Dylan Matthews had a quintessential Wonkblog post yesterday, conclusively arguing through a series of charts that the newfound wealth of Washington, DC (whose metro area now has seven out of ten of the richest counties in the country) is not about the size of the federal government, nor the growth of contractors, nor our more-educated population. Instead, it’s all about influence peddling:
Each million dollars spent on lobbying is associated with a $3.70 increase in the D.C. wage premium. Correlation isn’t causation, obviously, but it seems improbable that the $1.7 billion increase in lobbying between 1998 and 2010 wouldn’t increase wages in the D.C. area. And though lobbying alone is not a huge industry, its growth most likely grew in concert with other influence-peddling activities. The rise of influence-peddling more broadly, more than just lobbying, is likely what’s driving this correlation.
The surprising result here is that all those great piles of money don’t seem to influence the actual outcomes all that much:
But why would businesses spend more on lobbying when there are fewer contracting dollars to go around, and no increase in the amount of regulation they want to fight? Because they’re in an arms race. That was the conclusion of University of North Carolina political scientist Frank Baumgartner and his coauthors in Lobbying and Policy Change: Who Wins, Who Loses, and Why. The book, the most expansive study of lobbying in the U.S. ever conducted, found that most of the time, nothing changes due to lobbying, not because it doesn’t matter but because effective lobbies on each side of a given issue fight each other to a draw.
This suggests that the coalescing liberal narrative around Citizens United and the rise of political money is somewhat mistaken. To exaggerate a little, it’s seen as a vast plot from the corpratist right, where a bunch of executives have been cackling evilly as they watch Congress have to wade through a hip-deep pool of hundred-dollar-bills just to take a vote. However, it seems at least partially true that businesses are locked in a lot of increasingly expensive and unpleasant zero-sum struggles. Give it a few more years of skyrocketing lobbying costs, and businesses may swing over to supporting limits on influence peddling out of sheer desperation.
I wouldn’t take this nearly as far as Matthews does. Lobbyists only fight each other to a draw insofar as there are two well-funded sides to every question. The way that I imagine ordinary citizens usually get shafted by this process is that with congressional gridlock and the price of influencing a congress critter rising fast, it increasingly takes major spending to get anything on the agenda. If you don’t have money or connections, you’re out of luck. Furthermore, there are many areas in which the monied classes are in broad agreement, or have completely overpowered the opposing side. Remember what happened during the negotiations over the cramdown proposal back in 2009?
…not only did the banks kill the cramdown proposal, they walked away with billions in extra bailout money for their trouble. And remember, this all happened in April of 2009, when the banking industry was at its absolute nadir. Isn’t America great?
An unrestrained rich lobby can basically write their own laws at this point. One hopes that even businesses can figure out that road leads nowhere pleasant.