How to Fix Politics By Adding More Money to the System

By Megan McArdle

Pascal-Emmanuel Gobry

In the New York Review of Books, Ezra Klein makes a convincing argument that the way lobbying has corrupted American democracy is not through money, or even indirectly via a "gift economy," as Harvard's Larry Lessig has argued, but rather because lobbyists provide legislators with a legislative subsidy.

If cash and lobbying bought votes, you'd expect a law like PPACA to have gotten some bipartisan approval, given that it was supported by major industry groups. Instead it was a party-line vote. Lobbying works not by swaying votes on the big-ticket issues, where politicians are more accountable to voters and their parties, but on the small-time issues that don't get public attention: Jack Abramoff's biggest job was getting tax breaks for Indian tribes, not exactly a page A1 issue. The way the legislative subsidy works is that on these host of smaller issues, lobbyists are a source of information, research and argument that simply isn't matched by the other side.

Writes Klein:

If someone walks up to you with a bag full of money and asks you to vote to make coal companies more profitable, that's not a very persuasive argument. Even if you take the money, you're going to feel dirty the next day. And most people don't like to feel dirty. But if one of your smartest, most persuasive friends, a friend you agree with on almost everything, is explaining to you that those environmentalist nuts are going too far again -- they're always doing that, aren't they? -- and they have sneakily tucked a provision into a bill that would make it more expensive for your constituents to buy electricity, that's very persuasive. And if it's also in your self-interest to listen to him -- and lobbyists are good at nothing if not making sure it is in a politician's long-term self-interest to listen to them -- then all your incentives are pointing in the same direction. You'll listen.

The expression "legislative subsidy" is excellent because it really shows how successful lobbyists hold legislators' hands and help them do their job. This seems very persuasive to me, because living in France, where campaign finance is highly regulated (since a string of corruption scandals in the 1980s), lobbying works very well, as I discovered (full disclosure) when I was in law school and active in politics and briefly worked as a lobbyist. Lobbyists equip politicians with tools to do their job, e.g. position papers, studies on complex topics, introductions to industry and sometimes even media folk, and often even drafted bills. Hence the legislative subsidy.

The other form of subsidy is of course the revolving door: legislative staffers are often poorly paid but highly intelligent and credentialed people, who would like to make money one day like the dumb fratboys they went to college with who are now at Goldman Sachs. And so the lure of lobbying beckons.

What to do about the legislative subsidy?

It seems to me that the obvious answer is to pay elected representatives and their staffs vast amounts of money.

Legislators crave the legislative subsidy simply because they don't have the staff to research whether proposed tax X would really kill eleventy zillion jobs. Legislative chiefs of staff are "owned" by Abramoff as soon as he tells them he has a job for them in several years because they're getting paid a pittance.

What if every member of Congress had a, say, $20 million staff-and-research budget? What if a congressional chief of staff made $1 million per year, and what if each congressman had an army of staffers to research policy and draft bills, as opposed to a skeleton staff? The legislative subsidy would just become irrelevant. Or at least, congresspeople would be on equal footing vis-à-vis well-funded lobbyists. And the cost would be a drop in the bucket compared to the federal budget -- and even less compared to the social and economic cost of carveouts and tax breaks.

This system could be abused: the budgets could become slush funds or patronage tools. Some rules (e.g., no spouses) can be drawn up, and maybe we could appoint an external auditor and some sort of review body made up of federal judges to punish abuses. Certainly the current system seems pretty rife with abuse, and if legislative subsidy really is the problem -- as I think it is -- this seems like a straightforward and effective solution.

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This article available online at:

http://www.theatlantic.com/politics/archive/2012/03/how-to-fix-politics-by-adding-more-money-to-the-system/254522/