They come for the politics, but stay for the money; Washington transforms political believers into members of the get-rich club

August 11, 2013 6:58 pm

They come for the politics, but stay for the money

By Jacob Weisberg

Washington transforms political believers into members of the get-rich club, says Jacob Weisberg

It’s a funny thing about Washington: everyone complains about it, but no one ever seems to leave. Take former House leader Richard Gephardt. The Missouri Democrat twice ran for president as a voice of organised labour. Today he pockets $7m a year to lobby on behalf of corporate clients and advise them on busting unions. Or consider former journalist Jeffrey Birnbaum, who used to write exposés of the lobbying trade for The Wall Street Journal. Today he works for Haley Barbour, Mississippi’s Republican former governor who is now one of the most influential lobbyists in Washington.Such fables of political principles discarded, betrayed or rented by the hour fill the pages of Mark Leibovich’s alarming and amusing new book This Town . Mr Leibovich captures the Gilded Age atmosphere of a capital where influence has been commoditised and marketed as never before. It is a gallery of rogues – some charming, some merely roguish – who flourish as the capital’s fundraisers, fixers, party-givers and talking heads.

These people come together in a mutual advancement society where personal beliefs are no obstacle to green room friendships – like the one between gay marriage advocate Hilary Rosen and Biblical literalist Ralph Reed, a conservative political activist.

Mr Leibovich has little to say, however, about elected Washington, which has trended in precisely the opposite direction in recent years.

This other town is characterised by inflexible ideology and irreconcilable conflict.

The recurring hostage drama around the federal budget and debt ceiling is driven by zealots whose mission is to cut Washington spending down to size – the only debate they want to have is whether that size should be the levels of the 1950s, the 1920s or the 1820s.

Official Washington has precisely the opposite flaws of unofficial Washington: it is too stubbornly principled, too preoccupied by corruption and too contemptuous of those it disagrees with.

This Washington is well depicted in another recent book, Do Not Ask What Good We Do by the journalist Robert Draper. On issues such as climate change and immigration, the Tea Party caucus portrayed by Mr Draper believes that the act of searching for a solution itself constitutes a problem.

These patriotic anarchists refuse to accept the basic legitimacy of laws and decisions they disagree with, whether President Barack Obama’s health reform or court rulings upholding legalised abortion. They filibuster to prevent anyone ever filling posts overseeing the enforcement of gun laws or environment regulation. And, as we are about to experience once again, they also are prepared to shut down the entire federal government if they do not get their way. They do not think anyone will miss any of it, except for the Pentagon.

These two contradictory Washingtons are both correct about one thing – each other. Official Washington is on the mark in its contempt for the city’s parasitic class, which cares about nothing and inflates the cost of everything Washington does. Unofficial Washington is accurate in its view of the Tea Party as nativist yahoos who do not appreciate that democracy requires dealmaking and compromise.

Yet rather than being on a collision course, these two Washingtons have become curiously symbiotic. The Tea Party makes sure there is no shortage of political ranting to fill the cable channels. Young Congressional staffers, meanwhile, see profitable futures at lobbying firms after a few years on government salaries.

By a magical process of acculturation, Washington transforms true believers into members of the stay-and-get-rich club. Half of former senators, and nearly as large a share of former House members, remain as lobbyists after leaving office.

What drives this process, to which both parties are subject, is the dazzling amount of money to be made in the neighbourhood of politics – as long as you do not work for the government.

The biggest change in Washington over the past 30 years is that social status there used to depend more on proximity to power than upon wealth. This was not necessarily a superior value system, but it did create a distinctive culture in which the city’s richest people were not treated as its most important people. Now Washington is America’s wealthiest city and has the same value system as every other.

Mr Leibovich and Mr Draper offer little by way of ideas how to fix the metropolis they depict so damningly.

It is not clear there is any way to fix it. Official Washington’s problem is primarily structural: state-level gerrymandering produces 30-sided congressional districts that favour extremists over moderates. Unofficial Washington’s problem is ethical; an older conception of public service has given way to the pursuit of wealth and personal advantage.

The result is a double knot of dysfunction that will not be untangled anytime soon.

The writer is chairman and editor-in-chief of the Slate Group

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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