From the library: Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets, by Peter Schweizer

Last updated on: February 27, 2014 at 9:32 am by Jane the Actuary

From the library: Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets, by Peter Schweizer 2014-02-27T09:32:00-06:00 Jane the Actuary

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OK, so I’m going to write this summary by memory as I’ve now misplaced the book, but I would rather type this up than look for the book in the time I have before changing gears and starting work.

Here’s the basic premise of the book: people generally speak of the American campaign finance system as one in which corporations buy the votes of congressmen by funding their campaigns, whether directly or indirectly, via PACs, bundling of donations, etc. But it’s really the opposite: senators and congressmen collect donations even from recalcitrant executives.

There’s the concept of the “milker” bill, so named because it’s an opportunity to milk businesses for donations. Our esteemed legislators will “hold hostage” a bill on which there’s general consensus, refusing to move it out of committee and bring it to a vote, until the industries affected cough up enough cash. Even reasonable provisions, such as elements of tax law, are set to sunset every couple years simply to give congress recurring chances to demand more cash. Or they’ll propose a bill, which will unmistakably harm a specific industry, with no real intention of enacting it, but solely for the purpose of making the affected industry pay up in order to make it go away. The real prize is the “double-milker” which pits one industry against another; for instance, the SOPA act which would have imposed requirements on internet providers and search engines in the effort to contain internet piracy, was an opportunity for congressmen to collect piles of cash from both the entertainment industry, which was long used to sending money over to D.C., and the tech industry, which up to that point had wanted to stay out of the political donations game. To hear Schweizer tell it, congressmen didn’t hesitate to tell the tech industry that they had better start paying up.

Then there’s the regulatory game: congressmen and staffers intentionally write legislation which is so hideously complex that no one has any idea what it means. Then those same individuals “cash in” and go to work for consulting firms whch offer their services to the affected industries, offering to explain the regulatory requirements at $1,000 an hour. Dodd-Frank is the classic example here.

And what’s even worse, companies are basically being required to pay protection money. The top levels of the Justice Department are filled with Obama fundraisers, and there’s a clear connection between generous campaign donations and lenient treatment.

Now, the majority of the cash raised is going to fund the campaigns themselves — which, along with Gerrymandering, ensures that incumbents are nearly guaranteed re-election. It’s not for nothing that they’re called the Permanent Political Class. And, of course, upon leaving office, our elected officials face no shortage of ways to make money via lobbying, “consulting,” etc.

But beyond this, legislators can enrich themselves more directly in plenty of ways, too. They can lend money to their campaign and “earn” absurd rates of interest. They can employ family members as campaign staff. And via a “leadership PAC” — ostensibly a vehicle for sharing funds with other campaigns — they can claim all manner of expenses, chiefly vacations at luxury resorts.

Of course, I would expect that any given senator or representative would maintain a certain plausible deniabity with respect to milkers, and double-milkers. But you read a book like this and you start to question: is support for “immigration reform” a sincerly-held belief, or a means of collecting cash? How much cash are the players in the Keystone drama collecting as they repeatedly defer approval? The “USA Retirement Fund” bill I wrote about last week — a genuine effort to improve the fate of future retirees, or a venue for backroom dealing and a means to collect cash from everyone involved: traditional mutual funds and 401(k) funds, insurers (annuity providers), benefits outsourcing firms, associations of companies that don’t want even as modest as a payroll-deduction mandate? Or whenever there’s new pension funding legislation, or modifications and leniency, were the checks flowing in invisibly?

And in the meantime, the GOP arm of the Permanent Political Class is doing its best to marginalize the Tea Party.

Locally, in Illinois politics, back when Governor George Ryan was sent to jail for his actions as Secretary of State, collecting bribes from truck-driving hopefuls to get licenses despite being unqualified, Tribune John Kass labelled the corrupt ruling class, which extended across party lines, The Combine. (I did a google search and the most recent top hits were this Joe Walsh article at an Illinois-politics site and this post at a Tea Party site.)

So, look, I know none of this is surprising. Part of me wants to just call it a day and take up knitting. But do we have a democracy, or don’t we?

Consider the Ukraine. I keep meaning to pull up some of the recent history, but, look: the on-the-run (former) prime minister was democratically elected, then abused his power. For that matter, Putin was democratically elected and, so far as I recall, there were no accusations of vote-rigging, just control of the media and other ways of surpressing the opposition. Could we find ourselves in the same situation?

(Sorry for the morning grumpiness . . . this doesn’t quite fit with the center-right data-loving armchair economist/social scientist approach I’m trying to take in this blog, but this was a really unsettling book to read parallel with the events unfolding in the Ukraine.)

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