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Special Interests, Institutionalized
Posted by: Jon Henke on Wednesday, April 12, 2006

Dog bites man, water is wet, politician helps contributors...
[S]ince Hillary Rodham Clinton was elected to the Senate in 2000, Corning and its mainly Republican executives have become one of her largest sources of campaign contributions. And in that time, Mrs. Clinton has become one of the company's leading champions, delivering for it like no other Democratic lawmaker.
Read the story to learn about how helpful Hillary Clinton has been to Corning and how grateful Corning has been in return; or, if you please, how generous Corning has been to Hillary Clinton and how helpful Hillary has been in return. It's a real political chicken/egg quandary.

The story claims that Hillary's "work on behalf of Corning began even before company officials had made a single contribution to her as a senator", but Corning's Political Action Committee (CorePAC) gave $3000 to Hillary Clinton during the 2000 election campaign. If she did something for Corning, Inc prior to that donation, the story gives no indication what it might have been.

K Street has been added to the Constitution, lobbyists are the fourth branch of government Ethics problems for Hillary? I doubt it. Correlation is not causation, there's no evidence of quid pro quo (as was the case with Cunningham), and — most importantly — this is pretty much par for the Congressional course. In fact, we've become so comfortable with the idea that politicians will do favors for contributors and powerful special interests that the New York Times included this line in the story...
It is part of a senator's job description to help a major employer in his or her home state, and it is not unusual for that employer to encourage that help or to reciprocate with campaign contributions.
Part of their job description. Apparently, the part about doing favors for wealthy businesses was redacted from my copy of the constitution. From the Senate's copy, too.

What we have in this case is nothing less than the normalization, the institutionalization, of rent-seeking behavior. K Street has been added to the Constitution, lobbyists are the fourth branch of government, and yet we still act shockedshocked!—when politicians openly acknowledge the system. Well, some politicians, anyway.

That's why, when Democrats try to make hay over the recent scourge of Republican corruption — or when Republicans respond by pointing to Democrats like Alan Mollohan and William Jefferson — I always want to point out that both Republicans and Democrats are wrong. It's the libertarians, who insist that the problem is built into the system, who have the best of this argument.

As Matt McIntosh wrote in an excellent essay on the incentive problems intrinsic to our system, "the hardest part of any meaningful reform is always the fight against those with a vested interest in the status quo". People who snipe at the corruption in one party or the other are "hacking away at the branches of evil without striking the root".

If the solution to corruption is merely to replace a Republican Congress with a Democratic Congress, then we have solved little at all. The incentive for Politicians to "help" powerful and wealthy interests — and for powerful interests "to reciprocate with campaign contributions" — will only be institutionalized that much more. And in a few years, we'll be reading new stories about Democratic Corruption side by side with stories about Republican Senator X granting favors to Contributor Z for special favors. Just part of the job description, you know.

UPDATE: Decision '08 asks "how a similar story involving Tom Delay would have been written". Captain's Quarters expands on that...
I suppose when Jack Abramoff does this on behalf of native Americans, it shows how the dirty lobbyists have corrupted the American political process. However, when Corning cuts out the middleman and shoves money into Hillary's coffers just before and after she initiates official actions on their behalf, suddenly that's just how the game is played! Had this story been about a GOP Senator and involved any lobbyist for Corning, those two paragraphs would have been the lead on a front-page political scandal story.
MORE: Josh at The Everyday Economist points out that, on the same day they call the Clinton/Corning backscratching "part of the job description", the New York Times also runs an editorial criticizing the "patronage machine that rewards [Mollohan] with campaign contributions from grateful nonprofit executives who often owe their jobs to him". Well, what's wrong with that? It's part of his "job description" to look after those grateful nonprofit executives.
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Previous Comments to this Post 

Being quite dead serious - How would you suggest we decouple the money from the power? I know what the problem is, I don’t know the solution.

