Cyber thievery threatens our standard of living

A major concern behind this protest site is is grounded in the belief that the federal government is incapable of intelligently defending our standard of living. That concern has been raised here and elsewhere. Part of the perception comes from the profound differences of opinion between the two parties. They usually cannot agree on even basic things and that typically leads to a failure to act decisively or intelligently.

Don't invent it, steal it

Theft is a powerful tactic our economic competitors can use to gain economic advantage. In the face of the chaos and inaction in formulating American policy and the rise of the internet, our competitors can and do easily steal innovations needed to efficiently compete against us. In the past, it was industrial and military espionage doing damage on a small or modest scale. Now its cyber theft doing damage on a staggering scale.

Some analysts believe that cyber theft of American technology and other intellectual property, e.g., entertainment, could literally destroy the American economy (link to one analysis). While the U.S. federal government dithers and does little or nothing, other countries, particularly China and Russia, have got their act together and are executing a coordinated national policy. They are drilling into us and stealing and sabotaging the U.S. economy and military as fast as they possibly can. Unfortunately, our government is distracted and paralyzed by endless election cycle warfare.

More evidence of U.S. incompetence in defending itself is from the Wall Street Journal. The WSJ published an opinion by three experts on Friday, Jan. 27, 2012 (page A15; article online). These experts really ought to know what they are talking about, given their credentials. Their comments speak for themselves.

"Each of us has been speaking publicly for years about the ability of cyber terrorists to cripple our critical infrastructure, including financial networks and the power grid. Now this report [from the U.S. Office of the National Counterintelligence Executive - reports page] finally reveals what we couldn't say before: The threat of economic cyber espionage looms even more ominously."

"The report is a summation of the catastrophic impact cyber espionage could have on the U.S. economy and global competitiveness over the next decade. Evidence indicates that China intends to help build its economy by intellectual-property theft rather than by innovation and investment in research and development."

"Yet today's legislative framework severely restricts us from fully addressing domestic economic espionage. . . . . Congress and the administration must also create the means to actively force more information-sharing. While organizations (both in government and in the private sector) claim to share information, the opposite is usually the case, and this must be actively fixed."

In view of the rhetoric coming from the endless political election season, is what you hear from our politicians comforting or not? Are they focused on real issues, on political nonsense or something else? Did congress show competence or generate confidence when it tried to deal with an internet-related theft problem in the recent SOPA/PIPA incident? (Even Hitler didn't like SOPA)

We are in for some real economic and national security damage if congress and the executive branch aren't up to the job of defending us. We can't even estimate the extent of the theft according to the Counterintelligence Executive report (page 4):

"Estimates from academic literature on the losses from economic espionage range so widely as to be meaningless - from $2 billion per year to $400 billion or more a year - reflecting the scarcity of data and the variety of methods to calculate losses."

Given that, annual losses could be more than $400 billion/year. That's not trivial. It is fair to guess that annual losses are around $150 - $250 billion annually - also not trivial. It is reasonable to argue that our government and elected politicians they are not intelligently defending the American standard of living, despite their vociferous claims to contrary. Unfortunately, that self-serving defense is just empty politics as usual.

Taxes: Fair or not fair?

Complaints about whether something is fair or not usually doesn't hold much interest here. Fairness isn't in the constitution. Nothing has to be fair. Life isn't always fair. Politics isn't fair. Traffic tickets aren't always fair. Bullies aren't usually fair. That's just the way it is.

What really counts is what is legal and covered by a law that is enforced. Laws that are not enforced don't count for much. Laws that don't exist are irrelevant. Ethics is largely an empty concept in politics and many (but not all) businesses. What counts is what is legal, what isn't, how laws are passed, which laws are enforced and which aren't. That is what guides behavior for many, probably most, people with money and influence. For them, fairness is mostly irrelevant.

Iraq

Before the December 18, 2011 withdrawal

Occasional exceptions

But on occasion, something so amazingly unfair comes to light that it raises even Calmoderate's left eyebrow just a tiny bit. Often, the brief, subtle eyebrow quiver comes from amazing stories about U.S. tax laws. Lots of tax laws are ludicrous from an economic/social point of view and/or not enforced. Of course, there is a darn good reason for that. Enough people with enough money and power want it that way.

Pete Dominick (Sirius POTUS politics channel 124) aired an interview today with David Cay Johnston. Johnston is an investigative tax reporter with an amazing track record of revealing how profoundly corrupt U.S. tax law and congress really are. This fun little chat was no exception.

The tax cheat(s)

This tax cheat was a long-established practice that congress legalized years ago. Of course that made it perfectly legal tax avoidance, not tax evasion. Guess that makes it just an example of something that's not fair. Nonetheless, its a cheat and a darn good one. Johnston pointed out that the ~ 500 pages of tax return that Mitt Romney released showed that Romney used a loophole that allows executives (not others) of companies like Bain Capital to pass on a tax exempt cash flow to his kids.

Iraq - calibrating tank guns

May 2011

The fiction that corrupt congress passed and some inept president signed (presumably Clinton or Reagan) was that the owner of stock that pays dividends can be passed to others, e.g., the owner's kids or maybe his/her vindictive extramarital affair partner, the dividends but not the stock itself. According to Johnston*, Romney passed future dividends (not title to the stock itself) worth about $100 million as "carried interest" valued at $0 for gift tax purposes when the trust was set up. That zero value incurred zero taxes. 

