Tag: lobbying

NY MTA to APTA: Quit Wasting Our Money

The New York Metropolitan Transportation Authority (MTA) has formally quit its membership in the American Public Transportation Association (APTA), the nation’s principle transit lobby. In a harshly worded seven-page letter, MTA accused APTA of poor governance, an undue focus on small transit agencies, and having an embarrassingly large compensation package to APTA’s president.

The MTA and its affiliates, Metro North, the Long Island Railroad, and New York City Transit, together carry 35 percent of all transit riders in America. Since MTA’s ridership has been growing while transit elsewhere has declined, this percentage is increasing.

Yet APTA’s focus has been on lobbying for increased funding for smaller agencies, including building new rail transit lines in cities that haven’t had rail transit and extending transit service in smaller cities and rural areas that have had little transit at all. As a result, says the letter, MTA has been short-changed by roughly a billion dollars a year in federal funding that it would have received if funds were distributed according to the number of transit riders carried.

This accords with the finding of a Cato policy analysis that found that New York has been shorted half a billion dollars a year in discretionary transit funds. Since discretionary funds make up less than half of all federal transit funds, it is easy to imagine that the nation’s largest urban area is losing a billion dollars a year to smaller cities that are not making effective use of those funds.

How to Get a Piece of the Taxpayers’ Money

Two articles in the same section of the Washington Post remind us of how government actually works. First, on page B1 we learn that it pays to know the mayor:

D.C. Mayor Muriel E. Bowser has pitched her plan to create family homeless shelters in almost every ward of the city as an equitable way for the community to share the burden of caring for the neediest residents.

But records show that most of the private properties proposed as shelter sites are owned or at least partly controlled by major donors to the mayor. And experts have calculated that the city leases­ would increase the assessed value of those properties by as much as 10 times for that small group of landowners and developers.

Then on B5 an obituary for Martin O. Sabo, who was chairman of the House Budget Committee and a high-ranking member of the Appropriations Committee, reminds us of how federal tax dollars get allocated:

Politicians praised Mr. Sabo, a Norwegian Lutheran, for his understated manner and ability to deliver millions of dollars to the Twin Cities for road and housing projects, including the Hiawatha Avenue light-rail line and the Minneapolis Veterans Medical Center.

Gov. Mark Dayton (D) said Minnesota has important infrastructure projects because of Mr. Sabo’s senior position on the House Appropriations Committee.

We all know the civics book story of how laws get made. Congress itself explains the process to young people in slightly less catchy language than Schoolhouse Rock:

Solyndra: A Case Study in Green Energy, Cronyism, and the Failure of Central Planning

Back in 2011 I wrote several times about the failure of Solyndra, the solar panel company that was well connected to the Obama administration. Then, as with so many stories, the topic passed out of the headlines and I lost touch with it. Today, the Washington Post and other papers bring news of a newly released federal investigative report:

Top leaders of a troubled solar panel company that cost taxpayers a half-billion dollars repeatedly misled federal officials and omitted information about the firm’s financial prospects as they sought to win a major government loan, according to a newly-released federal investigative report.

Solyndra’s leaders engaged in a “pattern of false and misleading assertions” that drew a rosy picture of their company enjoying robust sales while they lobbied to win the first clean energy loan the new administration awarded in 2009, a lengthy investigation uncovered. The Silicon Valley start-up’s dramatic rise and then collapse into bankruptcy two years later became a rallying cry for critics of President Obama’s signature program to create jobs by injecting billions of dollars into clean energy firms.

And why would it become such a rallying cry for critics? Well, consider the hyperlink the Post inserted at that point in the article: “[Past coverage: Solyndra: Politics infused Obama energy programs]” And what did that article report?

Why Are Environmental Policy Conflicts So Intractable?

On Earth Day the op-ed pages remind me of “Groundhog Day.”  Environmentalists argue we need stricter environmental regulation.  Business interests argue such regulations reduce economic growth and cost the economy jobs.  Each also invokes “sound science” as an adjudicator of the conflict.  Environmentalists invoke “science” in the case of CO2 emissions and effects while business interests invoke “science” in the case of traditional pollution emissions.  Each year we wake up and the same movie plays out.

The scientific validity of people’s preferences plays no role in the market’s delivery of private goods.  Markets can and do supply organic lettuce regardless of whether it is really “better” for your health.  The scientific validity of people’s preferences is irrelevant.

Air- and water-quality environmental disputes are more challenging to analyze than the supply of organic lettuce for two reasons.  First, while property rights exist for lettuce, they often do not exist for air and water.   Thus, environmental politics involves continuous struggle over implicit property rights and the wealth effects that flow from such rights.  Second, both conventional air and water quality are “local” public goods (club goods) rather than private goods, thus individual differences in consumption, the primary method of reducing conflict associated with private goods, are not possible.  Instead, everyone’s varied preferences for environmental goods can only result in one jointly consumed outcome.

One possible impediment to the implementation of market-like solutions to air and water quality is that the initial ownership of property rights to air or water emissions not only has wealth but also efficiency effects.  That is those particular property rights (the right to a pristine environment) are so valuable relative to other assets that their initial allocation alters the willingness of people to pay for them and thus affects how much pollution exists.  In such cases the initial distribution is the whole ballgame because it determines the resulting air- and water- quality levels.

