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<font face="Verdana" size="1" color="#002864">http://www.mises.org/fullstory.asp?control=1346</font>
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<font size="2"><font face="Verdana" color="#002864" size="5"><strong>Why Politicians Sell Out</strong></font>
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<p class="MsoNormal"><font face="Verdana" size="4">by T. Norman Van Cott</font>
<p class="MsoNormal"><font face="Verdana" size="2"><img alt src="http://www.mises.org/images3/janus.gif" align="right" border="0" width="231" height="224">[Posted
October 9, 2003]</font>
<p class="MsoNormal"><font face="Verdana" size="2">Thirty-six years as an
economics professor has left my office walls lined with overflowing
bookshelves. Included on my shelves are the 1974, 1978, 1981, and 1985
membership directories for the American Economic Association (AEA). Dated
membership directories, even for flagship organizations like this one, figure
to be irrelevant. Not in this case, however. They offer an interesting example
of"beltway conversions"—to wit, U.S. congressmen and senators
becoming more tolerant of government excess once they become ensconced within
the Washington D.C. beltway.</font>
<p class="MsoNormal"><font face="Verdana" size="2">The example revolves around
former Texas congressman and senator, Phil Gramm. First elected to the House
of Representatives in 1978, then to the Senate in 1984, he retired from the
Senate in 2002, having made a brief run for the Republican presidential
nomination in 2000. As many probably know, Gramm's pre-Beltway
incarnation was as an economics professor at Texas A and M University (from
1967 to 1978). He earned an academic reputation for insightful analysis of
private property and open markets as engines of economic progress.</font>
<p class="MsoNormal"><font face="Verdana" size="2">Gramm had biographical
entries in each of the above AEA membership directories, after which his AEA
membership apparently lapsed. Our focus is on the research agenda Gramm
included in his 1974 and 1985 biographical entries. The two entries correspond
to Gramm's pre- and post-Beltway incarnations (he indicated no research agenda
in 1978 or 1981). To avoid question, I repeat the two entries in their
entirety, highlighting the research agenda. First the 1974 entry: </font>
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<td><font size="2" face="Verdana">GRAMM, William P., academic;
b. Columbus, Ga., 1942. Educ. B.B.A., U. of Georgia, 1965;
Ph.D., U. of Georgia, 1967. Doc.Dis. Constant Taste and the
Theory of Demand, 1967. Fields 300, 040, 720. Pub."Wage
Rates, Transactions Costs, and the Demand for Money," Amer.Econ.
Review, 1973;"The Real-Balance Effect in the Great
Depression," Jour. Of Econ History, 1972; "The Stock
of Money and Investment in the U.S., 1897-1966," American Econ.
Rev. 1969. Res. How to Get Rid of Govt.,
Cur. Pos. Prof. of Econs., Texas A and M U. since 1967. Address
Texas A and M Univ., Dept. of Econs., College Station, TX 77843. (emphasis
added) </font></td>
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<p class="MsoNormal" align="left"><font face="Verdana" size="2">Note Gramm's
1974, pre-Beltway research agenda. A professor at a major state university
researching how to get rid of government should encourage all with a
libertarian bent. We can only speculate what media pundits would have done
with this had Gramm's presidential candidacy become more serious. Maybe he
could have said he"never inhaled the heresy," huh? Anyway,
what's important for our purpose is that the research agenda did not survive
seven years within the Beltway. His entry in the 1985 directory was:</font>
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<p class="MsoNormal"><font face="Verdana"><font size="2">GRAMM,
W. Philip, 4201 Yuma St. NW, Washington, DC 20016. Phone:
(202) 225-2002; Home (202) 362-5541. Fields: 300, 040. Birth
Yr. 1942. Degrees: B.B.A., U. of Ga., 1965; Ph.D., U. of
Ga., 1967. Prin. Cur. Position: U.S. Senator, 1985. Concurrent/
Past Positions: U.S. Congressman, 1979-1984; Prof. of Econs.,
Texas A. & M. U., 1967-78. Research: Balancing
the Federal Budget. (emphasis added)</font> </font>
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<p class="MsoNormal"><font face="Verdana">Alas, instead of trying to figure
out how to slay the government monster, Gramm had metamorphosed into trying to
figure out how to feed it with tax dollars instead of printing press or debt
dollars. Gramm's conversion admittedly was not end-of-spectrum to other
end-of-spectrum. But going from something that smacks of a healthy dose of
libertarianism to the pedestrian objectives of country-club Republicans
represents significant movement across the spectrum. </font>
<p class="MsoNormal"><font face="Verdana">Why Does It Happen? </font>
<p class="MsoNormal"><font face="Verdana">Beltway conversions like Gramm's
occur all the time. Nevertheless, political analysts and politicians are
clueless when it comes to explaining them. Some media commentators playfully
attribute Beltway conversions to the"water" or"air" in
Washington D.C. This is little more than cluelessness hiding behind humor.
