In the podcast I did with Dylan Ratigan last week, I mentioned we needed a Constitutional amendment mandating public funding of all federal elections. It seems to be the only way imaginable to get all of the dirty money and corporate lobbying efforts out of each and every attempt to close tax loopholes, reduce overall spending, and fix the tax code.

As if on cue, Tim Iacono points to this outrageous chart (via Time Magazine) showing how much dirty lobbying money has poured into DC over the past decade:

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Source: Time magazine.

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If you want to understand why the problems in DC are intractable, start with that graph above.

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Previously:
Government for Sale: 2009 Lobbying $3.49 Billion (July 14th, 2010)

Category: Politics, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

46 Responses to “The Lobbying Bubble”

  1. eliz says:

    In the words of Gomer Pyle: “Suuprise, Suuprise.”

    None-the-less, it’s great to see the numbers behind what has been obvious.

    Thank you.

  2. mitchw says:

    A couple of other factors need a looking at. Congresspeople don’t just raise money for their own campaigns, but for others’. That’s how they build up power within the institutions. Also, what about the up escalator from working on congressional staffs or in executive departments, and getting knowledgeable, cozy with, and valuable to special interests? What’s happening at all those cocktail parties, Barry? “Best govt. money can buy.”

  3. wally says:

    “It seems to be the only way imaginable..”

    When a country gets to a certain state of dysfunction, does it ever really claw its way back from there without a fundamental overthrow or catastrophe?

  4. VennData says:

    Was it that Obama was anti-business…

    http://www.uschamber.com/

    …or just anti-lobbying that upset those alabaster-white pillars of the community and family men of “The Chamber”

    http://www.npr.org/templates/story/story.php?storyId=96735204
    http://www.usatoday.com/news/washington/2009-03-27-obama-lobbyists_N.htm

    What are the stats on Lobbying of Obama? and the resultant initiatives? Anyone? Data, not colored, large-font emails.

  5. droubal says:

    Controlling money in politics is likely not possible because legislation around campaign reform is always toothless.
    The only chance we have is when the public stops voting for Democrats and Republicans. The loss of job security is the only solution. What will it take for this to happen?

  6. MayorQuimby says:

    -Ban all insider trading for Congresscritters (actually allowable today).
    -Ban ability to vote themselves raises (future raises).
    -Term limits for every seat
    -Peg their wages to the median for their district
    -Period of 5 years between leaving office and serving in the private sector
    -No more tax write-offs for donors of jets and offices ie today Schumer can fly to LA on Buffet’s Gulfstream and Buffet gets to write off all the expenses.
    etc etc etc

  7. moonmullins says:

    Yeah, that’s what we need. More public money, so that the public unions can do to the country what they’ve gone to California.

    Bend over everybody, it’s Barry’s world.

  8. James says:

    > Bend over everybody, it’s Barry’s world.

    If you believe this, you’re not reading very carefully . . .

  9. greg says:

    So, we want the people who take the money, to vote in favour of not taking the money!
    What next Barry, are you going to call for them to regulate banks to ensure loans are only granted to people with jobs and incomes and ability to repay?

  10. NotAnEconomistButPlayOneOnTV says:

    The truly outrageous fact to me is only $3.5B is spent on lobbying in terms of benefits received from that lobbying. From OpenSecrets:

    http://www.opensecrets.org/orgs/summary.php?id=D000000125

    GE spent just under $40m in lobbying in 2010. Their lack of paying any US tax on profits alone dwarfs this amount. Their 2010 profits were $14B of which $9B were off-shore (supposedly). Even at a 10% effective tax rate (substantially below the advertised 35% current rate or 25% Ryan rate), that is still a $500m tax bill.

    If I could spent $40m and get $500m in benefits, I’d trade that all day.

    ~~~

    BR: See this for more: Government for Sale: 2009 Lobbying $3.49 Billion (July 14th, 2010)

    (I’ll add above)

  11. Robespierre says:

    Barry

    “I mentioned we needed a Constitutional amendment mandating public funding of all federal elections”

    That is 1/2 a fix. Politicians work for corporations for 2 reasons: to get re-elected and mostly because they will be rewarded immensely once they leave office. Or does anyone here thinks that all these “public officials” are worth what they get paid after leaving office?

  12. dougc says:

    Keeping graft and politicans apart is a futile venture, they will simply give the money to the legislators law firm or advertise on his radio-tv staion. We are screwed.

