Rocky Vega

Our friend Barry Ritholtz over at The Big Picture recently came across a Time article that sheds a little light on how lobbyists so effectively spin straw into gold for companies with deep pockets.

As he puts it, the subtitle for the piece tells you everything you need to get the idea,“Why Lobbying Is Washington’s Best Bargain; Lobbyists say for just a few million, they can make clients billions.”

Here’s the quote Ritholtz cites from Time:

“Lobbyists [are] the best bargain in Washington. Capitol Tax Partners, for example, is one of 1,900 firms that house more than 11,000 lobbyists registered to operate in Washington. Last year, according to the Center for Responsive Politics (CRP), firms like Capitol Tax were paid a total of $3.49 billion for unraveling the mysteries of the tax code for a variety of businesses.

“According to Capitol Tax co-founder Lindsay Hooper, his firm provided “input and technical advice on various tax matters” to such clients as Morgan Stanley, 3M, Goldman Sachs, Chanel, Ford and the Private Equity Council, which is a trade group trying to head off a plan to increase taxes on what’s called carried interest, a form of income enjoyed by the heavy hitters who run venture-capital and other types of private-equity funds.”

He also points out this particularly egregious example of lobbyist alchemy:

“Auto Dealers made out even better: They dropped less than $10 million dollars ($6.3 million on lobbying, and an additional $3.4 million in campaign contributions). For their troubles, the dealers get to keep $20 billion each year in undisclosed added interest and fee kickbacks to over-priced loans.”

It’s not necessarily true throughout history or for all its members, but the purchasable decision-making in Congress seems to no longer even bother being discreet. Sheesh. You can read Ritholtz’ complete thoughts on the matter, including a derivatives trading banks example, in his Big Picture post on government for sale.

Best,

Rocky Vega,
The Daily Reckoning

Rocky Vega

Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let?s Go Publications, Harvard Student Agencies, and The Harvard Advocate.

  • chris

    Wow, how do I sign up to be a government lobbyist? I can provide the technical advice.

  • http://maps.google.com/maps/place?cid=13693926172283633508&hl=fil jewelry stores san diego

    Some in the 1930s, more in the war, then it just about stopped happening until the 1960s. Interesting. And more recently, of course, it became rarer because CG of all sorts became rarer.

Recent Articles

5 Min. Forecast
OPEC Meeting Update: Beware the Oil Price Wars

Dave Gonigam

So much for Americans existing "at the mercy of OPEC." According to the Financial Times, U.S. dependence on oil imports from the OPEC countries is now its lowest since May 1985. Dave Gonigam explains how this is affecting global oil prices, and what to expect from this week's OPEC meeting. Read on...


Bill Bonner
Jonathan Gruber: Right About Obamacare. Wrong About the American Voter.

Bill Bonner

Poor Jonathan Gruber is getting little support or appreciation. Instead of being thanked for helping us understand how Obamacare really works, he is being assailed from both the right and the left. Today, Bill Bonner explains why Mr. Gruber had it right... except about the "stupidity of the American voter." Read on...


A Huge First Step in Reversing Paralysis

Stephen Petranek

Advancements in technology, especially biotechnology, are happening at an amazing rate. And that's opening up incredible opportunities for astute, knowledgeable investors who - with the right guidance - can make serious gains in record time. Stephen Petranek explains...


Why You Should Be Buying Solar Stocks With Both Hands

Greg Guenthner

Oil's recent slump has given you a unique opportunity to pick up your favorite solar stock at a bargain-basement price. So if you're looking to double your money over the next 18 months, you need to quit staring at gas prices -- and start paying attention to solar stocks. Greg Guenthner explains...