Cluelessness plus arrogance describe those left-leaning pundits who credit
Beltway conversions to politicians'"personal growth." That is,
you're"growing" when you espouse positions I espouse. </font>
<p class="MsoNormal"><font face="Verdana">A January 21, 2003 Wall Street
Journal op-ed by Georgia senator Zell Miller offered another clueless
perspective. Miller ascribed the phenomenon to congressional and senatorial
memory lapses. As Miller put it, limiting government spending is"…..often
mentioned on the campaign trail, but amnesia strikes as soon as the candidates
win and get inside the Beltway." While more scathing than water/air
explanations, Miller's perspective is equally clueless. </font>
<p class="MsoNormal"><font face="Verdana">In fact, Senator Miller's hollow
effort is a subset of a larger class of explanations that I call the
"Jimmy Stewart" theory of government. Namely, the only way to avoid
government failure is to have people like the Jimmy Stewart character in the
old movie,"Mr. Smith Goes to Washington" in office. You know, good
people do good things, and bad people do bad things perspective. End of story.
High sounding? Yes. Emotionally satisfying? For many. Applicable
this side of the Garden of Eden? No.
</font>
<p class="MsoNormal"><font face="Verdana">What About Incentives? </font>
<p class="MsoNormal"><font face="Verdana">More prosaic, but essential to
explaining these conversions, is an understanding of the incentives that
confront Beltway politicos. The fact is that U.S. federal tax institutions
give Americans powerful incentives to pick the pockets of their fellow
citizens in other districts/states. I live in Indiana. Who, pray tell, antes
up the millions upon millions of dollars in federal spending in Indiana? The
short answer: Hoosiers don't! </font>
<p class="MsoNormal"><font face="Verdana">Indeed, non-Hoosiers pay virtually
all the bill for the simple reason that six million Hoosiers account for a
miniscule percentage of all Americans. It follows that Hoosier congressmen and
senators have powerful incentives to load Hoosier plates to overflowing with
federal programs. Why not, someone else is paying. Indeed, an important
yardstick by which Hoosiers measure their congressmen and senators is how much
"federal bacon" (fat or lean, it makes no difference!) they
bring home.</font>
<p class="MsoNormal"><font face="Verdana">Ditto for Americans in other states
and other congressional districts; they face the same incentives. In
effect, U.S. fiscal institutions offer incentives to those in Congress to be
cross-state and cross-district pickpockets. Is it unfortunate that we
all end up pickpocketing each other under the aegis of Uncle Sam? Yes.
Theft decreases national wealth. Is it surprising? No.
</font>
<p class="MsoNormal"><font face="Verdana">There was a time, of course, when
there was less, much less, cross-state/cross-district pickpocketing. This was
when there was a de facto constitutional mandate that severely limited
activities of the federal government in terms of both ability to tax and
ability to spend. Many scholars argue that the undermining of this mandate
began with the conclusion of the Civil War.
</font>
<p class="MsoNormal"><font face="Verdana">Regardless of when Americans stepped
out on to this slippery slope, however, it means that remedies for government
failure must be radical in nature. Wishing and waiting for an"army"
of Mr. Smiths or pre-Beltway Phil Gramm thinkalikes to arrive in Washington
D.C. is naïve. Better public-sector outcomes must wait not upon better people
but upon a better system that does not permit some to live at others' expense.</font>
<p class="MsoNormal"><span class="338231413-09102003"><font face="Verdana">____________________________</font></span>
<font face="Verdana">T. Norman Van Cott is a professor of economics at Ball
State University in Muncie, Indiana. Send him </font><font face="Verdana">MAIL</font><font face="Verdana">.
See his Mises.org </font><font face="Verdana">Articles
Archive</font><font face="Verdana">.
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