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Tuesday, December 9, 2008

When You Empower Government, You Empower Lobbyists

The Washington Post carries a piece online today titled "Lobbyists Converge on Washington for Piece of Stimulus, Auto Aid." This is at least the third piece I've seen in the mainstream press recently on this theme: bailouts generate a lobbying bonanza.

But that's a narrow slice of the broader truth: increased government control over the economy gives more clout to lobbyists--and thus more power to whoever can afford the best lobbyist. Who do you think has the best lobbyists? It's not Mom 'n' Pop.

This is just one more reason--and a very relevant one these days--why increasing the size and power and government always has the effect of helping the biggest, most connected corporations at the expense of consumers, competitors, and taxpayers.

We saw a similar lobbying boom from hedge funds long before this meltdown, because Congress was promising an overhaul of hedge fund taxation and regulation. We saw a huge lobbying boom from Microsoft after Bill Gates realized he couldn't just make software and be left alone.

This lobbying won't end after a bailout vote. There will be lobbying on followup bills, lobbying the agencies that administer the funds, lobbying for and against the stipulations that become attached to the money, and then lobbying for turning those stipulations into economy-wide regulation. Should be good for DC property values, at least.

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