Monday, February 13, 2012

Too much money in politics? Here's how to fix it!

In a recent blog post (above) Robert Reich complains about Obama's support of a Super PAC formed to help him win re-election, while also lamenting money in politics in general. Instead of the "people" having a say, in Mr. Reich's words it will just be "... a relative handful of super-rich Democrats (who) want (to) fight a relative handful of super-rich Republicans. And we call this a democracy"

Mr. Reich's complaining ring's hollow though, since his calls for more government involvement will only increase the spending on elections by big business and wealthy individuals (not that there is anything fundamentally wrong with big business/wealthy people donating to campaigns). The reason is that government involvement and regulation lead to rent seeking opportunities galore, and businesses will do everything they can to make sure that the regulations being created work for them. One way they do this is by donating a lot of money to the people making the regulations. The best way to get money out of politics is to shrink government and eliminate rent seeking opportunities. If the government is only doing the things government needs to do (basic safety net, infrastructure, defense) businesses will find that their money is better spent elsewhere, like in real investments that will help expand the economy.

So if Mr. Reich really wants to get money out of politics he needs to join the call for less government and less regulation of the economy. Only by eliminating the incentives for businesses and wealthy people to donate will we get money out of politics.

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