Today’s Wall Street Journal has a letter so insightful that I just have to copy it in full:
LETTERS
The Fine Congressional Art of Ox-Goring
What a surprise that the Journal editorial writers came so close but still missed the point of the threatened tax increase on private equity (“Assault on the Investor Class,” May 7). You stated, “There is no good rationale for this beyond the fact that Congress wants money and private equity funds have lots of it.” It is not Congress but congressmen (and senators) who want money. The way these solons get their money is by threatening to pass legislation that will gore someone’s ox. In order to protect his ox, the owner rushes to hire a lobbyist to show up, cash in hand, to make contributions to “friendly” legislators.
Let’s say that you and I are lawmakers. You threaten group A until they pay me to oppose you, and I’ll threaten group B until they pay you to oppose me. Together, we will drag this process out with committee meetings, public hearings, comment periods, and motions to cut off debate to give lobbyists time to mobilize “contributions.” We will also find opportunities to remain undecided on important issues (despite our large staffs of advisers and researchers) so that we can appear to be subject to influence by those representing the viewpoints and dollars of our “constituents.”
Now, how do you think this will work out for the private equity firms? Their lobbyists will visit all the important legislators who would oppose this tax increase. The vote will be close, but just in time, the tax increase will be averted (only to pop up again next session).
The Founders appear not to have anticipated this contemporary form of emolument, and the Constitution is powerless to check it. Legalized legislative bribery is likely the most corrosive form of corruption in our society today since it undermines our democratic institutions. This explains why Congress never seems to get anything done and why they agonize over every issue but take no action.
Personally, I don’t care how hedge fund profits are taxed. But I do care that the American people are fleeced by the “public servants” we send to Washington and to our statehouses to do the necessary work of the nation. As a prominent voice of reason in the public square, the Journal should explain to readers how Congress really works.
S.A. Laden
Tampa, Fla.
Mr. Laden has hit upon an important truth. Politics is often just a game of extracting money from people by the threat of legislation. This is another good reason why the powers of the government should be very narrowly circumscribed.
