Sunday, August 9, 2009

Lobbying (continued from last week)

In last week's post I described the ubiquitous nature of lobbying in California. I doubt that any reader will find it difficult to extrapolate this situation to the national scene, where lobbying is legendary and the "game" is played for very high stakes -- billions if not trillions of dollars.

The amount of money spent on lobbying reveals the importance of the activity to those with skin in the game. Before I throw a few numbers at you, however, let me reassure you that I strongly support the First Amendment to the U.S. Constitution, certainly including the right to free speech. If lobbying were limited to presenting information to governmental officials and attempting to persuade them to engage (or not engage) in certain activities, I wouldn't be writing this. But common knowledge about Political Action Committees, gifts and travel, etc., added to the fact that lobbying involves far more money than could ever be spent on education and persuasion alone, leads us to the inevitable conclusion that more than free speech is involved.

OK, are you ready for some stark statistics? According to the Center for Responsive Politics (visit the website at, total lobbying at the federal level alone in 2008 amounted to $3.30 billion. That's well over twice the amount spent ten years earlier. It's also about $1,000 for every man, woman, and child living in the United States -- every year -- without even including the prodigious amounts spent on lobbying at the state and local levels.

According to The Hill, a congressional newspaper with a special focus on business and lobbying, the top 100 lobbying firms posted revenue of $414 million in the first half of 2009. Firms ranked 101 to 200 brought in another $125 million. Extrapolating to the full year, it follows that the top 200 lobbying firms in the country will rake in well in excess of $1 billion in 2009.

These numbers may under-report the truth. Some companies don't register their in-house lobbyists unless and until some watchdog agency calls them on the carpet (Archer Daniels Midland is one example, according to The Hill). Therefore, those expenditures don't get reported.

Needless to say, these lobbying efforts are focused on accomplishing specific objectives. So I know you won't be surprised that health care, insurance, and finance companies spent a bundle recently. In fact, according to the New York Times (8/2/09), the health care industry spent $263.3 million on lobbying in the first half of 2009. The combined finance, insurance, and real estate industries came in a close second at $222.7 million. PhRMA, the powerful association of pharmaceutical companies, spent $6.1 million, up 23% compared to the comparable period in 2008.

Do you suppose that companies receiving TARP funds from the government (bail-out money!) ceased their lobbying activities, claiming poverty? Nope. According to the Commonwealth Institute, TARP recipients spent $114 million on lobbying in 2008, including $14.8 million during the last quarter alone when "relief" funds were actually being distributed.

What exactly does all this lobbying buy? (Academic studies, as well as articles in the popular media, give us the answer.) In what ways did lobbying result in the financial meltdown to begin with? Stay tuned, faithful readers!

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