Wednesday, May 06, 2009

Culture of Corruption

Jonah Goldberg has a stinging little article about some of the corruption occurring on the Democrats’ watch. He starts by giving a nod to some of the famed GOP crooks of recent years before launching into a hearty tirade about various dirty Dems.

Among other things, Goldberg discusses some shady dealings with respect to the current Chrysler debacle. (A tragedy in the making as described in this WSJ article by Holman W. Jenkins. One of Chrysler’s creditors describes in this NYTimes article how Obama administration officials tried to use hardball tactics to fleece his company in order to pay off political donors.)

Goldberg then writes, “If a Republican administration, staffed with cronies from Goldman Sachs and Citibank, were cutting special deals for its political allies ….” Whoa, he couldn’t be talking about the likes of Bush’s Treasury Secretary Hank Paulson, could he?

Finally, after ripping on Dems, Goldberg sounds a note of bipartisanship, writing that “political corruption is inevitable whenever you give hacks — of either party — too much discretion over public funds.”

And therein, my friends, lies the crux of the matter. Goldberg’s rant may seem a bit overly partisan to some. The fact is that when the government controls such a large slice of the economy, thuggish political opportunists will rise to take as much advantage as possible, regardless of which party of crooks is running the show.

The more money that is involved, the greater will be the corruption. This is human nature. More to the point, it is the nature of politicians. Americans by and large simply accept such sleaze as the way things happen to work in our system. Occasionally egregious underhandedness raises the public ire until it passes from the news cycle. And then the corruption cycle returns to normal.

This is one reason that some Americans favor limited government. The less government has its fingers in the economy, the less political corruption there will be.


Charles D said...

There is no question that corruption is a bipartisan affair. The reason, as you point out, is money - not the amount of money the government controls - but the amount of money that politicians need and get from special interests (mostly corporations looking for favors).

As long as political campaigns cost millions of dollars and that money is provided by wealthy individuals and corporations, we will have rampant corruption. Limiting the size of government is not going to help - primarily because the people who claim to want to limit government specifically exclude the most profitable areas for corporate interests - military and security spending.

If we want to curtail corruption and regain control over our government then we need to remove private money from the political process. Publicly funded campaigns, removing corporations from the political process, and ending lobbying would do the trick. Of course, the "limited government" crowd opposes all those steps preferring to turn over even more power to the same private interests that are responsible for the corruption.

Anonymous said...

You talk about the portion of the economic pie being controlled by government. I'm curious about your thoughts on the Bill proposed by Senator Hatch that would theoretically limit government spending to 20% of GDP. My gut reaction (besides wondering how he chose 20%) is that this limit would operate like a speed limit. Everyone knows how it is. 35mph does not mean "no more than 35mph" as it was intended to. Functionally it means "no less than 35mph but try not to go over 40mph if you can help it."

If by some miracle Orrin actually got this bill to pass it would mean that government spending would perpetually hover around 20% of GDP. If they came in 19% one year they would declare "mission accomplished" and then raise spending the next year - no thought for deficits or national-debt reduction. Just hit the target of 20%.

Anyway, I'd still like to hear your thoughts as you have more experience in financial matters than I do.

Jason The said...

KVNU's For the People: Quote of the Week

Cameron said...

David, 20% is about what the federal government has been spending since the 60's. (see page 2) The president's budget will significantly raise that number, so I suppose that's the reason for the bill. As to why it's always hovered around 20%, I don't know.

Scott Hinrichs said...

When so much power is at stake, there is no way to effectively reduce private money from campaigns. It's like trying to mandate that airplanes shall no longer be subject to the law of gravity. The only way to shrink the amount of corruption and money involved in campaigns is to reduce the amount of power rewards that are the spoils of winning a campaign. Passing laws to mandate public funding will only drive private funding underground and make it even less transparent than it is today. It will certainly not make it go away any more than McCain-Feingold did.

Every single spending limitation bill that has ever finally made it through committee has included an escape clause that could be invoked at great need. No bill like Hatch's would ever make it without such a clause. Well guess what? Great need always rears its ugly head.

In other words, spending limitation bills are for show only. You know, something to rally the troops back home. But they are essentially meaningless. Sorry for the cynicism, but that's reality.

Charles D said...

Wiping out corruption is always difficult because there is always a lot of money at stake. The decision is not about what approach is easier or more politically feasible, but what approach will actually work.

What we have learned is that piecemeal approaches that "reduce" the influence of money are inadequate. We must remove corporate money from the political process altogether if we are going to eliminate corruption. While I agree that this is a non-starter politically, I see no point in deluding ourselves that some other method will work.

The Constitution and the Founders never intended for corporations to have the same rights as individuals. They were organizations chartered by the states for specific business purposes, and states had no problem withdrawing charters in cases of malfeasance or criminality. The idea that a legal entity constituted for a business purpose should be able to spend its funds to influence the political process is dead wrong. If we eliminate corporate personhood, we will eliminate most corruption and return the government to the people.

This is not going to happen and as a result, we can count on this nation becoming less free, more indebted, and a worse place to live for our children.

Scott Hinrichs said...

It's not just corporate money, although, that is a problem. It is money that comes from every other source, including labor unions and PACs. These are no more pure than the corporations. Heck, even government entities have their ways of schmoozing politicians.

All of these money sources will continue to be there plying politicians with dollars (or other benefits) as long as the government continues to dole out money and/or power to these groups. The more of the economy the government controls, the more economic sense it makes for groups to apply to government for favors instead of working to improve and compete fairly. It is a simple question of incentives.

In the meantime, government has abdicated its role in ensuring fairness. This is indeed hardly what the Founders envisioned.

Charles D said...

When you look at the difference between the amount corporations and their PACs, bundled executive gifts, and lobbyists spend it makes the labor unions and citizen groups look like pikers. Unions are basically democratic groups (as democratic as our government at least) and I would support legislation that would restrict them from using dues to influence legislation, but if members voluntarily contribute I would not have a problem with that.

The only way we can restore fairness is to level the playing field by eliminating corporations from the political process so that all the players are individual citizens and their free associations.

Bradley Ross said...

DL, you wrote, "we need to remove private money from the political process."

How can we do that without interfering with freedom of speech? If we make a rule that says rich people can't put up billboards in favor of their preferred candidates/issues, are we not limiting their speech? Are you okay with that? If yes, how do you square that with the 1st amendment?