In this interview, Peter Schweizer, author of Throw Them All Out, reveals how deep corruption goes within the political process, specifically with targeted investing by insiders. It has grown to such a degree that he now describes “political intelligence” as a big growth industry. That’s when insiders receive compensation from hedge funds and large investors for revealing secrets.

Think about this, for example. In the United States now, the city with the highest per capita income in America is Washington, DC. They passed Silicon Valley last year. Seven of the ten wealthiest counties in America are counties that border Washington, DC, so government has become big business. There’s a lot of money to be made. And not only is that leading a lot of young and talented people into influence-peddling in industries where I’d rather have them doing something more productive, it’s also changing the entire incentive structure. We know for example now that if you look at hedge funds, hedge funds that invest in lobbyists and make a lot of campaign contributions actually consistently outperform those hedge funds that don’t. It’s not because they’re smarter – it’s because they’re getting access to information in terms of legislation or trends that gives them a leg up. So I think that’s extremely troubling, and it’s distorting the entire nature of our free-market economic system.

If you would prefer the entire transcript, you can read it here, courtesy of Casey Research.