* Johnston now works for Reuters and is someone trustworthy on tax issues.

Another issue Johnston mentioned in the Dominick interview was that Romney's company, Bain Capital, may have legally established "pass through" LLCs in its dealings with failing companies to avoid massive amounts of taxes in its operations. That may be unfair but not illegal. As pointed out here before, average Americans really don't have a good idea of how things work. I do not know the cost-benefit of what went on. More information is needed. Based on these facts, a fair and balanced guess would suggest that American taxpayers have been ripped off yet again. The benefit side of the balance sheet is really needed here to blow away the dense smoke that obscures the reality.

Of course, conservatives will defend it all. Liberals will condemn it. Good for them, but they are partisan spinners with no credibility. Getting at the truth of what really went on and what the cost-benefit analysis is will take some time. The usually feeble press is slow to get at things that offend powerful interests and advertisers. Maybe they can never get the job done.

Tan-Tan Morocco - M1A1 Abrams

U.S. marines do target practice 

with the Moroccan Air Force- May 2011

What wealthy special interests have paid for and bought from a failed, corrupt congress is something average Americans are going to pay for. In spades, for decades. Our standard of living is going to fall and there is nothing either political party has any idea of how to stop. They are co-opted and clueless, just like the mainstream press. If this view of reality, i..e, a corrupt, incompetent congress and press, is basically right, we are hosed. A really good economic recovery is about the only thing that can save us now. Congress can't and won't.

What are fair tax rates; Don't wait for the press to help you decide

Release of Romney's tax returns creates a good opportunity to ask fair and reasonable questions. His income is based on capital gains, stock dividends and interest, not a salary like most people. That kind of income is is subject to a 15% flat tax rate. Exactly what is the "best" tax rate for that kind of income? Why is that kind of income subject to a flat tax and not a progressive tax? Who decided on a flat tax for that kind of income? When did they decide that, i.e., have circumstances changed enough to make this something that needs to be revisited?

Flowers after a long harsh winter (nah, not really)

Alpine, California - February 2012

That's some of the context needed to reach an informed opinion about whether the 15% flat tax on non-salary income is good, bad or indifferent for the U.S. economy and the public interest in general. One thing is clear, that tax rate is very good for people who make money that way. Despite that, the question of how good, bad or neutral is it for everyone else remains unanswered.

The useless press

As usual, the mainstream press has elected to basically ignore the context needed for an informed decision on this issue. It is a reasonable guess that at least 80% of voters had little or no idea about this kind of income and had not thought much, or at all, about why things are the way they are. As is the case for most important issues, the press is basically useless in terms of informing the public.

The standard press story on this goes like this: "Romney made about $20 million in 2010 and paid about $3 million in taxes. It will be about the same for 2011. Regarding his taxes, Romney said: I paid 100% of my taxes. I know that the American people would not want a president who paid more than what they owed. Anyone who paid more would be a fool." That's one heck of a story. It says essentially nothing about anything. But, that's just our happy go lucky press. Out to lunch and loving it.

But while they are breathlessly telling us how much Romney makes per year, press thinking goes about like this: This story is really dull. It is not news because all of us in the press knew that Romney was rich, made his money form capital gains and the like and thus paid taxes at about a 15% rate. That's old news, but we spew it at the public again for the benefit of our ratings, er - wait, for the public's edification. Don't wanna be too cynical here - giggle.

Meanwhile, the public is left with almost no idea of what is really going on or why. The winners are clear but the losers, if any, are not. With that kind of feeble context, sound bites from spinning partisans ("its class warfare" or "its common sense to increase the tax rate", etc) actually sound like they might make sense because there is no context from which to evaluate anything anyone says about the situation.

Given their biases or beliefs, most members of the public will just probably decide about this in conformity to their beliefs. Most conservatives will dismiss calls to raise the 15% tax rate as class warfare. Most liberals will dismiss calls to leave the 15% tax rate alone as an unfair shifting of the overall tax burden to everyone who isn't rich. The problem is that there is no basis form which a rational, pragmatic, well-informed decision can be made. Not everyone who has significant capital gains or stock dividend income is rich.

None of the foregoing is a criticism of the 15% flat tax on capital gains. I (and most all of us regualr people) have insufficient information to come to a decision that a 15% flat tax is any better or worse than a progressive tax of some sort. That's not my fault. One cannot trust the spinners on the left or the right. The mainstream press is pretty much useless. Therefore, to come to an informed opinion, people need to do the research themselves. Most people simply will not do that for whatever reasons.

Despite the criticism of the mainstream press, there are some good press sources that do a better job of informing the public. For example, the Wall Street Journal ran an article today (Wed. Jan. 25, 2012, page A6; online version here) that added information to the standard empty press blither about Romney's tax situation, e.g., (i) Romney's charitable and state/local tax deductions were significant (about $2.5 million) and (ii) the effects of income on charitable giving despite high incomes is unclear (the data conflicts). But how many people use those 'better' sources compared to reliance on standard mainstream press blither? Probably not many.

