Republic, Lost_ How Money Corrupts Congress--And a Plan to Stop It - Lawrence Lessig [89]
Yet however strongly we can agree with where things went, with all due respect to the most important political figure in my lifetime, we should push a bit more to understand just why things went where they went. Reagan spoke as if the engine driving our inevitable destruction were the rapaciousness of the masses and the bureaucrats—the masses, as they “vote themselves largesse out of the public treasury”; the bureaucrats, as they relentlessly pushed to regulate an ever greater scope of human activity.
When you look to the causes of the massive explosion in government debt, however, it’s hard to see “the masses” as responsible for much of anything. Instead, the overwhelming dynamic in income in America over the past two decades has been rising inequality, which “government taxes and benefits have actually exacerbated[—]an outcome witnessed in virtually no other nation.”4 Sure, the Medicare Prescription Drug, Improvement, and Modernization Act was designed to help the middle class. But Part D was a $49.3 billion gift to big PhRMA.5 Sure, health care reform will help millions of uninsured, but it was also a $250 billion gift to PhRMA and the insurance industry.6 Sure, Obama pledged $700 billion to save Wall Street and another $800 billion to stimulate the economy. But it was the banks that received the vast majority of that bailout (and more important, the $9 trillion of effectively zero-interest loans from the Fed). Fewer than $75 billion was ever intended to go to homeowners, and in the end, less than $4 billion actually did.7
The engine behind this spending, or at least the most horsepower, came not from the masses, but from the special interests. And these interests could leverage their power to achieve this rapaciousness because—in part at least—of the “self-reinforcing cycle of mutual financial dependency” between members of Congress and the lobbyists, as the American Bar Association’s Lobbying Task Force put it.8
Reagan couldn’t see this in the early 1970s when his philosophy was finally set. The dynamic hadn’t quite taken hold. No doubt there was “rent seeking”—efforts by special interests to secure favors through the government that they couldn’t get through the free market. But then, the level of this rent seeking was nothing close to the level that is now the new normal. It’s not the game that has changed. It is the scale. Reagan can be forgiven for missing this scale.
Likewise with the alleged rapaciousness of bureaucrats. It’s easy to see how Reagan’s fear was engendered. In the early 1970s, Nixon, a Republican, had established the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), the Consumer Product Safety Commission (CPSC), and the Mining Enforcement and Safety Administration (MESA), and had expanded the Office of Management and Budget (OMB). As these regulators got going, there was a wide range of new stuff regulated. That flurry of activity could easily have seemed like a trend. As if the agencies would take off, regulating untethered to the mother ship.
But agencies regulate only so far as Congress allows. And as it turns out, the reasons that Congress might have for allowing the scope of regulation to grow are more than a simple pro-regulatory bias.
We’ll see this point more in the pages that follow. But for now, imagine a follower of Ronald Reagan who wants to achieve three core Reagan objectives. First, he wants to shrink the size of government. Second, he wants to simplify the U.S. tax system. Third, he wants to make sure that markets are allowed to be efficient.
What are the systemic challenges this Reaganite would face within the current economy of influence that is D.C.? What would block him, and his (Tea) Party, from their ends?
1. Making Government Small