Thursday, April 17, 2008

Golden Rules & Revolutions: A Series - VI

April 17, 2008, 7:00 a.m.

Today is the sixth in a series, "Golden Rules & Revolutions." Here are the prior entries:

I - Income Disparity & Revolution
, April 12, 2008
. "Series Introduction," "Increasing income disparity, despair. . .," ". . . and Revolution"

II - Golden Rules & Fascism, April 13, 2008
. "The Golden Rule," "Fascism"

III - Money and Lobbyists in Politics: Washington, April 14, 2008

IV - Presidential Candidates and Lobbyists: McCain, April 15, 2008

V - Presidential Candidates and Lobbyists: Clinton, April 16, 2008

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Money and Lobbyists in Politics: Iowa

Part I of this series noted not just the gap in income between the rich and the poor, but the fact that this gap is continuing to grow ever wider, and that history -- as well as the daily news -- provides ample warning that this condition often produces revolution.

Part II began the exploration of the forces that may be shaping these potentially dangerous conditions -- including the ties between business and government eerily reminiscent of the early stages of what we used to call "fascism."

Part III took us to Washington for some general descriptions of how the system works, what campaign contributors get for their money, the role of lobbyists, and a columnist's description of one case study.

Part IV dealt with how the role of lobbyists extends beyond their manipulation of government into the pre-governing phase: presidential campaigns -- beginning with Senator John McCain.

Part V examines Senator Hillary Clinton's campaign from this perspective -- and tries to figure out who is the biggest "elitist."

Part VI returns to an application of the subject of Part II: "the ties between business and government eerily reminiscent of the early stages of what we used to call 'fascism.'" Although this time, instead of looking down the road to Washington for the consequences of "Money and Lobbyists in Politics" we take a shorter drive -- to Des Moines and Iowa City.

Part III began the discussion of "Money and Lobbyists in Politics" noting the "$2.79 billion that the special interests spend on lobbyists, and the the millions and billions of dollars the special interests 'invest' in 'campaign contributions'" -- primarily in Washington.

But it added, parenthetically, "in state legislatures as well as Congress, and among the best investments these businesses ever make."

Bear in mind, lobbyists don't head to Washington just because they like the restaurants -- though they do. They go for the same reason Willie Sutton once offered for why he robbed banks. "Because that's where the money is."

When the money is elsewhere they'll go there.

There are a couple of anecdotes from my personal experience that make the point.

Business leaders and their lobbyists sometimes say, "get the government off my back." But it's a little disingenuous. Because "regulation," often as not, comes about because of a request by business -- many times in an effort to use the power of government to limit competition, permit the growth of oligopolies and monopolies, and the resulting greater profits for companies -- and pay for the CEOs. Such was the case with some industries I've had experience with: airlines, broadcasting, cement, shipping, ship building, and steel -- among others.

(1) Cable Television. Consider the story of cable television regulation.

In the early days, when no one much understood or cared about cable, its regulation was left entirely to local communities. Local council members, who could know little of its future implications, or their potential bargaining power, could be easily bamboozled by "the cable guys" -- and they were.

If there was any resistance, the companies would simply offer ownership shares to leading local citizens (called "rent-a-citizen"), sell the community on the notion that this was now a "local" company, and then let their rented citizens sell back their shares at substantially increased prices, while all declared that these were simply "profits" not "bribes."

"Keep the government off our backs," cable cried to its friends in congress and the FCC.

Then the Ford Foundation created the Cable Television Information Office that began educating local communities about cable's potential -- and their bargaining power. Soon marketplace forces began to work their way; cities would see which companies would make the best offer: number of channels, 100% coverage of the city, local public access channels, and franchise fees.

Business representatives will give "free private enterprise" a standing ovation at Rotary, but panic at the prospect of its moving next door.

So the cable industry lobbyists left the cities in droves and came to Washington, pleading that we would please put the government on their backs, regulate the cable industry, and ameliorate the pain they were feeling from cities insisting they be given a fair deal.

Why Washington? Think about it. It's so much easier to work your will in one city than in 10,000. There were then only seven commissioners (now five), and a couple of congressional committees with any meaningful jurisdiction.

And so today cities have little or no ability to regulate what programs are carried on their cable systems, the rates charged by the companies, or whether their franchises will be renewed for lengthy terms.

(2) Tobacco. When Richard Remmington asked me to serve as his co-director of Iowa's Institute for Health, Behavior and Environmental Policy, one of our first tasks was to determine where we could get the biggest bang for our very limited bucks.

Smoking and other consequences of tobacco seemed a good place to focus. After all, as the Centers for Disease Control and Prevention note, "Cigarette smoking is the single most preventable cause of premature death in the United States. Each year, more than 400,000 Americans die from cigarette smoking." CDC, "Cigarette Smoking-Related Mortality" (September 2006).

This still left us with an analytical problem analogous to triage ("the process of sorting victims, as of a battle or disaster, to determine medical priority in order to increase the number of survivors"). Among all the aspects of smoking, all the strategies one could adopt to try to reduce it, which would be the most efficient and effective for a small group such as ours?

We finally settled on the matter of the 3000 "replacement smokers" the tobacco industry addicts each day -- given the industry's rather self-defeating challenge of being in a business where profit could only come by killing off one's customer base. What were the causes of, and most effective programs for reducing, young persons' taking up the habit?