Even the better sources aren't good enough to focus on providing the information needed to answer the key questions. The public still has to pick and collate the information from disparate sources, some of whom are unbiased and reliable and many of whom are not. Very vew people have the time and/or interest to do that. What we are left with is a whole lot of strongly held, but uninformed opnions. For the most part, public discourse stays mired in spin and propaganda. No wonder politics as usual has failed.

Lessons from a political battle

Is there anything of value to be learned from congress' recent actions related to the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA)? There are important lessons, depending of course, on who and what you choose to believe.

The context

Hollywood and its lobbyists were pushing hard for passage of SOPA and PIPA. A large amount of money is at stake. According to one estimate, the entertainment industry alone loses about $50 billion per year to online piracy (theft). Opponents of SOPA and PIPA had argued without success that the bills were too draconian because they would (i) unduly limit free speech on the internet and (ii) cripple websites like Wikipedia and YouTube.

U.S. Army Sgt. Crystal Cornejo et al. on presence patrol

Kabul Afghanistan - February 2012 

After large protests led by Wikipedia, Rise of the Center and other websites, House Judiciary Committee Chairman Lamar Smith said his committee postponed consideration of SOPA "until there is wider agreement on a solution." Senate leader Harry Reid, D-NV, said, "There is no reason that the legitimate issues raised by many about this bill cannot be resolved. Reid asked PIPA's author, Sen. Patrick Leahy, D-VT, to continue working with stakeholders on the bill "to forge a balance between protecting Americans' intellectual property, and maintaining openness and innovation on the Internet."

Smith also said, "I have heard from the critics and I take seriously their concerns regarding proposed legislation to address the problem of online piracy. It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products." Darrell Issa, R-CA, who is working on his own alternate online piracy bill said, "Supporters of the Internet deserve credit for pressing advocates of SOPA and PIPA to back away from an effort to ram through controversial legislation," Issa said. "Over the last two months, the intense popular effort to stop SOPA and PIPA has defeated an effort that once looked unstoppable but lacked a fundamental understanding of how Internet technologies work.

F/A-18C Hornet takeoff from USS Carl Vinson

Arabian Gulf - February 22, 2012

The lessons

Lessons number 1 & 2: If Issa's assertion that the SOPA and PIPA legislation lacked a fundamental understanding of how the internet works, then congress is arguably incompetent to know when legislation that lobbyists bought and paid for is good, bad or indifferent. If Issa's assertion is incorrect, then why did congress stop progress on implementing SOPA and PIPA? That implies that congress stopped because too many people complained after the internet protests. Either way, congress screwed up. One the one hand, lobbyists backed by mountains of money were going to get what they had bought until the public got irate and complained. One lesson is that lobbyists backed by a lot of money can and will try to buy most or all of what they want from congress. Another is that congress very likely is incompetent and cannot assess on its own what makes sense for the public interest and what doesn't.

Lesson number 3: If Reid's comment that the public protests against SOPA and PIPA did in fact raise "legitimate issues", then why weren't those issues addressed in the first place? If Smith's comments that he takes concerns of SOPA and PIPA opponents seriously and needs to "revisit the approach", then what changed his opinion? Why did it take a massive outpouring of public protest to get congress' attention? The lesson here is that lesson 1 & 2 above are basically true and correct.

Army firefight with Taliban

Kunar province, Afghanistan - March 2011

Lesson number 4: This is a hard one to take, but someone has to say it. To force congress to reconsider SOPA and PIPA, it took an unusual and rare effort to get enough public attention for opponent's complaints to be taken seriously. But in the long run, the public will not be able to defend itself nearly as well. Special interest money behind all kinds of legislation won't go away. Not ever. The public can't rise up and complain like this every day, which is what it would take to bludgeon congress into fairly considering public concerns.

It may be the case that for now, the public interest will be at least partially vindicated on the issue of dealing with online theft of intellectual property. It is arguable that what happened before the public rose up and complained, congress was simply conducting business as usual, i.e., it was serving special interests regardless of adverse impacts on the public interest. The lesson is that congress generally serves special interests with money before it serves the public interest. This is just another garden variety example of the corruption of congress by special interest money.

What is real and what is spin?

Or, do those lessons misrepresent reality? Did everything work fine up until the day the public complained? Were public complaints a mistake of some sort? Is the public wrong? Some people in congress think the public is full of baloney on this issue. For example, Senator Leahy criticized the senate for stopping progress on the legislation calling it a "knee-jerk reaction to a monumental problem." Maybe the problem is monumental, but does that necessarily mean that legislation to address the problem has to serve special interests without regard to public complaints? Leahy obviously thinks so.

U.S. Marine feeding Mac

Helmand province, Afghanistan - April 2011

Do you hear that public? You are full of baloney. Sit down and be quiet so the heroic senate can do its work in peace. Is Leahy's version of reality the real situation, are lessons (opinions) expressed here the reality or is it something else entirely? Is special interest money irrelevant in this matter? Look at what people in congress said in public and what the public had to overcome to get their attention. Think about it a bit and then decide.


And, while you are thinking and deciding, consider why on Earth congress did not act until the level of theft got to $50 billion/year. Was the level of intellectual property theft zero in 2010 and $50 billion in 2011? Of course not. Not by a long shot. Reaching that level took years and years. Where was our selfless, stalwart congress before then? Waiting for Hollywood's cash payments before their majesties, e.g. the imperial Leahy, deigned to take the matter up?


