It really is amazing how many of our elected officials believe that taking money from special interest groups doesn’t affect their voting behavior. They all think that they are the exception – that their integrity outweighs the potential influence of the money. Either they’re naive, embarrassed because they know the truth, intentionally misleading us, and/or they need to be educated about the subtleties of persuasion and conflict-of-interest.
Here is a strong piece by Steven Strauss, in which he culls academic research results about the influence of lobbying and campaign contribution cash.
With rare bi-partisan consensus, all members of Congress assure their constituents that money spent lobbying them and campaign contributions to their campaigns does not influence their judgment. Yet, despite these assurances, 75% of all Americans believe money influences Congress.
Several recent academic studies support the public's concern:
• Tax Benefits: Recent research shows that, in expectation for every $1 a firm spends to lobby for targeted tax benefits, the benefit is between 6x and 21x. (See 1;2 below.)
• Improved Cash Flows: On average, and controlling for other factors, firms that engaged in lobbying received more generous depreciation treatment. (2)
• Increased Market Value: Another study demonstrates that firms which lobby 'significantly outperform non-lobbying firms with respect to increased market value of equity'. This can be as high as adding another 2% per year to returns. (3)
• Protection: A separate analysis found that "compared to non-lobbying firms, firms that lobby, on average, have a significantly lower hazard rate of being detected for fraud, evade fraud detection 117 days longer, and are 38% less likely to be detected by regulators." (4)
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If you doubt the value of lobbying or campaign contributions, consider that American corporations now spend about $3.5 billion/year on lobbying alone. The Cato Institute estimates the value of the resulting corporate welfare at about $90 billion/year.
Read the rest.