Monday, May 30, 2016

A Conservative Plan for Getting Money out of Government

I know that it is a lot of fun to imagine that one's political opponents are nothing but a bunch of villainous monsters - utterly lacking in both moral and intellectual virtues. However, in fact, there is a conservative plan for getting money out of government and some of it makes a lot more sense than what we hear from liberals.

The idea is to keep money out of government by keeping government small. Consequently, (1) there is nothing to buy, and (2) the influence of money is easier to notice and easier to control.

Here is the problem from a conservative perspective.

You set up an agency to regulate some industry . . . energy, medicine, prescription drugs, banking, insurance, law, transportation, education, whatever.

As soon as you do this, you create an incentive for the people in that industry to start to spend a great deal of money determining the nature of that regulation.

This influence takes a number of forms - and these forms show how the liberal plan of merely reducing political contributions is, at best, naive.

Of course, those seeking to control the regulation have the option to make direct political contributions to the candidates who support their industry.

This need not take the form of bribery and other forms of corruption. It's simply a matter of, "Candidate A says that he favors legislation that would create Regulation R, which will benefit our business by making it harder for others to enter the industry and compete against us," or similar effects. There is no "corruption" in contributing to help the politician whose promises align with your interests. Everybody does it. If you are contributing money to a politician who promises to do less to help others and more to help you - then you are engaged in the same practice.

However, we are going to assume that we will restrict this. Certain people with what we may call 'undesirable' political interests are going to be barred from directly contributing to the poltiical process. We will, in effect, pass laws requiring that they remain silent while we negotiate policies that have a direct impact on their welfare.

Those with the money still have a great many options at their disposal.

Here's an example. Unless you are an employee in the energy industry, or you work for the regulatory agencies, you have absolutely no idea what specific regulations have been enacted or how they are applied. You are completely in the dark. Consequently, you cannot protest those regulations or interpretations that conflict with your interests, nor can you lobby for regulations or interpretations that would be in your interest.

On the other hand, somebody in the regulated industry has an incentive to set up a set of offices and hire a staff whose job it is to know exactly what those regulations are. In fact, businesses have to do this - they cannot comply with regulations unless they know what they are.

(NOTE: This is actually one reason why businesses like regulations even though they protest against them. The cost of compliance - the cost of merely figuring out what the regulations are - is so great that it prevents others from coming along and entering the industry. Thus, it frees them from competition.)

Anyway, the relevant business has an office that knows what the regulations are.

Not only that, they have an incentive to establish relationships between their business and the people regulators. They are dealing with the regulators on a regular basis. This is more than enough opportunity to establish personal relationships. They know the regulations - their birthdays, their marital status, the status of their children, the charities that the regulator supports.

Do you even know the name of the Secretary of the Department of Energy? (NOTE: It's Dr. Ernest Moniz, but I had to look it up.)

In fact, if somebody leaves the Department of Energy (for example), these companies have an incentive to hire them. This is due substantially to the fact that they have personal relationships with people who are in the industry - people who are creating and interpreting the regulations.

There are two ways in which this business can influence regulation. One is by petitioning the regulatory agency itself. They can ask for decisions on how to decide this or that ambiguous case. Or, if they are held in violation of some regulation, they can send their experts in to appeal the decision. Of course, they have an incentive to invest a great deal of effort, and put top minds, into promoting the interpretation of the rule that best serves their interests.

Again, unless you are in a special position with respect to the energy industry or its regulations, or you have a very strange hobby, you do not even know that any of this is happening - and you are not paying anybody anything to represent your interests.

The second option is to introduce laws that will alter the regulations.

Here, too, note that most of these alterations enter into law through channels that are completely dark to you. This is not because you cannot see what they are doing if you looked. It is because it takes so much effort to look that, for virtually the whole population, it is not worth the effort.

Employees in the industry will write up the law and have a legislator introduce it as an amendment to some bill.

Remember, we are assuming that we have blocked direct contributions to politicians.

In many cases, large contributions will not be necessary. It will still be obvious that the business and its employees will favor the change, and the general public will never know what happened. The general public is, by necessity, too uninformed.

Independent of this, the business also has the resources they need to produce "research" that will establish the benefits of this law. This need not be a case of a legislator consciously abandoning the public interest in order to serve the interest of some industry. In many cases, this will involve a legislator trying to serve the public interest, but only being presented with one side of the argument regarding any particular decision. At the legislative hearings, the representatives of the industry, or the experts they fund, will show up with the relevant data, while those speaking on the other side will not be nearly so well funded.

Another avenue that the business has to promote these interests is to introduce these arguments into the press. They will keep a contact list of bloggers, pundits, sympathetic reporters, and writers who will repeat the research that they provide. They business will fund a think-tank whose purpose it will be to take this information and get it out into the public.

Please note we have assumed limits on direct contributions to politicians. Such a restriction will have a minimum impact on any of this. Direct contributions to politicians is a small fraction of the political industry that uses government power to direct wealth and power away from the masses who are substantially uninformed about what is going on and into the pockets of those within a particular regulated industry.

What is the conservative plan to reduce these impacts?

Quite simply. . . reduce regulation.

If regulations were few and simple, then there will be little use for massive expenditures that businesses put into manipulating this regulation.

Many of the regulations do not serve the public good anyway - they have been distorted and manipulated by those who are being regulated and who have the potential to realize substantial profits through this manipulation. Meanwhile, you and the other regular citizens you know are not even aware of what they are doing or the costs that they create.

Now, this battle cry of "reduce regulation" can go too far and in the wrong direction. After all, prohibitions on murder, theft, and the destruction of property are "regulations" - but not regulations that we would want to eliminate. Restrictions placed on a business that it cannot kill people or steal or destroy their property are not the types of regulations we have reason to do without.

Yet, in the current mess of massive regulatory confusion - bought and paid for by the industries being regulated - businesses have actually been successful in writing into the regulations legal immunity causing death or otherwise harming individuals and destroying the property of others. They sometimes obtain government aid in taking the property or wealth of others for their own use, directly or indirectly.

This leaves us with a regulatory system that, in many cases, does the opposite of what we would want a regulatory system to do - precisely because it is so large and so complex that it provides successful cover for such schemes. Reduce regulation, and limit it's impact to preventing businesses from killing, destroying the property of, or taking without consent the property of others, and this will reduce the power and influence of money in politics.

Just try to actually reduce regulations and focus those that remain on the legitimate objectives of a regulatory system and see who screams the loudest. It will be the industries who have spend years and countless dollars manipulating the regulatory environment to their benefit - the people with the money.

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