ROSS DOUTHAT » U.S.

Rare Conservative-Progressive Agreement: Corporate Capture Of The Government Is A Bad Thing

September 27, 2012   ·   0 Comments

Source: Economic Policy Institute

Above: Ross Douthat

By Ross Eisenbrey:

Ross Douthat, a very conservative New York Times columnist, rarely writes anything—even a sentence—that I agree with. So I was surprised to find myself nodding my head as he pointed out the danger of having a capital region so much richer than the rest of the country that policymakers lose touch with the lives of the people their decisions affect.

Douthat writes that seven of the 10 richest counties in America are in the Washington, D.C. region and that Fairfax, Loudoun and Arlington Counties, all in Northern Virginia, have higher median incomes than every other county in the United States.

To his credit, Douthat does not use this as an opportunity to bash federal employees. Instead, he correctly points out that the big growth in numbers and incomes has come from the private-sector firms that feed off the federal government:

“Whence comes this wealth? Mostly from Washington’s one major industry: the federal government. Not from direct federal employment, which has risen only modestly of late, but from the growing armies of lobbyists and lawyers, contractors and consultants, who make their living advising and influencing and facilitating the public sector’s work.”

Douthat tries to make the concentration of wealth in the capital region into a case for Romney’s election, but he quickly abandons the attempt and comes back to the truth:

“In reality, our government isn’t running trillion-dollar deficits because we’re letting the working class get away with not paying its fair share. We’re running those deficits because too many powerful interest groups have a stake in making sure the party doesn’t stop.”

Douthat points out the obvious: the “powerful interest groups” that have captured the government don’t include the poor, on whom the federal government spends less and less per capita. Instead, the rivers of money are flowing to people who need help the least: upper-income families with mortgage interest deductions on second homes, attorneys and executives getting subsidies to pad their 401(k) accounts and Keogh plans, and agribusiness owners getting subsidies that are justified as help for small family farms. These, of course, are all people who make campaign contributions. Oddly, Douthat neglects to mention the giant U.S. defense industry and its legions of contractors and consultants, the Blackwaters and Halliburtons that consume billions of defense dollars doing very profitable work the military used to do without a profit.

Douthat asks, “Is it good for America?” The answer is no.

First, the concentration of wealth in the capital region detaches policymaking from reality; it makes it easy for members of Congress and top staffers making $170,000 a year to confuse themselves with the middle class (median household income in 2011 was $50,054) and to believe that they and their friends or spouses making $250,000 a year deserve or need a tax cut. This is, sadly, a bipartisan problem: even some high-ranking Democrats think the middle class extends to families with household income of $250,000 or more. They have no trouble helping Republicans craft policies that subsidize the lifestyles of people in the top 5 percent.

Second, the wealth that surrounds them blinds government officials to the crisis of unemployment and underemployment that continues to devastate much of the country. It’s easy to think that the problem lies with the unemployed, rather than the economy, when you and all of your neighbors are doing quite well. Imports from China might be costing millions of jobs and driving down wages in places like Cleveland and Baltimore, but when everyone around them has at least a college degree it’s easy to persuade policymakers that education is the answer—not trade policy or industrial policy. “If only the schools were better and more people got a college education, Cleveland could pull itself up by its bootstraps.”

And third, this concentration of wealth and income gradually undermines the legitimacy of the government upon which all of us—not just Romney’s 47 percent—depend for clean water, safe food and drugs, transportation infrastructure, a system of laws, and much else. Why vote or pursue a career of government service if you believe that our system of government is rigged for the benefit of special interests? I recently saw research by Lake Research that suggests Douthat’s views of the capital and the national government are widely shared:

“Our gilded District is a case study in how federal spending often finds its way to the well connected rather than the people it’s supposed to help, how every new program spawns an array of influence peddlers, and how easily corporations and government become corrupt allies rather than opponents.”

Douthat and I would pick out different villains, no doubt. I would name insurance companies and defense contractors as the prime examples of corporations that have become “corrupt allies of government,” while he might name General Motors. But however tentatively, we both agree that the Washington influence industry’s growth is not benign, and that the capture of government by corporations and the well-off is a threat to democracy.

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