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September 26, 2012 11:52 AM The Endless Lobbying Arms Race

By Ryan Cooper

Dylan Matthews had a quintessential Wonkblog post yesterday, conclusively arguing through a series of charts that the newfound wealth of Washington, DC (whose metro area now has seven out of ten of the richest counties in the country) is not about the size of the federal government, nor the growth of contractors, nor our more-educated population. Instead, it’s all about influence peddling:

Each million dollars spent on lobbying is associated with a $3.70 increase in the D.C. wage premium. Correlation isn’t causation, obviously, but it seems improbable that the $1.7 billion increase in lobbying between 1998 and 2010 wouldn’t increase wages in the D.C. area. And though lobbying alone is not a huge industry, its growth most likely grew in concert with other influence-peddling activities. The rise of influence-peddling more broadly, more than just lobbying, is likely what’s driving this correlation.

The surprising result here is that all those great piles of money don’t seem to influence the actual outcomes all that much:

But why would businesses spend more on lobbying when there are fewer contracting dollars to go around, and no increase in the amount of regulation they want to fight? Because they’re in an arms race. That was the conclusion of University of North Carolina political scientist Frank Baumgartner and his coauthors in Lobbying and Policy Change: Who Wins, Who Loses, and Why. The book, the most expansive study of lobbying in the U.S. ever conducted, found that most of the time, nothing changes due to lobbying, not because it doesn’t matter but because effective lobbies on each side of a given issue fight each other to a draw.

This suggests that the coalescing liberal narrative around Citizens United and the rise of political money is somewhat mistaken. To exaggerate a little, it’s seen as a vast plot from the corpratist right, where a bunch of executives have been cackling evilly as they watch Congress have to wade through a hip-deep pool of hundred-dollar-bills just to take a vote. However, it seems at least partially true that businesses are locked in a lot of increasingly expensive and unpleasant zero-sum struggles. Give it a few more years of skyrocketing lobbying costs, and businesses may swing over to supporting limits on influence peddling out of sheer desperation.

I wouldn’t take this nearly as far as Matthews does. Lobbyists only fight each other to a draw insofar as there are two well-funded sides to every question. The way that I imagine ordinary citizens usually get shafted by this process is that with congressional gridlock and the price of influencing a congress critter rising fast, it increasingly takes major spending to get anything on the agenda. If you don’t have money or connections, you’re out of luck. Furthermore, there are many areas in which the monied classes are in broad agreement, or have completely overpowered the opposing side. Remember what happened during the negotiations over the cramdown proposal back in 2009?

…not only did the banks kill the cramdown proposal, they walked away with billions in extra bailout money for their trouble. And remember, this all happened in April of 2009, when the banking industry was at its absolute nadir. Isn’t America great?

An unrestrained rich lobby can basically write their own laws at this point. One hopes that even businesses can figure out that road leads nowhere pleasant.

@ryanlcooper

Ryan Cooper is a National Correspondent at The Week, and a former web editor of the Washington Monthly. Find him on Twitter: @ryanlcooper

Comments

  • c u n d gulag on September 26, 2012 12:18 PM:

    Who lobbies for "We the People?"

    We do!
    When we vbote.
    And that's why the greatest crimes being committed in our time, are disenfranchisement and voter suppression.

  • c u n d gulag on September 26, 2012 12:28 PM:

    "...vote..."

    Y kent oui haz "Edit" pleez?

  • meander on September 26, 2012 12:34 PM:

    And just imagine what will happen if comprehensive tax reform gets on the agenda. All of the pundits' and (some) politicians dreams of simplifying the tax code will be blown up in a frenzy of greedy, self-interested lobbying to keep or expand loopholes for their particular industry.

    In other words, any pundit or politician who calls for a dramatic simplification of the tax code is living in a dreamland, inside a fantasy world, on another planet.

  • Shane Taylor on September 26, 2012 12:47 PM:

    Reminds me of Robert Reich's argument back in 2008:

    You see, if you examine closely what these lobbyists are doing in Washington and Brussels, you find that mostly they are _fighting each other_. Different industries are squaring off, or segments of industries or large companies are battling each other, to make sure that public policies work to their advantage and not to the advantage of their competitors, or to make sure that they get their share of public subsidies and protections, or to make sure those subsidies and protections donít go to their competitors.

    Google, for example, never thought about having a Washington office until it became a public company and had to deal with the stark reality that its major competitors, Yahoo and Microsoft, had platoons of Washington lawyers and lobbyists. Google was understandably worried that there were so many issues Ė- intellectual property, competition policy, and trade policy, for example Ė- that might be decided to its disadvantage if it did not have its own platoon of lobbyists in Washington. Itís an arms race, egged on by lawyers and lobbyists who have their headquarters in Washington and Brussels, and who carry on what can only be described as an extortion racket, selling their services to large companies, creating and sponsoring trade associations, bundling campaign money, and all in an effort to drum up more business from other companies and other sectors of the economy.

    PD: http://dissentmagazine.org/democratiya/article.php?article=346

  • Ron Byers on September 26, 2012 1:13 PM:

    Shane, you have described the current situation to a tea. Once a company reaches a certain size it has to secure permanent representation in the capital. The folks in the capital live high and wide.

    Did you ever read the Hunger Games. The residents of the capital waxed fat off the work of the people in the outlying districts who lived in abject poverty.

  • Shane Taylor on September 26, 2012 1:32 PM:

    To clarify, my previous comment was a quote. The two paragraphs are from an interview by Robert Reich.

  • Michael Cargal on September 27, 2012 9:05 AM:

    most of the time, nothing changes due to lobbying, not because it doesnít matter but because effective lobbies on each side of a given issue fight each other to a draw.

    That's exactly what James Madison predicted with a strong central government in Federalist 10. He said the factions would balance each other out. He didn't want strong state governments because he thought states were small enough that a single faction could take over.