A Nation of Chumps and Suckers

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The purpose of government is to allow those who run it to plunder those who don’t. As the great H.L. Mencken sagely observed, "[I]f experience teaches us anything at all it teaches us this: that a good politician, under democracy, is quite as unthinkable as an honest burglar. His very existence, indeed, is a standing subversion of the public good in every rational sense. He is not one who serves the common weal; he is simply one who preys upon the commonwealth" (from "The Politician" in Prejudices: A Selection, edited by James T. Farrell).

Not that it’s necessary to document this ancient truth, but the November issue of Washingtonian magazine provides spectacular proof of it in the form of a cover story entitled "Washington in the Money: How Washington Got Really Rich — and How It’s Changing Us."

"In today’s Washington" making money, "and lots of it" is "a virtual certainty" for "some people," says the company town’s magazine. Exhibit A is former Republican Congressman Billy Tauzin of Louisiana. After serving as one of Newt Gingrich’s lieutenants, Tauzin "cashed out" by using his know-how of who to bribe and how by becoming a pharmaceutical industry lobbyist at $2.3 million a year.

In a hilarious understatement, the Washingtonian soberly announces that "jobs with the federal government have paid relatively well" for a long, long time. Yes, but "in recent years, big money wealth has become so commonplace" in Washington that "it’s no longer special." There are more than 55,000 homes in the D.C. area, for example, that are worth more than $1 million, including Republican Party honcho Senator Bill Frist’s $20 million mansion that is featured in the article. It pays to be a "public servant." Average house prices in much of "sleepy" Howard County, Maryland, near D.C., are in the $900,000 range.

All of this wealth is generated by what economists call "rent seeking." Plunder seeking is a better term. Among the administrators/perpetrators of Washington’s gargantuan wealth redistribution machine are 183,900 "everyday millionaires" whose net worth is between $2 million and $10 million; 24,887 "Rich But Don’t Know It" types who are worth between ten and fifty million; 7,200 "really rich" who are worth between a hundred and five-hundred million annually; and about 500 "tycoon rich" lobbyists, lawyers and rent seekers whose net worth is nearing a billion.

"How did Washington get so rich?, the Washingtonian innocently asks. Well, "federal spending continues to set new records, with Washington getting a greater share of the new dollars." Between 1980 and today, the government’s spending in Washington has escalated from $4 billion to $52 billion. "This gusher of government money is the chief catalyst for Washington’s increasing prosperity." Aha! Mystery solved!

The "good life" that is led by our rulers in Washington is quite pricey. The average "A-list" Washingtonian rent seeker spends about $90,000 a year on mortgage payments; over $24,000 on car payments; $50,000 on private-school tuition; $47,000 for a full-time, live-in nanny; and about $32,000 on a week’s vacation in Aspen and two weeks in the summer on Nantucket Island.

Many Washington area neighborhoods are described by the magazine as "streets of gold," where "houses go for anywhere from $3 million for a simple McMansion to $13 million for a 20,000 square-foot estate. "Senator-turned lobbyist" Don Nickles lives in one such estate, as does "former congressman" and now lobbyist Dave McCurdy. Because there are so many more mega-millionaire lobbyists than there were say, thirty years ago, all of this wealth derived from plunder makes everything "more democratic," says the Washingtonian. Ah, there’s that magic word. If it’s done it the name of our national religion, democracy, then it must be fine and good.

Not all plunderers live in the D.C. area, of course. Economists Richard Vedder and Lowell Galloway once documented that there is a substantial (20—40 percent) "income premium" in every state capitol compared to the average income in the rest of the state.

As Americans celebrated their democracy during the recent elections, which will not change how their government is run in any significant way, they proved once again that we have become a nation of chumps and suckers.

Thomas J. DiLorenzo [send him mail] professor of economics at Loyola College in Maryland and the author of The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War, (Three Rivers Press/Random House). His latest book is Lincoln Unmasked: What You’re Not Supposed To Know about Dishonest Abe (Crown Forum/Random House).

Thomas DiLorenzo Archives at LRC

Thomas DiLorenzo Archives at Mises.org

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