Regulatory Racketeering
This blog was inspired after looking at this meme, from @AmericansAgainsttheRepublicanandDemocraticParties :
I've voted third party every election and have been moving further libertarian over time, and I do agree with most of this meme. I also agree with the message about the two parties, even if one has nicer rhetoric at times. However, I do disagree on exactly one line, and I bring it up in my blog because this line is repeated often, and represents a fundamental misunderstanding of the two parties. This line is:
Both parties are slaves to lobbyists
Having taken some training to be a lobbyists, getting to know some lobbyists, and also having a few candid conversations with politicians in a "safe" environment (where they stop lying), I have learned that this line is, at best, a half-truth. The "slave" relationship, in reality, can cut either way, and when it cuts from politician to lobbyist, the relationship could be called regulatory racketeering. In some cases, the people on both sides of the lobbying relationship are in fact "on the same team" in a revolving door relationship.
Regulatory Racketeering
Regulatory racketeering is an unfortunately legal "business model," which works in the following way:
1) A politician or regulator makes a new rule that is horrifically expensive to follow, or a set of contradictory rules that cannot both be followed.
2) This person will then either set the fines just low enough that they are a "cost of doing business," or offer to grant variances (loopholes) in exchange for money.
3) In egregious cases, politicians, police, and regulators work together to engage in selective enforcement, where an onerous law is enforced only on political enemies or people who refuse to pay for "protection" from regulators.
In this scenario, the lobbyist is not "buying" the regulator, but instead, the regulator closes the gate to free operation of business, and starts charging for access to operate. The lobbyist is more of a negotiator of what the price must be, and also a part of the "pay gate" as only fairly large businesses or business networks are able to afford to send a lobbyist.
Selective Enforcement
An excellent podcast on selective enforcement can be found on this Tom Woods episode, which covers the effects of New York's new minimum wage laws. It turns out that even when a law is on the books, it doesn't mean anything if it isn't enforced, and some regulatory agencies, as discussed in the podcast, are quite understaffed relative to the amount of laws they must enforce. This creates an environment where the regulator has to prioritize resources, while at the same tie there are so many laws, it is impossible to follow them all.
This creates an atmosphere that is ripe for corruption. An honest entrepreneur may look at the rules and decide it is impossible to keep them all, while a dishonest one will focus on making sure that he is never chosen by the regulator. On the government side, the opportunity for illicit gain attracts the kind of people who would like to seize that illicit gain. A relationship develops in which bribes are paid so that one's business is never "chosen" by the regulatory office, and those who do not pay, or worse, who start speaking out about the matter, suddenly see the regulators show up.
Revolving Doors
The revolving door is something I first caught on to when a particular Harvard president got in trouble for his comments about women. I was an active MGTOW at the time, so we all were sharing his story, but years later, I noticed his name popped up again, in which he was working at a bank, and then on Obama's cabinet. Its one of those observations that make you go hmm....
Of course, with some DuckDuckGo searches, you can find many examples of such people. Here's a particularly good one I found, as it covers both "left" and "right" examples:
In this case, since itis the same people on either side of the business/ government table, it makes you wonder if it is even productive to talk about a conflict between big government and big business. The people in either are incestuous to the point that the same people are in both. It might be more appropriate to say that there is a certain class of people that go into government, to make the rules. After this, they go into a favored business where they can earn the money that would be impossible to earn in government without causing a huge ruckus. Government, then, forms a part of the "non-rich" in this meme:
While the revolving-door image shows Washington and Wall Street, similar relationships can be found in the various "safety" organizations like the FDA and Big Pharma, and of course, military contracting and lobbying for war has been known since the time Smedley Butler wrote War is a Racket, and frankly for a much longer time before him.
What can be done?
"What can be done" depends heavily on your political persuasion, but there are two root issues to address:
1) When a small number of politicians or regulators can wield a large amount of power and make money from it, then corrupt people are necessarily attracted to such positions.
2) When there are too many laws to enforce, or regulators are given too large a task, the danger of selective enforcement is present.
For this reason, the only sensible solution, in my view, is to have few laws, which can be rigorously enforced by anyone. This means returning our focus to the very basic rights to life, liberty, and property, first and foremost self-ownership. It also means a rejection of the expert-managed society that creates the sorts of laws that lead to corruption.
The first step, therefore, would be to start educating yourself. I am writing The Plan for Action for this reason, because if you also want to see some change, it has to start with you, and it has to be something you can do, would like to do, and can deliver results. We're having a lot of great discussion about what that means, so please join in the comments.
But what if we just elect the right people?
I'm going to close this blog with a candid conversation I had with a politician, who completely changed my perspective on politics. He also exposed the one area where "the lobbyists" do have some outsized influence. Of course, it wasn't in the way he was hoping.
"In session, 80% of the bills we pass are unanimous, and 20% are split on party lines. Those 20% are worded to not do much, but sound like a big deal so that we can all go back to our districts and talk about how hard we fought for our constituents."
Years later, I understood what he meant when, after the "Healthy Hunger Free Kids Act" passed, the students where I taught at the time suddenly had much worse food, were hungrier, and fell asleep in class all the time. Never trust the title of a bill.
"Look, I have to make decisions about law enforcement, the environment, education, finance, agriculture, and whole host of other things. Even Einstein cannot intelligently make decisions about so many topics, he only knew physics! That's why we need academic and industry experts like yourselves to keep us informed."
I asked, "So... how do you know the experts are honest?" Remember the revolving door above - academia and industry are regularly in bed together.
He responds, "They're honest."
Feel free to light up the comments section :) Special thanks to @AmericansAgainsttheRepublicanandDemocraticParties for the great and inspiring meme!