Increasing government power gives more influence to the politically connected, which is often whoever can hire up the most ex-Senators and cabinet members-turned lobbyists. That’s never Mom n Pop.
George Will’s latest column waxes eloquently on this theme. Here he lays out the principle:
Will’s column focusses on pensions and entitlements for the elderly. These transfers are not terribly mean-tested meaning that much federal wealth-transfer is upwards. But Will also hits on my favorite theme: corporate welfare:
The tax code, government’s favorite instrument for distributing wealth to favored factions, has been tweaked about 4,500 times in 10 years. Generally, the beneficiaries of these changes are interests sufficiently strong and sophisticated to practice rent-seeking.
Will mentions sugar subsidies, but he could have mentioned the ethanol mandate benefitting the likes of Archer Daniels Midland, or the Export-Import Bank benefitting the likes of Boing, or green loan guarantees subsidizing Solyndra, or nuclear loan guarantees benefitting Southern Company, or wind-mill tax credits benefitting the likes of General Electric, or tax credits and eminent domain benefitting developers, and I could go on….
But Will also makes an important point often overlooked:
Increasing government power, increasing the influence of lobbyists, increasing business dependence on government — all of these things benefit lawmakers in their efforts to win reelection and get rich. See, for instance, how Chuck Schumer uses regulation and the revolving door to bring in political money:
Or the congressmen who increase government influence over industry, thus giving industry more incentive to hire these lawmakers as their lobbyists. For instance, Bill Delahunt:
More specifically, Delahunt will provide “strategic counsel to firm clients on complex regulatory issues such as healthcare, financial services and energy and environmental matters.”
Of course, Delahunt was one of the people who made “healthcare, financial services, and energy and environmental matters” into “highly regulated business environments” by voting for and championing ObamaCare, Dodd-Frank, and dozens of other regulatory bills over his years in Congress. Delahunt made government bigger, and big government set the stage for his new lucrative job.
Delahunt’s new boss touts Delahunt’s “incomparable insight and connections at the busy intersection of business and politics.” And Delahunt helped expand that intersection by supporting regulations and subsidies.
And the staffers play the same game. The net effect of government growth, then, is enriching the wealthy and well-connected.
