A breezy new little book called “Size Matters: How Big Government
Puts the Squeeze on America’s Families, Finances and Freedom,” by Joel
Miller provides a great snapshot of what Americans should have in mind
in the midst of the current wave of scandals in Washington and calls
for lobbying reform.
The book is filled with anecdotes showing, clearly and simply, the
inverse relationship in runaway growth in laws, regulations, and taxes
_ allegedly passed for our benefit _ and the ability of businesses to
grow and provide new and affordable products. Or in the ability of
Americans to afford core necessities such as buying a home or saving
for retirement.
Particularly timely, given the current
environment in Washington, is Miller’s discussion about the
Sarbanes-Oxley Act of 2002, passed and signed into law in the wake of
the Enron and WorldCom scandals.
Sarbanes-Oxley was another case
in point that it is inconceivable to politicians that free people, when
left alone, can simply learn from their mistakes. Those who commit
crimes go to jail, and the rest of us, businesses and consumers, can
read about what happened and avoid making similar mistakes (e.g., don’t
put your life savings into one stock). Change and improvement can take
place cheaply and efficiently.
But, under such a scenario, how
can our senator or congressman be a hero? No, they must pass new laws
to demonstrate that they are indeed manning the ramparts, ready to
deliver new solutions for making a better world.
Of course,
this better world somehow always winds up with government even bigger
than it was before, with new laws, regulations, and costs.
Miller points out that Sarbanes-Oxley will cost large firms about $5
million on average in new compliance costs, with auditing costs going
up around 50 percent. Small firms are seeing their auditing costs
doubling and tripling.
Furthermore, as result of this law,
private firms are having second thoughts about going public and having
to submit to the regulatory nightmare. As result of staying out of the
capital markets, they forego new growth opportunities, which
translates, for us simple folks, into jobs.
Sarbanes-Oxley put
new criminal offenses on the books, adding to the four thousand that
are already encoded. The total number of federal crimes enumerated in
our Constitution, we learn in this little book, is a grand total of
three.
Bottom line: One American does something wrong and the
rest of us pay the price forever. That is, all of us except the
politicians who have even larger fiefdoms to oversee and lawyers and
accountants who have more laws requiring compliance and opening the
door for more litigation.
Miller quotes former Senator Phil
Gramm at the time Sarbanes-Oxley passed saying, “In the environment
we’re in, virtually anything could have passed the Congress.”
Do you get the feeling we’re getting ready for more of the same?
After reading the statistics Miller quotes, any sane person will click
off the next self-righteous political spiel about lobbying reform. In
the 1920’s there were 400 lobbying organizations in Washington. By the
1990’s there were 10,000. Today, 35,000 registered lobbyists roam the
streets and halls of Washington _ about 65 for every senator and
congressman.
Let’s not forget that a good chunk, and among the
most lucratively compensated, of this lobbying corps are ex-senators
and congressmen. Last time I checked, I found that around 40 percent of
members of Congress never return home; many set up shop in the nation’s
capital to rake in the big bucks playing off the contacts they have and
their intimate knowledge of the town.
Our problem is the size
and scope of government. Period. New laws about who can talk to whom
and when and who can buy whom lunch are a joke. They’re cosmetics that
simply redirect behavior and change absolutely nothing.
According to the latest Harris polling, Americans are indeed dubious
that changing lobbying laws are going to make any difference. About 75
percent respond that new laws won’t make any difference. Eighty-six
percent think the type of behavior to which lobbyist Jack Abramoff
pleaded guilty typifies Washington lobbying behavior.
What are the political implications here?
Republicans should pay close attention. According to investment advisor
Don Luskin, a Wall Street Journal/NBC poll done last December polling
voter preference for which party should control Congress now shows a
stronger preference for Democrats (46 percent prefer Democrats; 38
percent prefer Republicans) than the same poll, taken in October, 1994,
before the Republicans wrestled control of Congress away from
Democrats, that showed 44 percent favored Republicans and 38 percent
favored Democrats.
I think Republicans retain an advantage in
that there are at least some who want to cut back government. Size does
indeed matter and Americans should settle for no less than change that
is real and that is substantial.
(Star Parker is author
of “Uncle Sam’s Plantation: How Big Government Enslaves America’s Poor
and What We Can Do about It” and president of CURE, Coalition on Urban
Renewal and Education, www.urbancure.org.)