If you’ve written it before, I’d love to read it. Right now my best guess would be to shoot the lawyers, followed by the politicians. Not sure if that’s a workable solution, though...
Written By: Robb Allen (Sharp as a Marble)
(just realized my URL for my blog is wrong! Ooops!)
Written By: Robb Allen (Sharp as a Marble)
(try that again. Should be
Written By: Robb Allen (Sharp as a Marble)
Matt McIntosh’s essay outlined some of the policies I’ve proposed and some I’d like to see enacted. It really is a good piece and I think it ought to get more attention.
Written By: Jon Henke
Given how the mass media act and are pandered towards, are lobbyists the fourth branch, or the fifth?
Written By: Dave
URL: http://
Our gov’t is for sale to the highest bidders.

Regarding the first commenter, former Republican strategist Kevin Phillips proposed a number of solutions in his 1994 work Arrogant Capitol.
Written By: Hume’s Ghost
Libetarians really don’t have the best of the argument.
Because libertarians, Libertarians, and neo-libertarians all seem too willing to ignore one basic fact:
Money flows to someone who has/creates something of value.
"Build a better mousetrap, and the world will beat a path to your door." is a true and accurate description of how the capitalism works. So "Set the standards on building mousetraps, and the world will beat a path to your door." Is just as true.
Libertarians (of whatever iteration) espouse market forces as the solution to everything.
Well, market forces create just this sort of corruption. Can’t have one without the other.
I have never yet seen a single, logical and workable suggestion to solve this from anyone.
You can try to reduce it. You can try to control it. From what I’ve seen, libertarians try to ignore it, then claim the moral high ground on the issue.

If I’m wrong, I apologize.

But even limited government (only national defense and contract enforcement) retains enough power for moneyed influence to flow in an attempt to affect how that limited power is applied.
Hence: Corruption.
The same under Democrat, Republican, and Libertarian leaders.

The same way mechanical devices create heat as a byproduct, government creates corruption as a byproduct.
Written By: Nathan
Nathan, if the money will still flow in an attempt to affect that limited power as you say, then wouldnt the money and corruption themselves also be limited?

You seem to agree that the problem is endemic to the system, yet you dont seem to accept that reducing the supply of the product (power) would reduce the demand (money).
Written By: Chris
URL: http://

You haven’t discussed this much with many libertarians, have you? We use exactly the fact that you claim we overlook.

Libertarians want less (frequently significantly less) government, ergo a government that has less value. Ergo less money flows to government, ergo less corruption.

As to market effects - a more "markety" economy typically means less government, ergo less value to government.

It’s not that there will be no corruption. No one sane argues that. It’s just that there will be less corruption because of the fact that "Money flows to someone who has/creates something of value" and in proportion to the relative demand of that something (a first order approximation... glossing over a lot of economics).
Written By: Jody
URL: http://
I haven’t discussed. I’ve listened.

If the fact is the problem, then "limited" is only a difference of degrees. Quantitative difference vs. the qualitative difference claimed.

Thus: no moral high ground.
Written By: Nathan
So if you just agreed that the libertarian value of limited govt would decrease the corruption, while no other arguement from conservatives or liberals would, then dont libertarians have the best answer? IE the one that actually decreases corruption as you just admitted?
Written By: Chris
URL: http://
"It is part of a senator’s job description to help a major employer in his or her home state..."

I think this can be considered to be true in the sense that it’s part of a senator’s job description to help everyone in his or her state. The problem comes in when the help is given at the expense of one group over another, which is pretty much how it always happens.
Written By: Unknown
URL: http://
Nice job of trying to put words into my mouth.
I said no such thing.

What I said was that even under a principle of limiting government to national defense and contract enforcement only, the amount of power is still so large that corruption would remain unchecked.
Graft/corruption/bribes might only be, say, 1.3 trillion dollars instead of 1.4 trillion. Whoopee.
Or, since libertarians tend to be sanctimonious about corruption (just as the press excuses it for democrats, libertarians would probably excuse it for libertarians), it might actually be worse.

I grant you, it might not be worse.
Pot, kettle. Both black, even if one has less black surface area.

I can’t spell it out any more simply: Human nature combined with market forces will guarantee that someone with money and less power than they want will make a deal with someone with power and less money than they want.

In my opinion, libertarianism has that in common with communism: looks good on paper, but tends to ignore the more selfish aspects of human nature.
Written By: Nathan
If I’m wrong, and libertarianism has something to offer that will end corruption rather than just reduce it slightly due to the purity of their hearts, I’m willing to discuss it.
Like I said, I haven’t discussed, but I’ve listened. I’m trying to discuss now.
But to date, it seems like the best way to make an ex-libertarian is to vote him into office. That doesn’t inspire confidence in the idea of a corruption-free libertarian (or Libertarian, or neo-libertarian) government.

