The Lobbying-Industrial Complex Strikes Again

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According to a story featured in our Morning Reads, the American League of Lobbyists is changing its name to the more anodyne “Association of Government Relations Professionals.”

While lobbying may have a bad name, it remains a darn good investment, as a comprehensive report by The Washington Post on the explosion of wealth in the Washington, DC area reveals…

At a time when promising investments were hard to find, corporate America learned that lobbying was one of the most surefire ways of bolstering its bottom line…

Companies spent about $3.5 billion annually on lobbying at the end of the last decade, a nearly 90 percent increase from 1999 after adjusting for inflation, political scientist Lee Drutman notes in a forthcoming book, “The Business of America Is Lobbying.”

Why the dramatic leap? Most big companies long shied away from lobbying outside a narrow band of issues. That started to change in the mid-1990s. Under a pro-business Congress, which invited their participation in policy debates, industry groups won big victories such as permanent normal trade relations with China and the deregulation of telecommunications, Drutman said. Corporate executives saw how those victories made them money, and they shed their inhibitions about playing in the world of government…

The more companies spend on influence, the lower their effective tax rates and the higher their stock returns compared with competitors’, according to recent research. A company called Strategas has built an index to track the stock performance of the 50 companies that lobby the most; last year, that index outperformed the rest of the market by 30 percent.

The fact that this practice is perfectly legal doesn’t change the fact that it’s a prime example of government corruption.

In the United States, we tend to take this state of affairs as normal. We grumble about it, but assume that this is just how things work in a wealthy democracy. But as I wrote back in August, economists who study the relationship between political connections and corporate fortunes say that the value of ties between businesses and governments vary from country to country. In the UK, for example, a company’s political connections are worth very little. In Italy, those same kinds of connections yield windfall profits.

And, unfortunately, the research shows that we’re a lot closer to Italy than the UK.

Joshua Holland was a senior digital producer for BillMoyers.com and now writes for The Nation. He’s the author of The Fifteen Biggest Lies About the Economy (and Everything Else the Right Doesn’t Want You to Know about Taxes, Jobs and Corporate America) (Wiley: 2010), and host of Politics and Reality Radio. Follow him on Twitter.
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