BuckeyeBlog

Everyone’s favorite mustachioed host of 20/20, John Stossel, has a good article in the Manchester Union Leader about the real way to curb lobbying abuses: reduce the size of government. His comments apply as much to the state level as they do to the federal. Anyone who thinks the best way to reduce the influence of special interests is to enact more campaign finance reform laws needs to read this article.

Major economic interests can afford to pay for lobbying operations that provide congressional staffers reams of information about their industries and their “need” for legislative favors. Under these circumstances, what chance do masses of unorganized taxpayers have?

The Public Choice school of economics calls this the problem of concentrated benefits and dispersed costs. Individual members of relatively small interest groups stand to gain huge rewards when they lobby for government favors, but each taxpayer will pay only a tiny portion of the cost of any particular program, making opposition pointless….

“Good government” types rightly abhor this influence-peddling, but they propose pointless reforms like bans on lobbyist-sponsored gifts, junkets and rides on corporate jets. They also back a vicious assault on free speech: campaign-finance restrictions designed to reduce the influence of lobbyists in political campaigns. Despite all these “reforms,” influence-peddling goes on.

For good reason. None of the reforms gets near root of the problem.

The root is government power. When government is free to meddle in every corner of our lives and regulate the economy through taxes, regulation and subsidies, then “special interests” have every incentive to work on the politicians to preserve their turf or gain an advantage.

A tax, regulation or subsidy can make the difference between an industry’s success and failure. If the government were not giving preferential tax treatment to ethanol, the corn farmers and ethanol processors would have to find something else to do because their product can’t compete against regular gasoline on a level playing field.

In a real free market, a company succeeds only by making things consumers want to buy and keeping costs low enough that the market price yields a profit. Sadly, in our mixed economy, success can be achieved another way: by lobbying the government for advantages over one’s competitors.

This entry was posted on Tuesday, March 11th, 2008 at 12:36 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.