Congress isn't just broken. Corruption and incompetence are the real descriptors. Democrats and Republicans in congress can't defend our standard of living (something complained of here before). One can argue and defend the proposition that congress serves whoever pays them enough, even if that means they betray our standard of living.

Its time to debate the merits of capitalism - and government

Republican candidate Romney criticizes president Obama and some other people as putting capitalism on trial for questioning what Bain Capital did or did not do. In politics, irrational thinking like that reveals how shallow and empty contemporary American political "debate" is. What passes for routine discourse from hard core democrats and republicans is mostly partisan spin and propaganda without much or any logic and fact to support the drivel. The spin machines on both sides are running in high gear.

'Christening' of the Fort Worth - littoral combat ship

Wisconsin - December 2010

There is nothing wrong with questioning capitalism and its strengths and weaknesses. That exercise is called free political speech. Conservatives revel in putting their mortal enemy, i.e., the U.S. government, on trial all the time. They do that to expose all sorts of evils, real and spun (imaginary). But for good reasons they will never explain, maybe because there are none, conservatives don't want anyone asking serious questions about their sacred cow, capitalism. That's the basically same kind of political hypocrisy we got when people who honestly questioned America's entry into the Iraq war were dismissed as traitors.

The reason Romney and most conservatives don't want a real inquiry into their pristine and perfect capitalism is that they know it's got some real nasty warts on it. There were very good reasons that antitrust laws were passed in the U.S. way back in 1890. Businesses fought against it, but they lost. Unrestrained capitalism is usually ruthless, heartless and typically has little or no concern for issues like the environment. Anything that stands in the way of maximum profits tends to get little or no consideration. Government is there to defend those interests, not capitalism. None of that is a criticism. Those things are just statements of fact. Conservatives would never admit any of this reality, so they spin or flat out deny needed to fit "reality" into their sacred ideology.

Japanese SH-60K landing on amphibious dock landing ship

USS Tortuga - Philippine Sea - December 2010

Common sense says that if capitalism was perfect and pure as its supporters would have us believe, they would have absolutely nothing to be concerned about from a fair, even-handed assessment of its pros and cons. Unfortunately, that's the rub. If the inquiry comes from the left, the inquiry won't be fair or even-handed. The same would true if the inquiry comes from the right. Hard core conservatives won't recognize any flaws in capitalism no matter how obvious any more than hard core liberals could fairly recognize obvious strengths.

And, while things are being put on trial, government itself should be reassessed in a fair and even-handed manner. Of course, that too is impossible if the reassessing comes from the hard core left and/or right, i.e., the politicians and parties in power today. What's missing in politics is a transparent, honest, pragmatic assessment that is unpolluted by the ever-present poisons of (i) political ideology, (ii) special interest money and (iii) political self-interest. It is profoundly unfortunate that a clean, intelligent debate on these issues is something we are not going to get despite the urgent and obvious need. As usual, politics as usual is going to keep average Americans in the dark and feed them something having a rather unpleasant smell and taste.

Special interest money in politics cannot be justified

Post #161 - Money and politicians; In defense of lobbyists?

February 2010

Introduction

An earlier post criticized Congress as inept and corrupt "protectors" of the public interest in the context of consumer credit and credit card law. The criticism was primarily based on Congress' own admissions that it failed to protect the public interest and that lobbyist influence played a major role in the failure.

Admissions by powerful  U.S. Senators that they failed were made public in a Frontline (affiliated with PBS) investigative news broadcast that first aired in November of 2009. At 12:50 - 13:55 in the broadcast, Christopher Dodd, chairman of the Senate Banking Committee, publicly admitted that the ideology of Congress (and regulators) was that free unregulated markets would protect the public interest. He admitted that over time that ideology turned out to be false. The unregulated free market in this area was excessively brutal.

U.S. - Japan joint training exercise

Philippine Sea - December 2010

In post 160, the Pragmatic Caucus (PC) did not criticize the role of lobbyists in the failure of Congress to protect the public. What lobbyists and their associated campaign contributions do to the democratic process is perfectly legal. Lobbyists use money to influence lawmakers. American laws allow that. Nonetheless, the PC sees special interest campaign contributions primarily as legalized bribery.

This post describes arguments that have been raised in defense of lobbyists to absolve them of bad influences they are sometimes alleged to exert. The PC sees lobbyists and their special interest money as a significant net drain on society. What money buys is more corruption and inefficiency than honesty and efficiency.

For this post, question is this: How believable are the defenses of lobbyists and, in particular, the role of their money in politics?

In defense of lobbyists

A Google search of the phrase "in defense of lobbyists" got about 840,000 hits. That was too many. Limiting the search to posts in the last year got 17 hits. That was too few. Anyway, the PC eventually spotted several fundamentally different arguments floating around in cyberspace in defense of lobbyists. There was no defense of special interest money in politics, so this has to be limited to defenses of lobbyists and how they operate.


Defense #1 - It's free speech and if you don't hire lobbyists, the government may unfairly whack you: One popular defense for lobbyists is that you can't muzzle them because whatever they say to politicians and anyone else in government is protected free speech (argued by Michael Barone in the U.S. News and World Report). Others, like the Wall Street Journal have made the same point.