  13. AHodge says:

    truly ramped up and exeptional last 2 years.
    wall sts need for NO financial reform, and other protection money has been a lobbiest’s wet dream.
    their willingness to pay (for the goods of course has been nearly boundless

  14. 2010 Spending on Lobbying: $3.75 billion

    Registered voters: 150 million

    50 cents x 50 weeks x 150 million = $3.75 billion!

    If all you had to do was click a button to give 50 cents to lobby for or against some policy… do you think its possible that maybe once a week or so you’d get pissed-off about something or another to push that button?

    Would more people participate?

    Ya want change you can believe in? Then believe in your own capability to have an effect.

    Information and Communication Technology (ICT) has always been about easing and reducing transaction costs… there’s a role for it to play in this arena.

    Leveling The Transaction Landscape: Technology and the Campfire
    http://culturalengineer.blogspot.com/2011/04/leveling-transaction-landscape.html

  15. KJ Foehr says:

    “We have the best Congress money can buy.”

    And, even more importantly,

    We got the government we deserve. We let this happen.

    But it doesn’t need to be this way. We do have the power to change it. But if we don’t get involved and make campaign reform happen, some change like a constitutional amendment to control / limit the money and/or perhaps put a time limit on campaigns like the UK has, then it will never change.

    All big change comes from the grassroots, not the government.

    http://cgs.org/?gclid=COLMguKXuKgCFUh-5QodsROzEA

  16. Chad says:

    @moonmullins

    Typical spoon fed political rant. Amazingly, enough, the strategy to have middle class and lower fight each other over scraps while the top couple percent wipe their ass with money is working.

    Secondly, where does anyone suggest that more money go to any union?

  17. rip says:

    I’d say we’re doomed.

    Public financing? There’s a fight perhaps worth fighting.

    I once thought that just keeping financing within districts and states would balance things off. But it’s hard to find someone that does not work for a “global” company or want to. If they are being paid above the common wage scale.

  18. algernon says:

    The only way to reduce this corruption is to reduce the power of govt to grant favors & inflict penalties. Microsoft’s budget for lobbyists was zilch til they were attacked by the Clinton adminstration. No longer.

    Forced public funding of elections will merely drive the money underground. But with so much at stake, it will change hands sub rosa–more corrupt than now!

  19. Petey Wheatstraw says:

    The true currency of the US is the vote. I don’t give a damn how much money you have, you only get one vote. Nonetheless, people apparently vote against their own self interests, in droves. Fools and their money (votes) are soon parted (a good example is the re retirees in FL recently voting Alan Grayson — arguably the only person trying to help them — out of office). Maybe it’s the fluoride in our water.

  20. A says:

    Well, that’s the problem you have with bought-and-paid-for politicians.
    When those politicians are purchased, the purchaser expects an ROI.

  21. KJ Foehr says:

    Petey Wheatstraw Says:

    “… Nonetheless, people apparently vote against their own self interests, in droves. Fools and their money (votes) are soon parted (a good example is the re retirees in FL recently voting Alan Grayson — arguably the only person trying to help them — out of office).”.

    That is evidence of the power of words over the minds of vulnerable citizens. (E.g., Fox TV, Rush, Levin, Beck, etc.)

    “He who controls the medium controls the message. He who controls the message controls the masses.”
    - Joseph Goebbels

  22. farfetched says:

    I am constantly amazed that whenever there is a discussion of limiting the influence of corporations and lobbyists, an admittedly political discussion, the unions are invariably brought up.

    I’m wondering why the unions are the political whipping boy?

    The readers of TBP tend to be smart, certainly above average in intelligence (please don’t prove me wrong) and not over the top wealthy but with enough extra cash to invest. I’m assuming if they are like me, they would like to be tested with real wealth to see if they could remain responsible citizens with some concern about others.

    I’m pretty sure almost everyone here has read the recent pieces on our lovely fractional reserve financial system and our FRN debt backed currency. In short, that we are being scammed by central bankers and being ripped off through constant devaluation of our currency.

    In light of this FACT, why is that unions, who collectively bargain to offset the currency shell game for segments of our economy, are attacked for doing exactly what they should be doing? I’m also curious why everyone who isn’t in a union isn’t seeking to collectively bargain to get a raise IN NOMINAL TERMS due to this devaluation? Failing that, why aren’t we all seeking a currency that is a store of value?

