Monday, March 21, 2016

Crony Capitalism and Threefolding: Part 4

Two Draped Figures. Altered version of a
drawing by Cherubino Alberti, 1553-1615.

L ARGE percentages of the public in the U.S. feel at least a dollop of cynicism toward their government, and crony capitalism is clearly one cause. It produces a perception that government is for sale.  For economic interests to take over government is of course contrary to social threefolding.

According to the Center for Responsive Politics, in 2015 $3.2 billion was spent to pay salaries and costs of lobbyists in the U.S.  There were almost 12,000 registered lobbyists.  Crony Capitalism, the 2015 report put out by the Community for Economic Development, gives the same figures but notes that the number of people in Washington who are lobbyists or somehow associated with them is by some counts closer to 100,000.  The CED Crony Capitalism report also says the $3.2 billion figure for 2015 may be only a fourth of what was actually spent on lobbying that year, because the number does not include
money spent for grassroots organizing; coalition building; issue advertising on television, radio, and in the print media; and advocacy on the Internet, which do not fit the legal definition of lobbying.(p.27)
Lobbying is a mode of petitioning the government, and is constitutionally protected.  But as mentioned in previous posts here, the CED report points out that politicians increasingly give special tax breaks and favorable regulatory and government spending policies to wealthy donors who can afford to lobby Congress and can fund a pliable politician's electoral campaigns.  Studies carried out by the Sunlight Foundation found that corporations that had the resources to invest heavily in lobbying ended up paying significantly lower taxes than were paid by corporations that did not lobby.  Meanwhile, tax-, spending-, and regulatory policies increasingly worked to the disadvantage of businesses and groups that could not afford to lobby politicians and fund their election campaigns.  In this way large corporations have also injured upstart competitors. (CED, Crony Capitalism, p.6)

The CED report notes that some 50% of former senators and 40% of former representatives become paid lobbyists. (p.28)  To many observers, this adds to the impression that government is for sale.  Lucrative new lobbying jobs go to former politicians who thereby profit from their recent insider relation to government, and sell that insider relation to the highest bidder.  Further, when the retired congressperson gets hired as lobbyist, the job too often appears to amount to a payback from the lobbying firm, since the former politician, during his or her previous time in Congress, may sometimes have voted for the tax and regulatory policies the same lobbying firm requested.

Parts 1, 2, 3, and now 4 of the present series of blog posts have perhaps conveyed an inkling of how large the problem of crony capitalism is in the U.S.  Part 3 touched on, and the upcoming Part 5 will consider, how a social threefolding advocate might suggest reforms beyond those proposed in the CED Crony Capitalism report.  Part 5 will also suggest how readers themselves might take some action on behalf of social threefolding.


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