Mr. Barone also said: "The high-tech industry figured it could get along without much representation in Washington until Microsoft got slapped with an antitrust suit a decade ago. Now it hires lobbyists in droves."

The PC concedes that the free speech argument is true. However, the argument is beside the point. It ignores the question of whether or not lobbyists and their special interest money does more harm than good. Just because what they do is legal does not make it necessarily a good thing. If you disagree just consider these two things for a moment. First, abortion is legal in the U.S. Is that good or bad? Second, same-sex marriage is illegal in most states. Is that good or bad? Intentionally loaded questions like these could go on. As the PC sees it, just because something is legal (or illegal) does not mean it is a net good or bad thing for America or Americans.

 
Getting back to the point, the question is whether, despite being legal, does arguing a free speech defense for lobbyists necessarily mean they are more good than bad? Does that justify the money? For the PC, that defense fails to justify why it is that their money is needed if all they want to do is simply talk to people in government. The PC has no quarrel with lobbyists talking to government so long as money is not involved. In any event, the defense ignores consideration of whether lobbyist activities are, on balance, more good than bad.

USAF C-130 Hercules

Supplying forward operating base Sweeny

Zabul province, Afghanistan - February 2011

Mr. Barone's point about needing lobbyists to protect an industry from regulation or lawsuits is disturbing. It again points to the power of money to buy "justice". It is apparent that from Mr. Barone's point of view, Microsoft should never have been sued for antitrust violations and having lobbyists would have prevented such a  frivolous lawsuit. But, what if it was the case that Microsoft really and truly did (and still does) violate antitrust laws? Would lobbyists have been able to stop legitimate law enforcement? Probably.

And, if lobbyists really are needed to prevent improper government action as Mr. Barone says, then the American public was somehow* fooled into voting for politicians in that bad government. That leaves heroic and selfless lobbyists to stand as a bulwark against dumb American voters in defense of their altruistic special interests. Does anyone buy that? The PC doesn't buy it because it is rubbish. Voters vote for who they are convinced to vote for and/or believe in.

* Could that have been at least partly due to political spin or political advertisements the lobbyists and partisans buy to deceive and distract the public? As the PC argued in post 123, post 125 and elsewhere, lobbyists and partisans are masters of spin and deception.

One thing that is certain, lobbyists are usually highly motivated. As Mr. Barone points out: "But even lobbyists for nonprofits have a monetary motive, i.e., keeping their (often six-figure) salaries flowing in." That seems to jive with at least some lobbyist salary figures. It doesn't get much clearer than that, does it?

Because it is largely irrelevant, defense #1 fails to convince the PC that lobbyists confer a net benefit over the costs. It ignores the role of money in politics. Mr. Barone's arguments reinforce the PC's suspicion that, on balance, lobbyists operating under the system we now have are a significant detriment to American law and society.

Defense #2 - Lobbyists make Democracy work better: Another argument is that lobbyists "toil in the public interest" to make Democracy work better and to help many Americans exercise their constitutional right outlined in the First Amendment to "petition the government."

It is true that spending money is protected free speech and recently* spending money became a whole lot more protected than it was last month. It is also true that some lobbyists advocate about "pure social" issues, e.g., for or against abortion, and not directly to make money for a business or labor union interest.

Navy E-2C Hawkeye landing on U.S. carrier

Pacific Ocean - February 2011

* See the January 21, 2010 Citizens United v. FEC, Supreme Court decision. 

The question then becomes this: Does the allegedly net good that pure social lobbyists create offset the the PC's perceived net negative that the money lobbyists create? That is a hard call because your definition of benefit flowing from laws around a social issue will vary with your personal beliefs. Just consider abortion once again.

Hypothetically speaking, if lobbyists contributed huge amounts of cash to people in Congress and that got abortion to be made illegal, would that be more good than bad? How do you put a positive or negative value on something like that?

On the other hand, one can estimate the economic effects of lobbyists playing with money in a largely business context. For example, in post 155, the PC complained about losses to the U.S. treasury. Loses due to tax evasion and cheat schemes are huge. Most of that is bought and paid for by the special interests buying  tax breaks from Congress. A recent speech by North Dakota Senator Kent Conrad (Democrat) estimated that such tax losses cost the U.S. treasury more than $100 billion per year. That is a lot of money and it seems to more than trump whatever good comes from the purely social advocates.

The PC sees this argument as showing that lobbyists can do both good and harm. In PC opinion, the scale tips against lobbyists when they accompany their efforts to influence government with campaign contributions. There is no way to distinguish honest government from government bought by special interest money. And, the amounts of money on the special interest side dwarfs the good on the social interest side when unaccompanied by cash contributions.

Of all the defenses for lobbyists the PC came across, this one has the most persuasive weight. Not all lobbyists are working against the public interest, and that mitigates for some social benefit flowing from some lobbyists at least some of the time.

Defense #3 - Lobbyists merely reflect Americans and their values; We all form into groups to better allow our interests to better compete for scarce resources and even the founding fathers knew that and blessed it: A blog post at something called The Daily Beast by Andrew Keen defended lobbyists. According to the post, Mr. Keen's credentials include (1) writing the "controversial" book Cult of the Amateur, (2) being the "Anti-Christ of Silicon Valley" and (3) being the most hated person on the internet. Interesting credentials. Mr. Keen made three points or arguments in his defense of lobbyists.  

