Too much money, too much government

As political system decays, power of money explodes

August 26, 2010|By Ron Smith

I was going to write about the primary election results this week, but they're probably not all that important in the big picture. Some establishment candidates won, some insurgent candidates won, and money played a huge role in the results.

Arizona's John McCain spent nearly $22 million to win renomination for a fifth U.S. Senate term, and Republican Rick Scott, a health care entrepreneur, spent a reported $50 million, mostly from his own riches, to get the GOP nomination for governor of Florida.

As in late Rome, the very rich are the ones seeking high office. Former Hewlett Packard CEO Carly Fiorina and eBay's Meg Whitman spent scads of their own money to win Republican primaries in California earlier this year, as did Linda McMahon of World Wrestling Entertainment fame. She spent more than $20 million of her own money to gain the Republican nomination for the U.S. Senate in Connecticut.

That this isn't a sign of a healthy polity is an understatement.

The greed for political power must be a strong, narcotic-like thing. New York City Mayor Michael Bloomberg persuaded the City Council to end the two-term limit on holding that office, coughed up more than $100 million of his own fortune, and narrowly beat a little-known Democrat with a tiny war chest. Admittedly, this is a drop in the bucket for the diminutive billionaire, but again, it's not a good sign.

As the system decays, the power of money explodes. Todd Purdum writes in the current Vanity Fair about how broken Washington is and how this has made President Barack Obama's job one vastly different from even his recent predecessors — and much more difficult.

The theme is to exonerate the current president from blame for the bad things that are happening, but to read the results of Mr. Purdum's reporting is to understand a little bit more about how things have gotten pretty grim in the game of governance.

In essence, the government has grown too big to be effectively managed by anybody. Neither this president nor any other can cope with the job.

Take lobbying, for instance. The tens of thousands of lobbyists in Washington spent $3.5 billion influencing legislation last year. The government has grown so big and so powerful that any business, trade group, labor union or any entity affected by it must spend lots of money to either directly benefit from legislation or at least not be crushed by it. We're dealing with legalized bribery. That's how the notorious former lobbyist Jack Abramoff described the system he exploited. He should know.

The result is grotesque: Bills are passed that are so large, so dense, so laden with special favors that they can't be read by normal human beings, or even by elected representatives of the people. Sen. Max Baucus, a Montana Democrat and a leader of the effort to pass health care reform, admits he's never read the bill passed into law this year. He says they have "experts" to do that.

House Speaker Nancy Pelosi memorably said, "We have to pass the bill so you can understand what's in it." It passed, but it also passeth all understanding. No one, for example, knows how many new federal agencies will be created by it. It could be 159, but that's just an estimate.

Meantime, the economy remains in a ditch. Stock market investors don't know what to do, and the small fry are exiting that game. There are concerns that the bond market, into which investors have poured trillions, may be the next bubble to burst. Consumers are in a vise.

Gretchen Morgenson of The New York Times wrote this week about how consumers are tapped out three years after the borrowing bubble burst. Citing a new Federal Reserve Bank of New York report, she tells us that "an astonishing $1.3 trillion of consumer debt is delinquent." Despite frantic attempts by consumers to shrink their debt load, they are learning painfully that while the value of assets can plummet quickly, it takes a long, long time to reduce the debt incurred to buy them.

There is no economic recovery. There will not be a return to the halcyon days of yesteryear in which American consumers drove the world economy by buying things they couldn't afford with money they didn't yet have.

That game is over, but government hasn't yet come to grips with it.

Ron Smith can be heard weekdays, 9 a.m. to noon, on 1090 WBAL-AM and WBAL.com. His column appears Fridays in The Baltimore Sun. His e-mail is rsmith@wbal.com.

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