Human nature sucks. But we have to deal with it.

I think a rational, considered approach that disincentivises corruption would be the way to go, no matter which party/ideology actually does it.

The problem seems to be that "rational, considered" and "politician" seem to be mutually exclusive.
Written By: Nathan
It’s like PJ O’Rourke once said, Nathan:

"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators."

The fact is business regulation to the point of picking winners and losers is a relatively new phenomenon in the US, as is the corruption that comes with it. Before you start lumping libertarianism with communism as "looking good on paper," you should first realize that for the first 150 years of US history, we were a libertarian nation, and during that era we went from being a colonial agricultural backwater to being the wealthiest, most powerful nation in the history of history.

Written By: Peter Jackson
Peter, we were NEVER a Libertarian nation... You are like so many other folks, you have an "image" of the past, not a history. They US has rewarded and impeded businesses from the get-go.

I will posit a theory, mt own,that IT WAS GOVENMENTAL/SOCIETAL DECISIONS THAT MADE THIS COUNTRY. The decision to create the Trans-Continental Railway creted the market finished stell products in this nation. In the beginning rails, engines and rolling stock were EUROPEAN. Because of the created demand and tariffs an indigeneous stell industry emerged in the US.

Later, behind tariffs, ship building and specialty steels emerged as Carnegie invested in chrome armour steel for the US’ new Stell Fleet. It was the decision by the Governemnt to crete the Steel Fleet and hten the Great White Fleet that sparked more industrial development.

The need for large amounts of computing power to model Thermo-nuclear reactions in the "Super" sparked ENIAC and MANIAC and much of large computing market. It was the further decision to focus on hi-tech weaponry and aviation development, in response to the Cold War, that lead to much of the advanced technology development in the US.

The decision to enter into the Space Race spurred even more computing and materials development.

My point, Societal decisions, ratified by the government drove economic development in this nation. We are the richest most powerful nation because of Government AND Corporate actions. this nation was not and is NOT a Libertarian nation.
Written By: Joe
URL: http://
Well Joe, I don’t think you and I share enough vocabulary to really discuss this. Maybe some other time.
Written By: Peter Jackson
I think the western world was mired in colonialist mercantilism in the 1700s and through most of 1800s, no? I agree with Joe; that’s rather at odds with how libertarianism is presented.
What was libertarian about forcing Japan to open up trade to the West? About declaring war on Spain in order to take its global territories? About joining in with 7 other nations to sack Beijing and force it to grant the U.S. the same treaty status as the other nations that had gotten there first?
Written By: Nathan
Sorry I haven’t responded. Essentially, my arguments are three fold here:

1) Yes, Nathan is right to some extent. Making government smaller would merely shrink the opportunity for corruption by an equivalent level. Corruption would still exist. However...

2) The correct libertarian argument is that the problem is neither Republican nor Democratic — it is structural. The other parties are claiming the corruption stems from their opponents, while libertarians point out that the new boss will be the same as the old boss. The Great Man Theory of good governance is wrong.

3) The McIntosh article I linked has suggestions for reducing the game theory and public choice problems that afflict ANY size of government. That would lead to a reduction of corruption in a government of any size. My own contribution to that debate is the Line Item Budgeting idea.
Written By: Jon Henke
What vocabulary do we need to share, Peter? You seem to be speaking Enlish I am...It’s not vocabulary we don’t share, we don’t share a common view point, Peter’s.
Written By: Joe
URL: http://
Maybe a third party is the answer to a lot of problems. But as you say in a different post, Jon (or was it McQ?), nearly any problem can be made the subject of incentivisation or disincentivisation. So rather than merely reducing the problem, true mitigation can occur. Reducing corruption by 80% means nothing. Reducing it to 1-2% of former levels is a true success...such mitigation can by done by any party, but the current ones lack any political will to do so.
A libertarian-leaning party may be formed around such political will, but I still insist that it would be the new/3rd party status making the difference, with no true, sustainable inherent advantage against corruption just because of a libertarian lean.
Written By: Nathan

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