The Dire State of the Lobbying Industry

If you are capable of summoning an ounce of sympathy for K Street lobbyists, this is the moment to do so. According to the Wall Street Journal, the number of active lobbyists declined by 2% in 2008, to 15,900.

Some portion of this decline should not come as a surprise. With charming understatement, the Journal notes that "Two financial-services lobbying titans, Fannie Mae and Freddie Mac, saw their lobbying offices disbanded by the federal government." (It does seem slightly redundant to lobby the federal government when you are the federal government, doesn't it?) But the Journal nonetheless assures readers that lobbyists "in every major sector" have seen cutbacks.

Still, there is good reason to fight back the tears over the state of lobbying, if you can.

First, there is simple math. According to BLS statistics, annualized non-farm employment fell by 2.75% between January 2008 and January 2009. (If you like large numbers, it fell from 138,080,000 to 134,419,000.) So lobbying firms seem to contract more slowly and less drastically than employment as a whole.

And that doesn't really seem surprising, does it? I don't know if anyone's has studied this in the United States, but it seems intuitively true that the desire for rent-seeking will increase when the marketplace becomes less certain. (And by definition, rent-seeking requires lobbyists.) If that's correct, then the number of lobbyists won't track national employment perfectly. The Journal says that last year's decline was the largest since the 2001 recession. But if you look closely at the Journal's graphic, you'll see that the number of lobbyists didn't decline in 2002 (when we were still in a recession) but did decline in 2000 (when we were not).wsj on lobbyists.jpg

It will be interesting to see whether the number of lobbyists continues to decline this year. Employment almost certainly will. But we've been told repeatedly that Obama's stimulus is just so much grist for the lobbying mill. (Or pick your metaphor: "The ever-increasing cost of the yet-to-be-seen stimulus is like chum in the water for lobbyists circling to snap up some taxpayer cash for their clients.")

Second, Obama has implicitly raised the cost of being an "active" lobbyist by refusing to hire any. I have the distinct feeling this will lead to a decrease in the number of people who call themselves lobbyists, but necessarily a decrease in the amount of actual activity that resembles lobbying. If Tom Daschle taught us anything, it's that you can just call yourself a consultant.