    Example: I had a friend ask me if I thought an auto worker should make $70,000 a year. Aside from the fact that I’m not sure they make that much, I answered that if I thought $70,000 would continue to buy what $70,000 bought in 2000, and would continue to buy that same amount of goods and services into the future, perhaps not. But in light of the fact that it doesn’t and won’t, then arguing over nominal sums is a mugs game. Until our currency is a real store of value no one can blame the unions.
    Unions are a reaction to a problem, not the cause. PS: I’m not in a union nor do I represent one in any way, but one look at Wall Street, bankers, corporate corruption, central banks and their actions makes unions a forgone conclusion. We are again dealing with robber barons, outsourced sweat shops and the graft and corruption of the turn of the 19th century.
    Wealth in our system is not measured in nominal sums. It is measured in purchasing power.

    LOVE the comment Petey. The vote may the only way to get back the other currency.
    In the meantime in terms of voting currency, everyone one of us is as wealthy as one of the Koch brothers…..IF we pay attention.

  23. machinehead says:

    ‘we needed a Constitutional amendment mandating public funding of all federal elections’

    Early in the last century, government funding of political primaries was touted as a means of adding transparency to a system in which candidates were selected in ‘smoke-filled rooms.’

    What government-run primaries actually accomplished was to entrench the Depublicrat political duopoly, by drastically raising the barriers to entry for a new party.

    Public funding of all elections would allow the two branches of the duopoly to end their charade and formally merge. As the Soviet Union proved, one party control produces pure, absolute corruption from top to bottom.

    Letting government fund all elections would complete the seamless merger of party and state. It’s the endgame of corpgov neofeudalism.

    Our overlords calculate that Americans are now naive enough to fall for the brazen scam of public election funding. After all, when Americans tolerate QE II inflation the same way lab rats tolerate shocks from pressing a food lever, the experimenters can justifiably conclude that they’re dealing with amoeba-level intelligences.

  24. Petey Wheatstraw says:

    KJ and farfetched:

    True, also true, and thanks.

  25. wally says:

    “I don’t give a damn how much money you have, you only get one vote.”

    Not true, Petey. The votes that count are the votes on laws in Congress and you and I don’t have one vote there.

  26. farfetched says:

    Take it back Wally! Give the CONgress a clean sweep with your vote and you might get those votes back.

    How much worse could we all do with a completely untested ‘politician’ from ANY third party in 2012?

    Could a green or avowed communist, socialist or libertarian do any worse than what we have? I suspect not. There is a way. Simply refuse to vote for anyone even sounding like a dem or rep. or that takes any corporate money, lobbying or advertising.
    I’m also waiting for my chance to buy TSCO when I hear the news they are selling tar, feathers, torches and rails. I’ll double up if they sell guillotines.

  27. Almitra says:

    I live in Manitoba, where we have had two elections under legislation banning corporate and union donations. The parties are funded through substantial rebates and citizen donations (also heavily rebated). Citizen donations are capped at $3,000 per year, and spending during the election period is capped (about $1M per party). The social democratic party that introduced these changes remains in power; hoping to win again in October of this year. It never ceases to amaze me how devoted the party faithful are to fall suppers ($15/plate), silent auctions (an arms length of tickets for $10), and so on. With less than 10,000 members, the party has raised enough money to again spend the limit in the upcoming election without going into debt.

    Meanwhile, we are called the Manitoba Miracle by McLeans Magazine for our economic performance, we have had the lowest or second lowest unemployment in Canada for years, have reduced corporate tax to zero, have free medical care for all, have raised the minimum wage every year for 10 years, and so on. Coincidence???

  28. BillG says:

    It doesn’t surprise me that lobbying has been such a growth industry in the past couple years since the government has been passing out money in these last few years like it never has before.

    In my opinion getting rid of the senate would eliminate a lot of the lobbyist influence. Running a statewide campaign is expensive in most states – far more so than just running a districtwide ie congressional campaign. If we got rid of the senate and doubled the size of the house then we’d have house districts of about 350000 people. You could reasonably run a campaign in a district that size with nothing but public appearances and flyers. There’d be no need to have several campaign offices throughout the state, no need to travel anywhere, no need to run TV ads in more than one (or maybe two for totally rural districts) media markets. Thus you could put some pretty stringent limits on campaign finance and still get campaigns that people other than career politicians and millionaires could win. Those limits would remove the need for lobbyists to bring the politicians any money. And all that would be a good start but unfortunately as long as Uncle Sugar is doling out cash there will be a reason to hire someone to help direct some of that cash to your cause. It would be nice if the politicians could judge those causes on their merits rather than how much cash they could bring a campaign though.

