Pay-to-Play: Why the Fuss?

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[G]overnment, like a highwayman, says to a man: "Your money or your life."
~ Lysander Spooner

[T]he state is an inherently illegitimate institution of . . . organized . . . crime against the persons and properties of its subjects.
~ Murray Rothbard

The Washington establishment and its kept media are feigning outrage over the fact that the governor of Illinois has been selling political favors. So far, the biggest laugh line came from federal prosecutor Patrick Fitzgerald, who claimed that Abraham Lincoln would roll over in his grave if he were to know that an Illinois politician was selling political favors to the highest bidder. In reality, Lincoln would be rolling his eyes over the stupidity of such a statement. As Pulitzer prize-winning Lincoln biographer David Donald has noted, Lincoln’s aspiration as a young pol was to be "the DeWitt Clinton of Illinois." DeWitt Clinton was the governor of New York who is "credited" with having invented the spoils system.

By the time Lincoln ran for president, writes David Donald, he had become the master string puller in Illinois politics. He was what would today be called a "lobbyist" for the railroad corporations. In the late 1830s he led the effort to get the Illinois legislature to spend more than $10 million on "internal improvements" of roads and canals, none of which were ever finished; much of the money was stolen; and the taxpayers of Illinois were put deep into debt for many years. A Chicago politician is what we would call him today — a precursor of Mayor Daley and Congressman (and convicted felon) Danny Rostenkowski.

As president, one of Lincoln’s very first acts was to call Congress into a special session in June of 1861 to begin work on the Pacific Railroad Bill, which would eventually result in the greatest spectacle of graft and corruption in American history up to that point (the Credit Mobilier scandal). Lincoln benefitted personally from this legislation which gave him, the president, the right to choose the eastern starting point of the government-subsidized transcontinental railroad. He chose Council Bluffs, Iowa, where he had recently purchased a large parcel of real estate that is known to this day as "Lincoln’s hill." Many of Lincoln’s Republican Party luminaries, from Thaddeus Stevens to Justin Morrill and Oakes Ames, and even General Sherman, accumulated fortunes through graft and patronage that was created by Lincoln’s Pacific Railroad Bill (see my book, Lincoln Unmasked).

The even bigger absurdity of the establishment’s "outrage" over the behavior of the Illinois governor is highlighted by the fact that selling political favors defines what Washington politics (and all other politics in America) is all about. With the lone exception of Congressman Ron Paul, every Washington politician spends most of his time selling political favors of one kind or another. Legislation and regulation is "sold" for campaign "contributions," kickbacks, highly-paid jobs for relatives and friends, and various "in-kind" goodies. It’s what they do. It’s what politics is about. The governor of Illinois is not guilty of anything more than what almost every single politician in Washington does every single day.

Government has become so adept at selling political favors that scholarly treatises have been written about a veritable science of "political extortion." A case in point would be the book Money for Nothing: Politicians, Rent Extraction, and Political Extortion, by Fred S. McChesney (Harvard University Press, 1997). Much has been written about governments granting favors to businesses in return for "campaign contributions" or outright kickbacks, but McChesney focuses on an even more insidious phenomenon: politicians threatening to impose menacing costs on businesses or entire industries with regulation and taxation as "a form of political extortion or blackmail."

Political extortion or blackmail may take the form of threats of price controls, for example, or threats to withdraw occupational licenses, corporate charters or building permits. Or it can come in the form of threats to raise the cost of doing business through a special excise tax or an especially onerous regulation. The purpose of the threats, McChesney explains, is to solicit bribes (i.e. campaign contributions/kickbacks) from the threatened businesses or industries. Politicians even have their own language of political extortion and blackmail. McChesney quotes one pol as describing how, early in his career, he "came across the concept of u2018milker bills’." "Representative Sam, in need of campaign contributions, has a bill introduced which excites some constituency to urge Sam to work hard for its defeat (easily achieved), pouring funds into his campaign coffers and u2018forever’ endearing Sam to his constituency for his effectiveness."

"Cash cows" is another name for legislation that is threatened in order to "milk" campaign "contributions" from threatened industries and individuals. And then there are "juice bills" that are designed to "squeeze" cash out of threatened businesses. Not to be excluded from our political lexicon are "fetcher bills," designed for the same purpose — to "fetch" cash from corporate lobbyists with threatening legislation.

Among the examples of such political extortion cited by McChesney are:

  • Product liability legislation that is proposed periodically to fetch campaign cash from both sides of the debate.
  • Proposed legislation to restrict futures trading that fetches loads of cash from futures traders.
  • Proposed price controls on pharmaceuticals, which squeezed millions from the pharmaceutical industry.
  • Proposed price controls on cable television, which had the same effect.
  • Proposals to ban smoking altogether, or to impose even more onerous tobacco taxes, always fetches millions from the tobacco companies.
  • Proposals to increase excise taxes on alcoholic beverages are tried and true juicer bills.
  • Proposals to lower the legal blood alcohol content while driving always solicits millions from the alcoholic beverage industry.
  • Proposals to "tax the wealthy" more heavily and "make them pay their fare share" are classic examples of fetcher legislation.

In every case, once a sufficient amount of cash has been "extracted" from the threatened individuals, groups, and corporations, the menacing legislation is dropped. It is no different, in other words, from the underworld thugs who demand bribes in return for allowing a business to exist in "their" neighborhood, as portrayed in every movie about organized crime that has ever been made. Justice would require that several hundred members of the U.S. Congress (and the administration) be treated in exactly the same way that the governor of Illinois is being treated.

Thomas J. DiLorenzo [send him mail] is professor of economics at Loyola College in Maryland and the author of The Real Lincoln; Lincoln Unmasked: What You’re Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton’s Curse: How Jefferson’s Archenemy Betrayed the American Revolution — And What It Means for America Today.

Thomas DiLorenzo Archives at LRC

Thomas DiLorenzo Archives at Mises.org

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