How do we go about banning lobbyists?
A fellow WSO user brofessed that we, the USA should do the following.
- decrease moral hazard - ban lobbyists, political donations by non-persons, have term limits (3 senate, 9 house), and rules around politicians entering industry which one regulates after office (at least for a time), stop federal aid to all corporations, for profit and nonprofit
These aren't the great ideas we've never heard of before. If they're so great, why haven't they been put into action? How do we tear down the barriers that are preventing actions from taking place?
You're in charge of making this happen, start to finish. How do you do it?
if applicable, please eplain why you disagree with the following: ban lobbyists, political donations by non-persons, have term limits (3 senate, 9 house), and rules around politicians entering industry which one regulates after office (at least for a time).
I would imagine the lobbyists would lobby against banning lobbyists.
How do we solve this problem?
Hire more lobbyists for your side?
Eventually all lobbyists would all be too occupied lobbying against each other and themselves to either protect or remove lobbying, therefore they would not be able to lobby for anything else. Problem solved.
The lobbyists that would lobby against banning lobbyists would prove too much to overcome.
Never happens unless there's a complete overhaul of our government. IMO there are just too many low information/uneducated voters in the US that will vote whichever way the MSM tells them to, which will never be in the direction we'd need to go if we're going to get rid of lobbying.
This is a really popular idea but it's also not the answer and it's not that simple.
True, corporations lobby for special favors but they also lobby against over regulation - usually both at the same time. The average person in Nevada is simply not going to fight tooth and nail over a regulation that may affect peanut farmers in Florida, an oilfield worker in Texas, or a steel mill worker in Pennsylvania. You can get regulations that will really hurt a specific industry hard but just aren't a big deal for 95% of the country. Lobbying helps level the playing field and lets these groups have some kind of voice.
For example, see the American Peanut Council below and thousands more like it. Without lobbying, these sorts of groups become essentially voiceless in a very large democracy. Now, if they're asking for special favors, it might be a good thing to keep them voiceless, but if they're trying to protect themselves from hurtful clauses in the New Green Deal which could kill their industry, it could be very bad if they're voiceless.
https://www.peanutsusa.com/growers/139-peanut-growers-associations.html
Exactly. Lobbying is a check against an unhinged democracy and dangerous "populist" ideas.
Yup agreed. and just to add. If it wasn't for lobbyists, I think that there are a number of industries that just wouldn't exist anymore in the US or would be on the verge of death: oil & gas, chemicals, steel industry, existence of auto industry very debatable, insurance industry, and jeez gotta include ourselves in financial services. If it wasn't for lobbyists, this industry would look a lot worse post-2008, likely a lot of us would not be employed if the masses were allowed to pass the regulations that they wanted back then.
And again, let me say that all of these industries lobby for special favors as well, but we certainly wouldn't be better off either if all these industries had no voice and were just crushed out of existence by a majority of citizens who know little about them and care even less about their existence.
This is a fair point. Lets dive deeper. There's a reason people hate lobbyists. It probably has to do with the politicians, but it might not. (Maybe the politicians who only care about money and not the interest of the people being lobbied to are the problem?)
If lobbyists are the sole problem, how can we mitigate the negatives while keeping the positive?
Lobbyists are good for a million reasons. It’s usually just naive kids and uneducated adults that say things like “ban lobbyists.”
I said it, maybe I am a naive kid (idk if you can be a kid if you're over 30 though), and yeah maybe I am uneducated. my point is this - so long as you have politicians interests not focused on the betterment of society but instead on getting campaign financing via sweetheart deals (like why tf is milk in every school cafeteria? the milk lobby. why is sugar/HFCS in everything? lobbyists), you have a problem.
this it not about silencing voices, this is about ending corruption. maybe I'm off on lobbying and it's more complicated than I'm giving credence to, maybe my idea of banning campaign donations by non-persons (i.e. all PACs) will remove the incentives as [Milton Friedchickenman] alluded to, idk, but if you disagree with removing moral hazard from politics, then I think it's best we agree to disagree.
Cool topic because I was wondering about this... why are lobbyists so bad in theory? Or is it just In application / execution?
In my opinion they are good in theory as amplifiers and people who can be familiar with the political process without being elected... some more hard set rules regarding corruption and public disclosure would make me more comfortable e.g. all communication between lobbyists and elected officials must be documented and reviewed by insert federal anti corruption agency and/or released redacted to the public and if it’s a shitty documentation then people can get mad and point fingers so absence of info is bad too, which is a good thing for da people
It makes sense to me that corporations don’t get involved in the political process but I’m fine with individuals. Rich people should and do have more influence than the rest and it’s not for no reason- but seeing how little they actually donate (say hundreds of millions) and the trillions in payouts is uncomfortable for sure. However, who’s to say those payouts would be different and to what extent it those donations weren’t as high if that money was spent in other influence (advertising, paying protestors, etc)
Well there’s an obvious reason why we need lobbyists.
this country has thousands of unique industries, each requiring thousands of rules and regulations to function correctly. Industries are complex and constantly changing, which makes it extremely difficult for an outsider to make appropriate laws without being involved in the day to day Operations and understanding what drives decision making.
to give a made up example:
imagine a bank trading trading some complex esoteric product like a 30y fed funds swaption. Who is going to decide the appropriate amount of margin that must be held as collateral? Some random person at the cftc who has never been in the market or traded themselves? It would be impossible for them to figure out the correct amount, and an incorrect amount would potentially be a burden and make things less efficient. Now multiply this 1 regulation by the thousands of needed regulations just in finance alone
It’s incorrect to think businesses always just want complete deregulation, in the example above , the banks would want an appropriate amount margin held as collateral. It just makes more sense for an association of experts from Citi/jpm/gs/baml to determine the optimal amount and lobby for it
I'm the one that said ban lobbyists in the thread OP mentioned, so wanted to offer my thoughts
maybe I'm a bit of an anarchist, but in your example, I'd want the risk to fall on the banks. I think you regulate it enough so that consumers with deposits at the bank aren't going to be wiped out, but beyond that the bank should bear the risk and therefore should regulate itself, and if they fuck up, they should pay the consequences for poor risk control.
when I'm saying ban lobbyists, I can see why that'd be harmful if taken literally. as much as I want banks to bear the risk of prop trading and complex products, some oversight is needed to ensure the FDIC isn't going to be fucked in the event of another 1983 type event, so I do think their voices should be heard, what I am adamantly against is having industry grease the pockets of lawmakers through PACs, lobbying, fellatio, whatever, I just want money to get out of the equation
Lobbyist equals corruption. No country needs such a system.
Similique laudantium repellendus est ducimus architecto voluptatem atque. Velit laboriosam nobis nobis sed dolore. Et ea repudiandae blanditiis dolorem delectus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...