without the earmarks

…[T]he absence of earmarks also allowed for a more freewheeling debate on the House floor during consideration of the Republican plan to slash $61 billion from this year’s budget since Democrats and Republicans were not caught up in protecting the special provisions they had worked so hard to tuck into the spending bill…

[Earmarks play] an insidious role in pushing up federal spending through what is known in legislative terms as logrolling.

RTWT.

Earmark aficionados have advanced 2 major defenses of the practice.

  1. Individual members best know the needs of their constituents, directing the money should not be left to bureaucrats.
  2. It’s a minuscule amount of money relative to the Federal budget.

Amazingly enough, the first argument evaporates when there is no money to direct. It appears to have depended on a presumption of what “presumption” means. As in presuming you have the right to a permanent floating slush-fund.

The second argument was never more than an attempt at obfuscating the 2 major moral hazards of earmarks: bribery by your peers using other people’s money, and becoming accustomed to it.

Without earmark trinkets, it becomes significantly more difficult to leverage a few millions here and there into trillions in Federal spending. Votes bought in exchange for Federally funding an indoor rain forest in Iowa, for example, will be harder to come by. When the bribery opportunities disappear, spending debates can be more nearly rational. Whooda thunk it?

Well, everybody. Really. Even most Lobbyists, Bureaucrats, Representatives and Senators.

The only point of earmarks has been assisting the continued growth of Big Government by enhancing the power of the loot dispensers. This issue is multi-partisan – excluding only those representatives who adhere to morally equivalent Big Government philosophies, like fascism and socialism.

If any of your congresscritters insist on defending earmarks, they need to be retired.

Find the porker

A list of Senators in descending order of earmark requests in the $trillon omnibus spending bill: The Omnibus Arrives

If your Senator appears, make a note of the name and then look up when they next stand for election. Start campaigning against them now, whenever that may be.