  29. Kralizec says:

    You said, “[A] Constitutional amendment mandating public funding of all federal elections…seems to be the only way imaginable to get all of the dirty money and corporate lobbying efforts out of each and every attempt to close tax loopholes, reduce overall spending, and fix the tax code.” This seems confused, as the $3.49 billion dollars seems to be money given to the organizations doing the “lobbying.” However that may be, letting Representatives and Senators appropriate money for their campaigns and make laws utterly controlling their opponents’ campaign finances scarcely seems likely to put an end to efforts to change the views of Representatives and Senators. Rather, such a tactic seems likely to intensify such efforts, whether open or secretive, and whether illegal or legal.

    In any case, a vast restriction on the sources of campaign funding hardly seems liberal, but oppressive to nearly everyone involved. Will you agree at least that every member of the public, who ever experiences an intensely felt need to contribute his own money to the support of a worthy candidate, will feel oppressed through being shut out? This “public” financing of which you write would actually be a privatization, placing control of legal campaign finance in the hands of bureau chiefs and the congressmen whose laws establish and fund their bureaus. It would deprive every member of the public of one of his means of participating legally in his country’s politics. Men would work around your restrictions, Mr. Ritholtz. Have you thought about how to restrict their work-arounds, how to enforce your restrictions, how to punish determined political participants, and how severe to make the punishments? I don’t think you have, because I think you’re probably a decent man like the rest of us, who are merely prone to let our righteous indignation at human affairs push us unawares into tyranny, by degrees.

  30. Kralizec says:

    BillG: Good god, have you thought of just repealing the 17th Amendment to your Constitution? Please read The Federalist before casting any further aspersion on your bicameral Congress.

  31. maddog2020 says:

    But how much is spent lobbying for DWTS or American Idol? Cuz that’s the only elections most Americans seem to care about.

  32. Francois says:

    @moonmullins,

    Is it too much to ask you to get out of the talking point du jour and THINK for a change?

    The scarecrow of “more money to unions” doesn’t even pass the laughing test.

  33. Barry,

    Your optimism is endearing. But misplaced. There is no reform, constitutional or otherwise, that would get lobbying dollars out of politics. The state (i.e., the federal government, in this instance) exists to award economic advantage, and so long as that’s its raison d’etre, lobbying dollars will continue to pour in. The more power is held by the state, the more dollars flow in. Something as puny as words on a constitution would never hold back the tide.

    But I myself am optimistic–that the looming insolvency of the federal government will ultimately impair the ability of the state to award economic advantage. When the state has no power to award economic advantage, the lobbying tide will finally recede.

  34. AHodge says:

    as folks here interested in democracy and accountability
    lets name a few names
    i think the names behind your data are around.
    here are some names from the WSJ Dealmaker June 3 article

    http://people.tamu.edu/~jstrawser/acct229h/Current%20Readings/12.%20Congress%20Helped%20Banks%20Defang%20Key%20Rule%20-%20WSJ.com%20(Investments).pdf

    Kanjorski, Ackerman, Perlmutter, Barney Frank, Spencer Baucus.
    Delightfully, Kanjorski my personal worst, was voted out of ofice. Hope?

  35. AHodge says:

    thats june 3 2009
    Congress Helped Banks Defang Key Rule

  36. AHodge says:

    American Banker Yingling cited “20 congressmen” who personally badgered the FASB. lets find out the rest

  37. DL says:

    The more powerful the lobbyists, the stronger the case becomes for smaller government.

  38. farfetched says:

    They could still provide advantage through deregulation, subsidies, credits and exempting offshore profits.

    Let’s really think about this because this group is smart enough to narrow it down.

    How about we tax politicians for all contributions in cash and in kind (advertising directly and for their benefit) and then limit deductions to “earned” income (I know, don’t make me laugh). IOW, make them claim all income and contributions. Then limit deductions to whatever they are paid in their government job. Tax the additional contributions in cash and in kind at 100%. Then let the IRS do their job. It is unlikely politicians would want contributions from anyone at that point. Afterall, if WE are given money of any kind from ANY source over $11,000 we have to pay income or gift tax on it. Why are politicians above the law? If a relative gives you over $11,000 to get a job, guess what? The IRS is waiting for their cut.