Argument 1: According to Mr. Keen (quoting Hillary Clinton), lobbyists are good for America because “A lot of those lobbyists, whether you like it or not, represent real Americans. They actually do. They represent nurses. They represent, you know, social workers. Yes, they represent corporations that employ a lot of people.”

Argument 2: Mr. Keen also asserted that lobbyists are good and necessary because: "Small has become the new big in the United States, where the cult of the honest small donor has become the latest comfortable illusion of the ruling class. This wild swing against lobbyists is not only bad news for corporations seeking to influence public policy, but also it doesn’t augur well for the future of representative democracy. As the father of American horse-trading democracy, James Madison, argued in Federalist Paper #50, the truth is that we all form into factions of one kind or another, and thus the small donor is just as self-interested as the large corporation. “If men were angels,” Madison reminds us, “no government would be necessary.”"

Argument 3: Finally, Mr. Keen argued this: "Americans should unashamedly cherish the value of a political system specifically designed to balance the competing interests of many rival corporations, lobbyists, and PACs. So, on January 20, I urge my fellow citizen to spare a thought for the lonely K Street crowd. Such selflessness will only add to our common values, our shared aspirations, and our commitment to addressing our challenges as one, united nation."

Navy C-130 Hercules

Engine maintenance - North Carolina - February 2011

As an initial matter, the PC observes that Mr. Keen ignores the role of money in lobbyist activities. That omission undercuts all of his arguments, unless his comment about "horse-trading democracy" means that political corruption is OK. If that is his argument, he should have just come out and directly said it.

Regarding argument 1 by Mr. Keen, the PC and everyone else knows that lobbyists represent whoever pays them. The whole point of advocacy in politics is to represent some interest or another. And, of course, corporations who employ lots of people will tend to hire lobbyists. If nothing else, they can afford to hire lobbyists and make campaign contributions. What Mr. Keen's argument 1 side-steps is whether those corporate contributions really do buy (1) net benefits for all of the employees in the industry and (2) net benefits for America and Americans as a whole.

Just consider the Frontline story about the credit card and financial services industry. Some of the arguments against lobbyists in this post are based on that story. Specifically, lobbyists and money advocating for the financial services industry helped buy and maintain essentially complete deregulation until recently. The ultimate upshot was massive damage to the economy and unnecessary human suffering. That damage was counterbalanced by massive profits flowing to the people at the top of the industry. Was it worth it? Did America see a net benefit or a net detriment?

So, exactly who were those lobbyists primarily working for? The financial services industry and all of its employees, its customers or the people at the top of that industry? Think about it. When a corporation lobbies Congress using money and lobbyists to get laws passed to make it harder (or impossible) for labor to unionize, is that for the Corporation's and employee's benefit? When lobbyists and wealthy individual and corporate special interests buys from Congress an ability to engage in tax evasion on a massive scale with minimal liability and essentially no chance to get caught, whose interests are those lobbyists serving? When a corporation lobbies Congress using money and lobbyists to get laws passed to repeal environmental protection laws, whose interests are those lobbyists serving - all of the little people? These questions can go on and on.

Regarding argument 2 by Mr. Keen, the PC is unsure of what he means by a "cult of the honest small donor" and how that affects anything. Just because there are lots of individual small donors coming online in politics, the PC fails to see how that changes anything. As the PC sees this, regardless of which party is in power, the big guys with the big cash are the ones that get big "access" and valuable votes. Lobbyists are generally equal opportunity influence peddlers. They are perfectly happy to work with Democrats or Republicans, particularly when the issue is primarily money. On individual social issues, maybe there is some bias to one party or the other.

In any event, the PC is willing to bet that an individual who contributed $150 to President Obama's presidential campaign in 2008 is not going to get either a half-hour meeting with the President or a law passed by Congress to make his neighbor cut down a tree that is blocking his view. But, some lobbyist backed by $25 million in campaign contributions just might get a meeting and/or a law for his employer.

Mr. Keen points out Madison's observation, “If men were angels, no government would be necessary.” That says it all doesn't it? There is nothing complicated about it. Lobbyists are men (and women) and men are not angels. Lobbyists, who are not angels, serve their masters and their masters are not angels.

U.S. Navy submarine tender USS Frank Cable

50 caliber gun training - Philippine Sea - January 2011

The only thing even close to angels on the side of America and the public interest are our elected political leaders. If they become corrupted by special interest money, then they will often (not always) serve the special interest at the expense of the greater good. Or, is Mr. Keen arguing that once someone gets elected to Congress they become an angel? Remember, people in Congress do not even allow themselves to be subject to insider trading laws and they do make inside stock/securities trades for personal benefit. Is that angelic? Hardly.

Finally, the PC takes issue with Mr. Keen's assertion in argument 3, that "Americans should unashamedly cherish the value of a political system specifically designed to balance the competing interests of many rival corporations." That argument is bogus. It is based on the false premise that political system specifically designed to balance the competing interests. The political system we now have is designed to benefit players who pay to play. The more you pay, the more you play. Not all corporations and special interests can afford that. In fact, most can't even get in the door.

