Congress: Rent Seeker’s Delight
By that I mean the Congress of the United States. It can find more ways and more reasons to reward rent seekers than perhaps any legislative body I know. That’s probably because it has the largest budget of purloined confiscated taxed dollars in the world. And even when it has none, it still manages to hand out borrowed dollars. In fact, we’re now to the stage that it involves generational theft – running up a debt that will have to be paid back by those not even born yet. Imagine emerging from the womb with about $38,000 in debt already hanging over your head. That’s the current charge. Of course there’s always next year, when, as you know, the fed plans on spending another trillion we don’t have. So in the big scheme of things, this story may almost seem trivial. But it is indicative of how “special interest” democracy rewards rent seekers and finds new ways to loot the economy that simply boggle the mind.
Call this one “too special to fail”:
The radio business has nothing to do with the plan to overhaul the nation’s system for regulating banks and other financial institutions.
Except, it turns out, in Congress.
One of most intriguing mysteries here in recent weeks is why members of the Congressional Black Caucus have chosen to buck their party and president in trying to stall financial regulation reform.
The answer lies at least in part with an aggressive lobbying campaign by a troubled New York City-based radio broadcasting company, Inner City Broadcasting, whose co-founder is a prominent New York politician and businessman, Percy Sutton.
In a rare break with President Obama, the caucus, made up of black members of Congress, is holding back support for the legislation because it wants the administration to help minority-owned businesses, including Inner City, whose financial plight has been specifically identified in meetings with top administration officials.
In a variation on “no justice, no peace”, the CBC has a new slogan: “No loot, no vote” (and trust me, they’re only one of many doing this all the time, from both sides of the isle, in Congress).
Inner City Broadcasting has enlisted the CBC to plead its special case. It apparently has a bad business model that has failed and it insists its specialness exempts it from the results of that – after all, it is a minority owned business, don’t you know.
And that means it wants an exemption from failure. The story:
Inner City Broadcasting, which owns 17 commercial stations nationwide and was co-founded in 1971 by Mr. Sutton, faces a possible financial collapse because of pressure by Goldman Sachs and GE Capital to repay nearly $230 million in debt, Pierre Sutton, his son, said in an interview Wednesday.
Inner City has been battered by declines in advertising, as have many stations around the country, which have experienced drops of 10 percent or more in the last year because of the recession and the move of advertisers to the Internet.
But the other stations don’t have a friendly caucus in Congress do they? And that caucus knows its party owes it some loot to remain on their side. Their refusal to vote for more financial regulation is simply a little exercise in reminding their party of that.
Members of the caucus asked the administration to squeeze lenders like GE Capital and Goldman Sachs to renegotiate their loans with Inner City and other black-owned radio stations, arguing that these financial institutions themselves had already received federal assistance. Some caucus members even pushed to include black-owned radio stations in the bailout.
“There is a lot of concern about Inner City Broadcasting,” said Barney Frank, Democrat of Massachusetts, the chairman of the House Financial Services Committee, who set up one recent meeting with Mr. Geithner and Mr. Emanuel at the request of the Black Caucus.
Mr. Frank said the radio stations were only one issue raised by the caucus, and that others included financial difficulties faced by black-owned auto dealers, newspapers, banks and government contractors.
Yes, friends, it’s only fair. Extortion, influence peddling and payoffs (like 300 million for LA if a certain Democratic Senator votes for health care) are illegal everywhere but the US Congress where they’re business as usual — you know, the most ethical Congress ever?
And they wonder why they enjoy so little of the American people’s confidence and respect.