Wednesday, October 26, 2011

Too Much Money in Politics? On the Outside or the Inside?

I'm largely unsympathetic to campaign finance reform because it's a form of price control and, as we know (rule #1), price controls cause shortages.  But it occurred to me that it's odd that the finance reform crowd only whines about how lobbyists use campaign money to scuttle policies that are good for the public at large in favor of those that are good for the lobbyists' clients.  Because this is merely money on the outside of the government that's used to get to the real money that's on the inside.

Lobbying is cost effective because, when successful, every dollar spent in lobbying is returned a hundred- or thousand-fold.  Once a client has burrowed through the thin outer skin of the government, it can feed in the ocean of tax dollars sloshing around on the inside.

So if you really want to do something about campaign money on the outside of the government, the first thing to do is to reduce the money inside the government.  If you want more government in the public interest, you have to stop making the government so attractive to private interests.

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