The Parasite Economy and The Libertarian Mind

In The Libertarian Mind, which is officially published today, I have a chapter titled “What Big Government Is All About” that aspires to be applied Public Choice analysis. Much of it relates to what I think Jonathan Rauch first called “the parasite economy,” the part of the economy that involves getting through government what you can’t get through voluntary market processes. Reason.com has just published an excerpt from that chapter, with a few recent examples added, such as these all-too-typical stories:

Lobbying never stops. One week in December, the Kaiser Health News reported that “growth opportunities from the federal government have increasingly come not from war but from healing.” That is, “business purchases by the Department of Health and Human Services have doubled to $21 billion annually in the past decade.” And who showed up to collect some of the largesse? Well, General Dynamics was having trouble making ends meet with defense contracting, so suddenly it managed to become the largest contractor to Medicare and Medicaid. “For traditional defense contractors,” wrote Kaiser Health, “health care isn’t the new oil. It’s the new F-35 fighter.”

Of course, the old F-35, despite a decade or more of running behind schedule and over budget, is still doing pretty well. That same week Congress passed the $1.1 trillion “Cromnibus” spending bill, including $479 million for four F-35 fighters from Lockheed that even the Pentagon didn’t want. The Wall Street Journal reported that the bill “sparked a lobbying frenzy from individual companies, industries and other special interests”—pretty much the same language you could have read in earlier stories about Porkulus and Obamacare. Every provision in the bill—from the $94 billion in Pentagon contracting to $120 million for the Chicago subway to an Obamacare exemption for Blue Cross and Blue Shield—has a lobbyist or several shepherding it through the secretive process.

And I also talked about the parasite economy on John Stossel’s television show last Friday night:

For more on the parasite economy, and everything else you wanted to know about libertarianism, read The Libertarian Mind.

Lobbyists Swarm around the Winners

I’ve been talking a lot about the parasite economy this week – like in my forthcoming book The Libertarian Mind and on STOSSEL this Friday night – and two stories in the Washington Post today illustrate the problem.

John Wagner reports that campaign contributions are now flowing to surprise Maryland gubernatorial winner Larry Hogan. Why would campaign contributions come in after the campaign is over?

“A lot of people speculatively invested in the Brown campaign and now realize they made the wrong choice,” said Jennifer Bevan-Dangel, executive director of Common Cause Maryland, a group that closely monitors campaign contributions. “Donors give because it gets them in the door, regardless of who’s in power.”

The reports show that Hogan raised nearly $1.4 million in the two months after the election — roughly the amount that Martin O’Malley (D) raised after he was elected governor in 2006.

When a state government hands out some $40 billion a year, lots of people want to get friendly with the people who will influence how that money is spent. Through regulations, the government influences billions more, and lobbyists don’t want to be left out of those discussions either.

Money flowed to Hogan from utilities, banks and health-care companies that are regulated by the state and from associations that represent businesses in Annapolis. Groups representing chiropractors, nurse practitioners, nursing homes and psychologists have all given since the election….

Other donors include more than a dozen of the highest-paid lobbyists in Annapolis. 

Also in today’s Post, Mike DeBonis reports that council candidates backed by newly elected D.C. mayor Muriel Bowser are raking in cash for their upcoming special elections. People want a friend in city hall, too.

Why indeed do “chiropractors, nurse practitioners, nursing homes and psychologists” need lobbies, much less give campaign contributions? Because they want a piece of vast government expenditures on health care, they want regulatory protection from competition, or they want something else that government can deliver. 

I make no criticism here of Governor Hogan or Mayor Bowser. I have no reason to think that either of them has done anything inappropriate for a campaign contributor. This is a systemic problem.

It’s just part of the parasite economy, where you use the law to get something you couldn’t get voluntarily in the marketplace.

Lobbyists Deal — Easily — with a Changing Congress

On NPR’s “Morning Edition,” Peter Overby discusses the way lobbyists are adjusting to the new Republican Congress. Some are hiring former Republican lawmakers and congressional staff. Some are reminding clients that there are still two parties, as in this nice ad for superlobbyist Heather Podesta, former sister-in-law of White House eminence John Podesta:

OVERBY: Even in a Republican Congress, lobbyists will need to court Democrats, too. Heather Podesta is happy to point that out. She runs her own small Democratic firm.

HEATHER PODESTA: The power of the Congressional Black Caucus has really grown.

OVERBY: In fact, she says CBC members are expected to be the top-ranking Democrats on 17 House committees and subcommittees.

PODESTA: Corporate America has to have entree into those offices. And we’re very fortunate to have the former executive director of the Congressional Black Caucus as part of our team.

After every election, the lobbyists and the spending interests never rest. The challenge for the tea party and for groups such as the National Taxpayers Union is to keep taxpayers even a fraction as engaged as the tax consumers.

In the last analysis, as I’ve written many times before – and in my forthcoming book The Libertarian Mind – the only way to reduce the influence of lobbyists is to shrink the size of government. 

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