The standard narrative surrounding lobbying and campaign contributions is this: Companies' campaign contributions are effectively bribes, and corporate lobbying is how big business shapes the legislative agenda in their favor.

This is a huge overstatement, but kind of true. The real problem with this analysis is that it leaves out the other half of this dynamic: the shakedown by government.

K Street, you see, is not merely the lever by which business moves government — It is also the tool politicians use to extract wealth from business, for personal and political gain.

Muckraker Peter Schweizer -- out with a new book, Extortion -- hits on this in a New York Times op-ed:

Consider this: Of the thousands of bills introduced in Congress each year, only roughly 5 percent become law. Why do legislators bother proposing so many bills? What if many of those bills are written not to be passed but to pressure people into forking over cash?

Schweizer's article lists a few examples of such "milk bills," dinging House Speaker John Boehner and Vice President Joe Biden. I think Schweizer's assessment is accurate, and I would expand this discussion to include the role of lobbyists and the revolving door.

Politicians benefit when companies lobby, because they hire top aides to politicians (who then become fundraisers for the politician) and they also hire the politicians.

Companies who spend insufficiently on lobbying get harassed by politicians. See, for instance, Apple. Politico explained Apple's problems this way: "The company's attitude toward D.C. -- described by critics as ‘don't bother us' -- has left it without many inside-the-Beltway friends."

Now Apple has hired up a top Obama official.

Chuck Schumer, after Democrats gained the Senate in the 2006 elections, brought together a bunch of hedge-fund kingpins and told them, in effect, to lobby more. Then his top banking staffer quit and became a K Street lobbyist. Her firm soon brought on a huge chunk of the hedge fund industry. Then she became a fundraiser for Democrats.

I called it Schumer's Racket, but it's fairly common.

See Rep. Bill Delahunt telling the travel industry to lobby more, so they hired his chief of staff as their top lobbyist.

Richard Baker was the first congressman to propose federal regulations of hedge funds -- and then the first congressman hired as top lobbyist for the hedge fund industry.

Again, K Street isn't merely the tool by which business extracts wealth from government — it's also the tool by which politicians extract wealth from business.