Because I knew some of the folks in congress who might be of help, I paid them a visit on one of my trips to Washington. A top staffer explained to me that he would love to hold another hearing but for the reality that whenever he had done so in the past the power of the tobacco lobby was such that he never could get a majority of his committee's members to vote for any legislation opposed by the industry.

But he had helpful advice for me: "Nick, given the control the tobacco lobbyists seem to have over Washington, why don't you see what you can do with the states' legislatures."

So I started to investigate that possibility.

I discovered that the tobacco lobby already had 40 -- count them, 40 -- lobbyists working the Pennsylvania legislature alone. And things weren't much better in Iowa. The industry was beating us to the punch, anticipating our every move. Lobbying Washington, state legislatures, and city councils (when they couldn't get state legislatures to "preempt" cities imposing tougher regulation than those the lobbyists could get out of the legislatures).

Times have changed. Smoking isn't as "cool" as it once was for teens. More adults are aware of the health hazards. The tobacco companies have become conglomerates, with plenty of cash flow from other businesses to keep them going after they've killed off their customer base for tobacco and the "replacement smokers" have stopped coming in adequate numbers.

But do you recall that video of the seven tobacco companies' executives being sworn in
before a congressional committee 14 years ago, April 14, 1994, when they all -- having been sworn to tell the truth -- each denied in turn that nicotine was addictive? (The video; the transcript (about 1/3 down the screen).) [Credit:]

None of this progress has been thanks to the tobacco lobby, which opposed it every step of the way.

Lobbyists, like bank robbers, simply go "where the money is."

Yes, as Part II noted, "the ties between business and government are tight -- whether in the halls of Washington, Des Moines or the City Council chambers of Iowa City."

Which brings us to one of Bob Patton's editorial cartoons. Patton is one of our nation's most insightful and talented editorial cartoonists. (The link on his name takes you to his blog/Web site, Patton's Pad, and an archive of samples of his work that will "illustrate" the reasons for my judgment about him.) The Press-Citizen is lucky to have his impact on the paper's graphics generally, but especially its editorial page.

To introduce this cartoon and its relevance to our topic: The Iowa City City Council, which has seldom seen a TIF (tax forgiveness to for-profit enterprises) it didn't like, and is quite prepared to give taxpayers' public money to for-profit enterprises, passed an ordinance in response to pressure from downtown businesses that forbids individuals to ask for private funds if they are within a designated forbidden area around a business' entrance. Here's how Patton pointed up the contrast:

Bob Patton, "Brother, Can You Spare a TIF?" Iowa City Press-Citizen, March 22, 2008, p. A15, posted March 27, 2008, 4:28 p.m.

[If you have difficulty reading the text: The fellow who's down on his luck has a sign that reads, "Need Help. Any money you can spare? Thank you. God bless." The caption reads, "Panhandling around City Hall, however, will still be permitted," where we see "Big Biz" with a sign reading, "Need to set up shop. Any tax breaks you can spare. Thanks. Now shut up and step aside."]

Anatole France put the analogous thought, "The poor have to labour in the face of the majestic equality of the law, which forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

In short, as France and Patton see clearly, but most fear to even whisper, it is not just that in our infant fascism we rob poor taxpayers to further enrich the wealthy. It is the hypocrisy.

We cheer because "Stocks rallied Tuesday [March 11] as investors welcomed news that the Federal Reserve will lend up to $200 billion to banks and lenders as a means of loosening up tight credit markets." Alexandra Twin, "Dow's best day in 5-1/2 years; Stocks surge with the Dow soaring 417 points as investors cheer reports that the central bank is pumping an additional $200 billion into the banking system,", March 11, 2008, 4:34 p.m. ET.

Anyone who calls that "corporate welfare" is dismissed as fomenting "class warfare," a "liberal," a "radical" -- or worse.

And yet it's perfectly acceptable to chastise and cast moral aspersions on the single mothers who get, not $200 billion, but $200 in food stamps, as "welfare mothers."

If you'd like to know more about this political phenomenon, . . .

For my own explanation of a number of categories of reasons why TIFs and other business subsidies don't make any sense, see Nicholas Johnson, "Courage, Councilors," October 3, 2008.

For an entire Web site devoted to the abortive efforts to put public money (local, state, and a $50 million federal earmark from Senator Grassley) into an indoor rain forest in Iowa, see Nicholas Johnson, "Earthpark," 2004-2007, Jane Norman, "Grassley defends earmarks for Iowa as valid," Des Moines Register, April 7, 2008 ("Grassley has been harshly criticized in years past for his support of a $50 million earmark for . . . an indoor rain forest to Iowa. The money was yanked by Congress late last year. The nonpartisan group Citizens Against Government Waste issued a report Wednesday [April 2] showing that Iowa ranked 16th in the nation when it came to earmarks per capita in the 2008 budget . . .."), and "Earmarks" in Nicholas Johnson, "Obama Mason and Public Finance," March 21, 2008.

And for a positive analysis of what does work in economic development see, Nicholas Johnson, "Time to Learn From What Works," Iowa City Press-Citizen, January 20, 2006.
Parts VII and VIII will provide more examples of the problems of "Money and Lobbyists in Politics" right here in good old, Midwest-values Iowa.

P.S. For the best evaluation of last night's [April 16] debate, referenced in Part V, give a read to John Deeth's "Debate Screwed Up So Bad No One Can Play It," John Deeth Blog, April 17, 2008.

And here's what Senator Barack Obama had to say about it.

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Nick said...

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