One reason why Washington keeps getting bigger is that so many business people are willing to throw their competitors under the government bus. The Washington Post today describes how a major lobby group representing small banks cut a secret deal with Rep. Barney Frank to not oppose his big-government financial bill if it excluded small banks from regulations and shifted $1.5 billion in annual fees from them to the big banks.
We saw a similar jockeying of lobbyists with the Obamacare health bill, and we see it with legislation on the agenda right now. With the Internet tax bill before Congress (the Marketplace Fairness Act), giant Amazon has switched sides to support expanding online sales taxes, and thus throwing smaller retailers and consumers under the bus.
With corporate tax reform under discussion, all firms want a lower rate but some firms not targeted by base broadening seem willing to throw those that are under the bus. The problem is that some of the proposed base broadening is bad policy, so legislation could end up making road kill of economic growth.
What about the ethics of all this? It’s appalling to see how bad legislation like Dodd-Frank gets passed on the strength of special-interest payoffs. But lobbyists—such as the head of the small-bank association profiled by the Post—surely think that acting in the interests of their members is the ethical thing to do.
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