One of the PC's complaints about politics is the capacity of partisan arguments to persuade based on false premises. That is one of the most subtle and effective debate (propaganda, actually) tactics in existence. In this case, Mr. Keen's argument is that lobbyists are equally effective for all because competing interests balance each other. That is nonsense. If that were true, then why is it that only the top 0.01% (or thereabouts) of Americans, which includes corporations as "entities" with free speech rights, can commit tax avoidance and evasion on a mass scale while the remaining 99.99% of us taxpayers as real people cannot? Obviously, competing interests are not equal. It isn't even close.

This defense of lobbyists is interesting and has several facets. Nonetheless, it is not persuasive. It ignores the capacity of money to aid lobbyists in corrupting politics for the benefit of a few and to the detriment of the public interest as a whole. Just listen to the Frontline broadcast and then decide how nice, fair and balanced things were in the case of the financial services industry providing financial services to "unbanked" customers. To the PC, that sorry situation looked like there was no balance whatever on the side of the public interest. Madison was right, men are not angels. That includes lobbyists and the masters they serve.

Defense #4 - Lobbyists work for a living: Senate majority leader Harry Reid (Democrat- Nevada) said this in defense of lobbyists: "People should understand that lobbyists, per se, are someone's father, mother, son, daughter . . . They work for a living." Geez, that defense is worse than feeble - it is downright silly. Like the vast majority (at least 95%) of Americans, the PC has parents and kids and works for a living. No one the PC knows was hatched from an egg or sprouted from under a rock. Everybody is in the same boat. This "argument" is mentioned because of who the argument comes from. No wonder some people in Congress* cannot see the reality of how and why lobbyists are so effective. They truly live in a happy world of purple unicorns and sweet-smelling flowers. This defense is epic fail.

* But not politicians like Senator Shelby. As pointed out in the Frontline interview, he knows perfectly well about the power of lobbyists to control government to the detriment of the public interest.


Defense #5 - Lobbyists are only middlemen: David V. Johnson (someone the PC knows nothing about and can find nothing about) says this: "After all, a lobbyist is only a middleman between special interests and persons in power. A director of a healthcare corporation, on the other hand, is a special interest."

Once again, the PC fails to see how this gets at the concern that lobbyists, armed with money, may corrupt government thereby hurting the economy and the public interest. So what if you call a lobbyist a middleman, a hired gun, a fishmonger or anything else? That is irrelevant to what a lobbyist advocating for a special interest is supposed to do, i.e., advocate for the special interest that is paying the lobbyist's (large) salary and expenses.

Such advocacy does not necessarily need to be for the public benefit because it is supposed to be for the special interest's benefit. Congress is supposed to protect the public interest, not special interests. Their job is to influence Congress for their own benefit. This isn't rocket science. It is high school level common sense. The PC gives this excellent lobbyist defense a well-deserved grade of: Fail.

Defense #6 - Lobbyists bring sense to the table and, they are passionate little sprites: Hilary Rosen (search for "passionate people"): a Democratic party strategist said this in defense of lobbyists: "In defense of lobbyists, because I used to be one, there is some sense to the table lobbyists bring. So much of this debate is actually being generated not inside of Washington but outside of Washington by sort of the partisan interests on both sides. You know, lobbyists are passionate people. Whether they're with the AARP or whether they're with Moveon.org or whether they're with insurance companies. And so it's really the debate that matters. It's the substance that matters. It's not necessarily who's doing it."

The PC likes this one. It's sneaky. The PC agrees that lobbyists "bring sense to the table". They have to because they know their interest's needs and concerns. People in Congress cannot possibly have the needed level of knowledge. People in Congress have neither the competence, training or time. People in Congress spend half of their time lobbying lobbyists to get campaign contributions, so of course those lobbyists will "bring sense to the table". Their "sense" includes a whole lot of cash along with information and advocacy about their specific concerns, which are sometimes legitimate public interests and sometimes not.

Japanese landing craft landing on USS Essex assault ship

East China Sea - December 2010

Again, this defense ignores the 4 ton gorilla in the room, i.e., why it is that lobbyists pay money to make their points? If lobbyists were advocating obviously good things, then those arguments would not need to be accompanied by money. If Ms. Rosen is correct and it is "really the debate that matters", then why is such an exuberant abundance of money involved? And, by the way, the PC is "passionate" but none of its arguments are accompanied by payments to anyone in Congress. Of course, that is why those arguments fall on deaf ears. This defense of lobbyists fails.

Defense #7 - Lobbyists don't often give piles of cash to corrupt politicians; they just persuade legislators and regulators on behalf of their clients - and anyway, the threat to politicians is only implied: This defense is absolutely great. I. Nelson Rose, poker player and gambling law expert says: "Lobbyists rarely give bundles of cash to corrupt politicians. Their main goal is to persuade legislators and regulators on behalf of their clients. They do this by providing information that no one else can. For example, lobbyists for tribes with casinos have done a good job of educating members of Congress on the meaning of sovereignty. . . . . Today, organizations like the Poker Players Alliance (PPA) are arguing that millions of Americans want their favorite past-time made legal. This provides political cover. And lawmakers also need to get reelected. I personally like the implied threat in the name of the leading advocacy group in California: Poker Voters of America. I don’t consider myself a lobbyist. My testimony would have been exactly the same regardless of who paid my expenses. But the group advocating a private casino for Hawaii would not have arranged for me to testify if my position had been the opposite."