    At the same time tax the corporations for lobbying at the highest individual rate. For example, GE paid no taxes, yet they surely paid lobbyists. Tax the lobbying amount at 100%, or better yet, since they are getting some benefit that can be measured in dollars, TAX the benefit as income subject to zero deductions.

    So we get around the Supremes idea of limiting corporate free speech but we use legislation to tax the benefits.
    I bet it wouldn’t take long to balance the budget or to limit lobbying.

    WTF, if they are going to buy our government we ought to get something out of it. This way we aren’t “limiting their free speech”, we are taxing their income.

  39. KJ Foehr says:

    The Curmudgeon Says:

    “The state (i.e., the federal government, in this instance) exists to award economic advantage, and so long as that’s its raison d’etre, lobbying dollars will continue to pour in.”

    I disagree.

    What if people had told MLK his ideas for equal rights were endearing, but impossible? Or Lincoln about keeping the Union? OR JFK about going to the moon? Etc, etc.?

    The government does NOT exist to award economic advantage; it exists to serve the people.

    This purpose has now been corrupted to the extent that smart people like you have come to think it is endearing for others to believe that it could ever be otherwise!

    This is the problem; we have let control of government slip away from us to the point that we don’t even know we still have the power change things!

    Further, lobbying money is not the real problem. It is a symptom, an end result, not the cause of the problem. The cause is the influence of big money in election campaigns.

    Lobbying is just the moneyed interests coming to collect their return on investment – ensuring that the politicians do what the campaign supporters want them to do, and even helping them do it by writing the legislation they want passed!

    If we break the link between the two (campaigns and lobbying), the cycle stops, or becomes much, much less effective in controlling politicians.

    If we stop big money from influencing elections and “buying” candidates, then elected officials will no longer be beholden to their wealthy supporters and can act independently of them and their lobbyists.

    They will be free to act on behalf of the people once again.

    This is not only possible; it is imperative that we do it to save our republic.

  40. Sechel says:

    I don’t know B.R.
    Seems to me, as a country we applaud wealthy politicians such as Mike Bloomberg as being freed from
    making. And in our early history politicians were politicians part time, returning to their businesses.
    Tell people they have a cap and have to be funded by the gov’t will only encourage more behind the
    scenes deals and make the political parties even stronger at the expense of independents.

  41. Almitra says:

    Nice to see many comments on this topic. Many realize this is a fundamental aspect of democracy. Get the funding of the political system right, and almost everything else will follow. I agree with at least one of the comments that to fully fund from public monies would be a mistake. It would erode the relationship between the elected and the electorate. Leverage the voluntary contributions, and cap individual contributions and cap overall spending. It works here.

  42. philipat says:

    Barry, I have been thinking about this a lot and I do share your view that Public funding of elections is the lesser of many evils and would actually pay for itself very quickly.

    However, our friends in the Supreme Court, as I understand it, recently ruled that it would be unconstitutional to prevent Corporations from making donations to political campaigns (Essentially treating Corporations just like an individual)? So your Constitutional Amendment would also have to make it illegal to use funds from sources other than those provided by the Public purse. I can’t, however, see the necessary two thirds of Congress getting behind that one!!

  43. Moss says:

    Disallow it for 1 year for each federal offense by any corporation.
    A company like Pfizer would be banned for life given the number of federal offenses they have committed.

    Just like a person who may get their license suspended .. take away a corporations ‘right’ to lobby.
    Don’t allow it to be expensed like any other business expenditure.

  44. HarleyHoward says:

    I know this is going to sound naive, but if we truly get back to an informed electorate and a government of the people, by the people, and for the people, it wouldn’t make any real difference how much lobbyists spent. We have to, as voters, let the elected representatives know we are paying attention, and if they don’t act in our best interests, we will vote them out!

    One of the first changes we need to make is to get them to live under the same laws and regulations they vote us to live under. They cannot exempt themselves from the results of their actions.

  45. VennData says:

    Lobbyist Fires Warning Shot Over Donation Disclosure Plan

    http://www.nytimes.com/2011/04/27/us/politics/27donate.html

    Uber-Lobbyists and “anti-business” sloganizers, the US Chamber of Commerce, is livid at Obama again, for putting more behind his promise to change the power of lobbying.