Turning the Economy Over to Politicians
President Obama insists that there be no earmarks in his $825 billion package of increased federal spending. But that won’t put an end to lobbying and political influence on how the money gets spent. And when politicians get to pick the winners, the economy loses.
Outrage over lobbying and corruption in Washington has spurred calls for campaign finance reform and played a role in the defeat of many Republican incumbents in the 2006 and 2008 elections. Yet the size of government keeps growing, which inevitably means more lobbying and more campaign spending.
We’re seeing this once again with the bailouts and the planned stimulus bill. The $700 billion Troubled Asset Relief Program (TARP), better known as the Wall Street bailout, was cooked up mostly in secret by the Treasury Department and the Federal Reserve Board. But the bill was no sooner proposed than lobbyists started flooding Capitol Hill and the Treasury to get a piece of it.