Oh, good grief. A lobbyist who doesn't know he is a lobbyist. Where is one to begin with this blunderbuss? It is comforting to know that lobbyists only "rarely" give bundles of cash to corrupt politicians. That makes the PC feel a whole lot better. And, at least legislators now know all about American Indian sovereignty. Thank goodness for the restraint and teaching ability of lobbyists.

Actually, this defense is mainly a variation of the lobbyist defense that some lobbyists advocate for what members of the public want from government. In this case, poker players appear to want looser or no restrictions on gambling, or poker at least. The question is whether or not those lobbyists would be more persuasive if their "implied threat" was accompanied by millions of dollars in campaign contributions. Like defenses #1 - #7 above, this one ignores the question of money and thus fails.

Defense #8 - For every Jack Abramoff there are at least two "nice"lobbyists: This defense is wonderful. According to this defense (posted by Pete Abel, someone the PC knows nothing about), "Qualitatively and quanititatively, “lobby” is not a four-letter word - nor is it a reliable indicator of evil. For every Jack Abramoff, there are two or more ethical, civil, decent people who ply their trade lobbying. . . . the best lobbyists are not those who take a scorched-earth approach to pushing their clients’ interests. To the contrary, the best are those who are willing to tell their clients, “No,” as in “No, you’re not going to get everything you want, so let’s get realistic and talk about compromise, about what you can live without.” "

Hm. Think about that first part. Assume that there are 12,000 lobbyists swarming over Congress and other parts of the federal government. Further assume that for every Jack Abramoff-type "bad" lobbyist, there are three "nice" lobbyists. That leaves a mere 3,000 little Jack Abramoffs running amuck in Washington. Ohh - creepy.

Think about the second part of the defense. It makes the PC's point - lobbyists, scorched earth or not, are there to serve their own self-interest. Nothing surprising about that, is there? Hm. How many "scorched-earth" type lobbyists are there? Sounds like most of them. Creepy. This defense is feeble and fails because it ignores the role of money.

Defense #9 - Stop bashing lobbyists because you are uninformed and don't know what you are talking about: This comes to us from the grumpy side of cyberspace. The writer and self-described "free radical" Reverend Adam Carl eloquently defends lobbyists this way: "I'm getting sick and tired of listening to people criticize Washington "lobbyists" as the root of all evil. I dare say a vast majority of these critics don't even have a working understanding of what a lobbyist is or does. . . . . But objecting to the sickening influence of money in the political process is not the same as objecting to lobbying, per se, and we should not mistake the issue by targeting lobbyists for extinction. . . . . There are protections and regulations in place. Now it's possible that those protections are woefully insufficient. . . . ."

Well, what can you say in the face of that cannon blast? Lobbyists are good and that is that. But, wait!!! This defense does mention money by calling it a "sickening influence". The PC couldn't agree more - the money is sickening. This is a great defense. It's sort of like the "guns don't kill people, people kill people" type argument. Or, more loosely, sort of like former Vice President Cheney shooting his friend in the face with a shotgun. Somehow, the act (or sentiment) just doesn't quite get to where it tries to go.  

Anyway, these defenses could go on and on, but that gets to be repetitive.

Conclusion

The corrosive influence of many lobbyists (post 20) and inept political leadership (post 12) have been PC concerns for a long time. The PC has argued that the two party system is more illusion that reality. A few others argue the same point. The PC sees the role of lobbyists coupled with their campaign contributions as a significant part of the glue holding the illusion together.

Both parties cater to special interest money while bashing the ethics, morals and legality of the opposition. That happens regardless of their own ethical, moral and legal lapses (post 22, post 147). Congress will never regulate itself, adding to its contempt for the rule of law (post 139). In spite of the intense the partisan bashing, neither side is honest about the real priority, money.

Only one of the lobbyist defenses the PC found even mentions money and that one calls money in politics "sickening". Obviously, there is no way to defend the money. It is there to buy votes. The players in the game spin it by euphemistically calling it "buying access".

Just listen to the Frontline interview or read the transcript. Both Democrats and Republicans publicly and clearly admit that lobbyists can and have hurt the public interest. If you can look at reality without much bias or too much emotion, common sense tells you that lobbyists are a key part of the machinery that corrupts American Democracy and politics.

They work for their own interests because that is just how Capitalism works. In the Frontline interview, Shailesh Mehta the modern day pioneer of maximum credit card profit, said exactly that: "Bankers will figure it out to comply and say, "As long as I'm in compliance with what the government says, it's none of anybody's business to tell me what to do." That's the kind of mindset with which some people work, "Tell me the rules, and then I'll outsmart you all."

Obviously, the politicians are there to protect lobbyist interests, not the public interest. In view of the situation where even defenders of lobbyists cannot persuasively defend their own activities, a reasonable conclusion is this: Lobbyists, at least ones operating in the economic arena, inflict significantly more harm than good on the American economy and the public interest. That is true in the area of consumer credit, as suggested by the Frontline news report. It is also true in the even more important (lucrative) area of tax law and policy (argued in post 154 and post 155).

When or if the day ever comes that special interest money is taken out of the picture, then the PC will be more than happy to reconsider its low opinion of lobbyists who work against the public interest.

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The Pragmatic Caucus: Home of transparent politics and pragmatic policies; Because opaque politics and ideological policies failed.