Wider Message of Corruption Plague

December 12, 2008

By Chidem Kurdas

 

Illinois governor Blagojevich hogged the news headlines, but he has plenty of company across the country. Yesterday the New York Times had at least two other stories of new political corruption. Then there were press items digging up similar historical incidents.

 

Recent investigations in Massachusetts have resulted in charges against a number of office holders, including a state senator who was videotaped stuffing bribe money into her bra. Click for NYT  Another corruption tale of the day was the indictment of a judge-elect in New York. She and an associate were indicted for filing false documents and falsifying business records related to a donation to her campaign for judge in Manhattan Surrogate’s Court.

 

Political horse trading, of course, is endemic and enduring. The instances that lead to criminal charges are merely the most egregious examples. Mr. Blagojevich was extremely crude in more ways than one. He could have conducted his negotiations with more finesse and come out a winner, as Patrick Buchanan suggested on MSNBC.

 

This same political milieu created the government – the new one starting in January – that is now expected to save American automakers, shore up the financial system with hundreds of billions of dollars of bailouts and help millions of homeowners avoid foreclosure. All that means innumerable discretionary decisions, involving immense resources, to be shaped by politicians. To use a current metaphor from Boston, there’s going to be padding for lots of bras. 

 

It is hard to imagine a more vivid reminder of why government intervention in the economy should be kept to a minimum. It provides great opportunity for an army of operators who extract rents more subtly than the characters who’ve been caught on tape. The ones who know how to stay within the law siphon off a lot more than the hapless Mr. Blagojevich.  

2 Responses to “Wider Message of Corruption Plague”

  1. Big Red Says:

    I have always thought that corruption cases like Blagojevich tell us as much about government as case like Dreier tell us about the financial system. They are not irrelevant but they do not really tell us where the problems are. Nor do they tell us much about the proper roll for various institutions.

    see http://www.nytimes.com/2008/12/12/nyregion/12lawyer.html

  2. chidemkurdas Says:

    Fair enough. I’d point out that Dreier is a lawyer and his connection to one arm of the government must have facilitated his scheme. Still, the fact remains that there is plenty of fraud committed in the financial system or, for that matter, in general by private individuals. But you have a choice not to send money in response to an email message describing how you can make a million dollars by helping get Nigerian gold out of a bank vault! There is no adverse consequence to not sending the money. Whereas, people who do not pay a bribe to a public official often suffer adverse effects such as being denied a license or permit to engage in a business. The victims can’t just say no–they have to take extensive action to protect themselves, such as finding the right agency to complain, and risk even worse retribution if the perpetrator remains in authority. And the more power public agents have, the more the opportunity for such extortion.


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