Tag Archives: lobbying

The Trump Effect

The more I learn about Trump’s Washington, the more nauseated I become.

I recently came across an article in the Washingtonian, looking at the ways in which Trump’s Presidency has changed lobbying.The lead-in to that discussion was a report detailing another “Trump effect”–his negative effect on tourism.

The development, Dow explains, was rooted in several forces, including a stronger US dollar, economic weakness in Latin America, and dirt-cheap airfare in Europe. But there was another factor, Dow says: “the Trump effect.” The 2017 executive order blocking entry to citizens from six majority-Muslim countries, and the President’s hostile proclamations about immigration, had signaled to foreigners they weren’t welcome here, even if they only wanted to spend money in Times Square and go home.

Understandably, travel agencies and their lobbyists wanted to “change the rhetoric.” In previous administrations, the lobbyists would have started with the bureaucracy, whose officials the lobbyists usually knew.

In Trump’s government, though, the rhetoric came from the President’s own gut. Sharing policy insight with an agency functionary wasn’t going to help. They had to plant their talking points in front of POTUS himself. But how?

The coalition hired S-3 Public Affairs, one of the many DC lobbying-and-media-consulting firms scrambling to adjust to the city’s new power structure. In prior years, says S-3 partner Amos Snead, the firm might have designed an “outside-in” approach—collect letters or petitions from industry backers around the country, bring them to Washington, and use the testimonials to influence lawmakers, agency officials, and other thought leaders. Trump’s Washington, Snead believed, required a different approach. He sensed there might be a more direct path into the President’s head, via one of his favorite mediums: Twitter.

They followed Trump’s movements and sent their ads to IP addresses that covered wherever he was. This is what’s known in the industry, as the “audience of one” strategy—and according to the article, it’s become a staple of the business of Washington under Trump.

We may be critical of bureaucracy, but individual bureaucrats typically know a great deal about their particular area of governance. Lobbyists who want to be effective have to pitch their arguments to people who can immediately spot the weaknesses, ask pertinent questions, and “vet” proposals before sending them on up the chain of command.

Not in Trumpworld. He Who Knows Nothing responds only to flattery, so lobbyists now bypass informed underlings (to whom Trump doesn’t listen anyway.) Now…

During at least the first seven months of the new administration, staffers in the White House communications department compiled flattering news stories about Trump into packets, which they delivered to the President twice a day. According to a former White House aide, as the packet made its way to the Oval Office, additional officials inserted other news articles they wanted the President to read. “It would typically be, like, Stephen Miller putting his latest race-baiting story in there,” the former White House aide says.

When consultants and lobbyists learned about the folder, they saw a fresh opportunity. One Republican consultant told me he was able to plant stories favorable to his corporate clients in Breitbart News—the far-right outlet once run by Trump’s former strategist, Steve Bannon—and then pass those stories to a friend in the White House, who in turn slipped them into the daily packet destined for the Oval. “If you have a friend in there who can get something on the Resolute desk,” the consultant says, “it doesn’t really matter what the source [of the information] is anymore.”

And then there’s television…

The cornerstone of the audience-of-one strategy, though, is Trump’s love affair with television. After the election, consultants began buying commercial time during Fox & Friends, the conservative morning show that the President is known to watch religiously. But how do you get a 72-year-old man with no interest in policy to watch a commercial on ethanol subsidies? Well, the influencers decided, you find old footage of Trump discussing the issue on the campaign and make him the star of the commercial.

“The President’s favorite topic is himself,” says a Republican consultant. “What better way to get him interested in a message than by providing him with the thing that he’s most obsessed with?”

There’s much more along these lines in the article. Those of you with strong stomachs should click through and read it. I’ll just warn you that the policy process in Trumpville looks nothing like the one I’ve been teaching for twenty years.

As for me–I’m just going to go throw up now.

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About That Opioid Epidemic

Credit where credit is due: Medical science and pharmacology have been nothing short of miraculous over the past century. People live longer and healthier lives as a result of breakthroughs in our understanding of how the body works, and how it responds to medications.

But we are also beginning to see some troubling consequences of our reliance on “miracle” drugs. Scientists warn of an emerging resistance to penicillin and other antibiotics, and blame their overuse. And then there is the opioid epidemic, which is yet another example of the problems that emerge when drug use and policy are dictated by the profit motive rather than by medical science and the Hippocratic Oath’s dictum “First, Do No Harm.”

AP and the Center for Public Integrity recently released a study detailing the effects of Big Pharma lobbying on opioid use and abuse. It should give us pause.

