Lobbying and Zero-Sum Interests

In my previous post, I said that the interests of large organizations, in this case the U.S. Chamber of Commerce, don’t align with those of most Americans. To any of you who just read that and said, “No shit,” yeah, I know, but there are people who aren’t necessarily persuaded by that statement.

So, an example: Thomas Frank’s excellent book The Wrecking Crew documents the age of Reagan in the ’80s, Jack Abramoff’s travails and the general ascent of the lobbying culture and industry in the nation’s capital. I couldn’t find the exact footnote in the book which relays this story, and I don’t remember the story exactly, but I looked for about 20 minutes and and couldn’t find it and that’s enough. You should read the entire book anyways, and if you do, you’ll see this story as a sidebar and know I’m not bullshitting you.

But on to the story. There was a coalition of large businesses, I don’t remember exactly which ones, that wanted to get a law changed. This was an issue with tech legislature and, if I remember correctly, Microsoft and Google were two of the interested parties, but that matters little to the tale’s overall point. So, the businesses did what any businesses do nowadays when they want a law changed: they got together a team of lobbyists, put aside a few million dollars and got a loophole inserted into the tax code. Lobbying for that loophole cost a few millions of dollars. With the benefit of the loophole, the companies saved several billions of dollars; that’s pretty good ROE. What’s my point? My point is that the money which the companies save either increases the deficit or needs to be replaced by someone else. Who’s someone else? You and me and all the other people who pay taxes. Obviously, taxation and economics as a whole are more complicated than this zero-sum construction, but in terms of the money that goes in and out of the federal coffers, this is pretty much how it works.

But what about all of that economic growth that these extra bucks for the corporations will create?

Mmmmmm… (graph via)

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