Michael Paese used to be chief of staff to House Financial Services Committee Chairman Barney Frank, until Paese became a lobbyist. When former Tom Daschle intimate Mark Patterson left Goldman Sachs’ lobby shop to become Tim Geithner’s chief of staff at Treasury, Paese took the helm at Goldman’s lobby shop. Continue reading ‘Government Ethics and the Revolving Door (cont’d), Crony Capitalism at Work’ »
When Obama ran for president in 2008, he promised to “close the revolving door” and clean up both ends of Pennsylvania Avenue, but that hasn’t happened. Which isn’t to say that it shouldn’t happen now. But I don’t think the usual ethics-rules approach is enough.
Crony capitalism is a bipartisan corruption, and another reason why we need a Revolving Door Tax (RDT).
In praising Congress’s huge new tax increase, President Obama said Tuesday that “millionaires and billionaires” will finally “pay their fair share.” That is, unless you are a Nascar track owner, a wind-energy company or the owners of StarKist Tuna, among many others who managed to get their taxes reduced in Congress’s New Year celebration.
There’s plenty to lament about the capital and income tax hikes, but the bill’s seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout, so allow us to shine a light on the merriment.
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The great joke here is that Washington pretends to want to pass “comprehensive tax reform,” even as each year it adds more tax giveaways that distort the tax code and keep tax rates higher than they have to be. Even as he praised the bill full of this stuff, Mr. Obama called Tuesday night for “further reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.”
One of Mr. Obama’s political gifts is that he can sound so plausible describing the opposite of his real intentions.
The costs of all this are far greater than the estimates conjured by the Joint Tax Committee. They include slower economic growth from misallocated capital, lower revenues for the Treasury and thus more pressure to raise rates on everyone, and greater public cynicism that government mainly serves the powerful.
The elephant in the room is the unconstitutional massive growth of the federal government. The power of the special interests grows as the federal government expands. The only way to eliminate their power is to drastically reduce the size of the federal state. Lobbyists never have a bad year. Three of the five richest counties in America border Washington, DC. There is a reason for this: It’s because our political classes have systematically arrogated themselves power and control beyond the worst nightmares of our founders.
“The rich makers are redistributed to the rich takers. That’s basically what Obamanomics is all about.”
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The problem today is not Congress and the administration taking money from you and giving it to shiftless lazy people who don’t work. The problem is Washington taking money from people who are creating value and redistributing it to companies that have the best lobbyist and the coziest connections to government.