Key findings from the reporting:

 Drug companies and allied advocates spent more than $880 million on lobbying and political contributions at the state and federal level over the past decade; by comparison, a handful of groups advocating for opioid limits spent $4 million. The money covered a range of political activities important to the drug industry, including legislation and regulations related to opioids.

The opioid industry and its allies contributed to roughly 7,100 candidates for state-level offices, with the largest amounts going to governors and the lawmakers who control legislative agendas, such as house speakers, senate presidents and health committee chairs.

The drug companies and allied groups have an army of lobbyists averaging 1,350 per year, covering all 50 state capitals.

The opioid lobby’s political spending adds up to more than eight times what the formidable gun lobby recorded for political activities during the same period.

There’s much more.

I know I’m beating a dead horse (what, no medical interventions for the horse?), but there are economic arenas where markets work beautifully, and there are arenas where they don’t. Health care falls in the latter category. “Buying” health care is not equivalent to buying a car or a stove or other consumer good. The parties to the transaction do not possess equivalent information, and the “buyer” needing immediate care is rarely in any shape to go comparison shopping in any event.

The opioid epidemic is just one more example (in a very long list) of what happens when we insist on maintaining markets and encouraging the profit motive in a sector where informational and power asymmetries make genuine competition impossible.

Perhaps–if this election gives us a sane President and legislature–we can begin to correct the situation, by revisiting both the prohibition on government’s ability to negotiate drug prices, and the inclusion of a public option in the Affordable Care Act.

And someday–no doubt after I’m long dead–we might stop letting lobbyists make health policy, get Medicare for All or its equivalent, and join the majority of countries that have recognized that access to health care and lifesaving drugs should not be treated as  profit-generating consumer commodities.

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Why Prisons Should Never Be Privatized

There are some things that government–not the private sector–simply must do.

As I have written many times before, whether it makes sense to “contract out” the provision of government services is not an either-or question. The decision will depend upon a number of considerations: is this a core government responsibility? is it important to maintain institutional competence? does the government agency have the ability to adequately monitor contractors?

And especially–what are the negative consequences we might anticipate from a decision to grant governmental authority to private, for-profit enterprises?

The Justice Policy Institute has just released a report confirming a major concern voiced by critics of private prisons: the likelihood that those who profit from incarceration will lobby for harsher criminal justice penalties and seek to derail needed justice system reforms.

According to the report,  private prison companies actively engage in lobbying intended to protect and grow their profits, by working for harsh policies and longer sentences.

The authors report that while the total number of people in prison increased less than 16 percent, the number of people held in private federal and state facilities increased by 120 and 33 percent, respectively. As ThinkProgress reports,

Government spending on corrections has soared since 1997 by 72 percent, up to $74 billion in 2007. And the private prison industry has raked in tremendous profits. Last year the two largest private prison companies — Corrections Corporation of America (CCA) and GEO Group — made over $2.9 billion in revenue.

JPI claims the private industry hasn’t merely responded to the nation’s incarceration woes, it has actively sought to create the market conditions (ie. more prisoners) necessary to expand its business.

According to JPI, the private prison industry uses three strategies to influence public policy: lobbying, direct campaign contributions, and networking. The three main companies have contributed $835,514 to federal candidates and over $6 million to state politicians. They have also spent hundreds of thousands of dollars on direct lobbying efforts. CCA has spent over $900,000 on federal lobbying and GEO spent anywhere from $120,000 to $199,992 in Florida alone during a short three-month span this year. Meanwhile, “the relationship between government officials and private prison companies has been part of the fabric of the industry from the start,” notes the report. The cofounder of CCA himself used to be the chairman of the Tennessee Republican Party.

One of the primary reasons governments exist is to provide for the public safety. Decisions about the most effective ways to accomplish that should be made on the basis of evidence, by disinterested policymakers carefully considering what the research tells us about the efficacy of various approaches.

The private prison industry is spending millions of dollars opposing efforts to reform the nation’s drug laws–reforms based upon years of research demonstrating that the Drug War has been a costly failure, and that imprisoning thousands of low-level offenders has been counter-productive.

Americans spend millions of dollars on the criminal justice system. Those dollars are supposed to make us safer–not make private interests richer.

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Perverse Incentives

I know this chart has probably been floating around the Internet for a while, but I recently came across it, and it really made me think.

The chart lists 30 major corporations, their profits for 2011, the amount of taxes each paid that year, and the amounts they paid lobbyists. A majority of those listed  paid zero taxes on massive profits, thanks to various provisions of the tax code. Many of them actually got money back, again, courtesy of those same arcane provisions. Virtually all of them spent millions of dollars lobbying the federal government; in every case, the amounts spent to influence policy far exceeded the amounts paid in taxes.

