Cashing in on Connections
Washington Post editorial writer Charles Lane nails it:
A large number of Washington’s top earners fit into the less productive category. Many of them specialize in trading on their connections to D.C.’s biggest “industry,” the federal government. As of 2012, lobbying for tax breaks, contracts, exclusive licenses, subsidies and the like was a $3.3 billion-a-year industry, according to the Center for Responsive Politics.
The average salary of the CEOs — chief lobbyists — of the 30 biggest industry trade associations, including incentives and deferred compensation, was $2.34 million in 2010, according to Bloomberg News.
More than a few of these people used to be governors, senators or members of the House, where they acquired the access that they now sell to the highest bidder. They are accompanied by a small army of former executive and legislative branch staffers who have gone through the revolving door from government to what Washingtonians euphemistically call “the private sector.”
Economists have a name for this sort of behavior: rent-seeking. In economic parlance, “rent” means the profit from gaining control over existing sources of wealth as opposed to creating new ones.
Washington lobbying, and the government-sponsored privileges it secures for various interest groups, is rent-seeking in its purest and most pernicious form. Various societies have grown free and prosperous by many different methods; dividing up existing wealth according to political connections is not one of them.
Lane concludes: Instead of worrying about how much money rich people make, we should focus more on how they make it.