- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Headlines from the Obama Dependency Economy

Posted By Conn Carroll On May 4, 2010 @ 4:30 pm In Economics | Comments Disabled

[1]

  • Politico, April 22nd 2010: New energy powers up lobbying [2] – “Alternative energy used to be just a speed bump on K Street. In 1998, the entire sector spent only $2.4 million lobbying the federal government … In 2009, alternative energy spent $30 million on lobbying, 12 times its 1998 amount.”
  • The Washington Post, May 3rd, 2010: More tech firms setting up offices in Washington area to get federal business [3] – “In general, high-tech jobs in the region have been multiplying at a disproportionately high rate. … The number of software services jobs, for instance, has increased 55 percent in the District, Maryland and Virginia in the past 10 years, as compared with 36 percent nationally. In engineering and technology services, the region has experienced a 38 percent increase, while the nation saw 29 percent growth.”
  • Gallup, May 3rd, 2010: Federal Government Outpaces Private Sector in Job Creation [4] – “Gallup’s Job Creation Index for April reveals significantly more hiring within the federal government than in the private sector. … By almost a 2-to-1 margin, federal employees say their employer is hiring rather than firing, giving the federal government a relatively robust +18 Job Creation Index for April. … The Job Creation Index among private-sector and other non-government workers is +9.”

Back in 1994 Jonathan Rauch wrote in Government’s End [5]:

By definition, the power of government to solve problems comes from its ability to reassign resources, whether by taxing, spending, regulating, or simply passing laws. But that very ability energizes countless investors and entrepreneurs and ordinary Americans to go digging for gold by lobbying government. … Economic thinkers have recognized for generations that every person has two ways to become wealthier. One is to produce more, the other is to capture more of what others produce. … Washington looks increasingly like a public-works jobs program for lawyers and lobbyists, a profit center for professionals who are in business for themselves.

President Obama simply does not comprehend this. He recently told Business Week [6]: “You would be hard-pressed to identify a piece of legislation that we have proposed out there that, net, is not good for businesses.” The President does not understand that there is a difference between being pro-business and being pro-market [7]. When you undermine the bankruptcy system to bailout Chrysler, that may be good for Chrysler, but it is a disaster for markets.

Every single item of President Barack Obama’s agenda empowers the Washington/lawyer/lobbyist economy over a free allocation of capital. Energy and software companies should be investing in scientists and engineers not lawyers and lobbyists. But when Washington becomes a center making profits, you can not blame firms from investing in the political system. Once industries become dependent on Washington subsidies and regulation, no amount of campaign finance reform will ever stop firms from trying to influence Washington behavior.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/05/04/headlines-from-the-obama-dependency-economy/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/lobbyists.jpg

[2] New energy powers up lobbying: http://www.politico.com/news/stories/0410/36172.html

[3] More tech firms setting up offices in Washington area to get federal business: http://www.washingtonpost.com/wp-dyn/content/article/2010/05/02/AR2010050203285.html

[4] Federal Government Outpaces Private Sector in Job Creation: http://www.gallup.com/poll/127628/Federal-Government-Outpaces-Private-Sector-Job-Creation.aspx

[5] Government’s End: http://www.amazon.com/Governments-End-Jon-Rauch/dp/1891620495

[6] Business Week: http://www.businessweek.com/print/magazine/content/10_08/b4167032896448.htm

[7] being pro-business and being pro-market: http://econlog.econlib.org/archives/2009/10/business_vs_mar.html

Copyright © 2011 The Heritage Foundation. All rights reserved.