John Stossel / December 17, 2008

The Scandal Is What’s Legal

Righteous indignation over allegations about Illinois Gov. Rod Blagojevich’s “pay to play” brazenness camouflages the corruption inherent in all government. After all, what does it mean to be a politician if not that you promise favors – coerced from the taxpayers – in return for support from key constituencies?

Ted Stevens, William Jefferson and Randy “Duke” Cunningham behaved egregiously enough to be convicted, but their actions didn’t cost taxpayers nearly as much as what their colleagues did supposedly acting in the “public interest.”

As The New York Times reported, “$700 billion … seemed to be an ocean of money. But after one of the biggest lobbying free-for-alls in memory, it suddenly looks like a dwindling pool. … The Treasury Department is under siege by an army of hired guns….”

Sen. Charles Schumer has delivered for that army, consistently voting for every bailout. He also “helped raise more than $120 million for the Democrats’ Senate campaign committee, drawing nearly four times as much money from Wall Street as the National Republican Senatorial Committee,” said The Times.

What Schumer does is legal, but the billions he gives to failing companies comes from taxpayers. A formal quid pro quo between politicians and bailed-out companies is not necessary. But everyone knows that a beneficiary is more likely to contribute to a congressman who votes for a bailout. They are also more likely to hire that congressman as a lobbyist when he retires. It is disgusting. But it is legal.

H.L. Mencken was right: “Every election is a sort of advance auction sale of stolen goods.”

The Public Choice economists remind us that contrary to what the civics textbooks imply, public “servants” have the same ambitions as the rest of us –wealth, career, influence, prestige. But there’s a big difference between us and them. Politicians, bureaucrats and the people they “rescue” get money through force – taxation. Don’t think taxation is force? Try not paying, and see what happens.

The rest of us must achieve our goals though voluntary exchange in the marketplace. That difference – force versus voluntary exchange – makes all the difference in the world.

In “The Road to Serfdom,” F.A. Hayek titled chapter 10 “Why the Worst Get on Top,” pointing out why the “unscrupulous and uninhibited are likely to be more successful [than moral people] in a society tending toward totalitarianism. … [T]he readiness to do bad things becomes a path to promotion and power.”

We don’t live in an authoritarian society, but Hayek’s point still applies.

A system that rewards politicians skilled at campaigning – which is the art of creating an illusion – and that puts hundreds of billions of coerced taxpayer dollars at the disposal of the winners will tend to attract men and women with a comparative advantage in manipulation. We shouldn’t be surprised that people like Blagojevich prosper in “public service” – until they get caught crossing the line.

At his news conference last week, Obama said, “[T]here is a tradition of public service, where people are getting in it for the right reasons and to serve, but there’s also a tradition where people view politics as a business.” That difference is not as sharp as he thinks. Even someone devoted to achieving the public good is ignorant of what is truly in the interest of a group of individuals as large and diverse as the population of a state or country. Lacking that knowledge – and with his political cronies and the most politically connected lobbies constantly whispering in his ear – he will presume that what is good for the best – organized interest groups – must be good for everyone. Then he will take from all of us to bail out those special interests. This will tend to be good for the politician’s career.

Blagojevich allegedly assumed someone would be willing to pay dearly to be a U.S. senator. I’m sure he was right. But if government were less important in our lives, politicians would have fewer goodies to trade. In return, we’d have more money and more freedom.

That’s one more reason to limit government power.


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