What’s wrong with this picture?

There are often sound reasons for using the tax code to encourage behaviors that benefit the greater society. If we want more energy, for example, and we recognize that the costs of exploration and the risk of coming up dry are high, it makes sense to provide a tax incentive to ameliorate that risk. If we want businesses to modernize, to invest in equipment that will make them more productive, offering them the ability to write off those investments over the useful life of the equipment is reasonable. There are many other examples.

The problem comes when the incentives bear no reasonable relationship to the behaviors they are intended to encourage–when those well-compensated lobbyists manage to persuade lawmakers to favor their clients by inserting special provisions in the law or special treatment in the tax code. In the case of oil and gas, for example, companies have not only benefitted from obscenely favorable tax provisions, but have negotiated leases of public lands on terms that have been widely criticized as giveaways.  Here in Indiana, Leucadia–a politically well-connected energy company–will benefit from a 30-year agreement with the state that effectively shields the company’s new coal gasification plant from unfavorable market conditions. 

Leucadia is hardly an isolated example. There’s a reason someone coined the term “crony capitalism.”

The well-connected and powerful have always been able to influence policy. To a certain extent, it’s an unavoidable aspect of human society. But in 21st Century America, we are dangerously close to corrupting the system, eviscerating checks and balances, and institutionalizing a caste system. Recent studies have documented America’s depressing loss of social mobility. Headlines routinely report the self-dealing of Wall Street bankers and financiers, along with the outrageous salaries and bonuses that bear no relationship to their performance. Jack Abramov, the disgraced lobbyist whose name has become synonymous with K-Street and Washington deal-making, is trying to rehabilitate his reputation in interviews sharing “chapter and verse” of influence-peddling in the nation’s capital, and the picture he paints is not pretty.

Local business-people, shop-owners, mom-and-pop enterprises and other middle-class Americans go to work every day, follow the rules, and pay their taxes when due. They don’t have agents working the halls of the legislature to get them special deals. They don’t have hundreds of thousands of dollars to contribute to Super-Pacs, and Citizens United didn’t free them to donate megabucks to buy a Congressman or two.

Shouldn’t the major corporations that are profiting so handsomely also be paying taxes to the country that makes those profits possible? Those companies depend upon workers educated in our public schools. They rely on our courts to enforce their contracts. Their trucks drive on roads paved by American taxpayers. Tax-supported police and fire-fighters protect their warehouses. Why do they prefer to pay millions to lobby for special advantage rather than simply using that money to pay their fair share of the costs to maintain our physical and social infrastructure?

What are the incentives that lead those who are already rich and privileged to seek even more by gaming the system?

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Good Question

A friend has shared with me a letter written by U.S. Representative Henry Waxman to one Deborah Holt. The crux of the inquiry is in the following paragraphs:

“According to lobbying disclosure documents filed with the U.S. Senate, you were retained by the State of Indiana to lobby regarding the proposed Keystone XL pipeline. I al11 writing to request a briefing in order to better understand the State of Indiana’s interest in Keystone XL.

On January 24, 201 2, in responding to President Obama’s State of the Union address, Indiana Governor Mitch Daniels criticized President Obama’s recent decision to deny a permit for the proposed Keystone XL oil pipeline. I I have subsequently learned that in the fourth quarter of 2011 you received $50,500 in state taxpayer funds as a lobbyist for the State of Indiana, including for lobbying related to Keystone XL. 2 This seems unusual as the State does not have an obvious interest in seeing the Keystone XL project constructed. The proposed route for the Keystone XL pipeline does not pass through the State of Indiana, nor does it come close to the State’s borders; the nearest the:proposed route would approach would be hundreds of miles away in Nebraska and Kansas. Indiana facilities would not have access to the pipeline, nor would it appear that Indiana would particularly benefit from any economic activity associated with the construction of the pipeline. According to reports, TransCanada has contracted to purchase its steel from India – not from u.s.steel producers. The State of indiana thus appears to receive no clear benefit from the construction of the Keystone XL pipeline.”

Waxman goes on to quote the Canadian company building the pipeline to the effect that the project will increase oil prices in Indiana and several other states, so consumer concerns were evidently not a motivation for this interesting use of taxpayer dollars.

The amount of money involved is not great, but in a down economy, when Indiana taxpayers are being told we lack money for public education and other public services, when our fiscal shortfall is the reason Governor Daniels has given for laying off government workers, why are we spending scarce public dollars lobbying for a project that will not benefit us, and in which we appear to have no articulable interest?

Inquiring minds want to know.

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