Intellectual Ventures ramps up lobbying in face of new legislation
usatoday.com
usatoday.com
What does this mean exactly, and how is this different from bribery and corruption?
Lobbying involves a ton of leg-work and that's not free.
Why is it wrong for an environmental group to be able to draft a proposed law to give legislators something concrete to work with? Why is it wrong for an industry organization, which usually knows way more about the specific industry than the lay public, to educate legislators about their industry? Why is it wrong for a rich person to buy media time to convince voters of his views?
These activities aren't inherently wrong. They're not inherently corruption. We might not like the consequences resulting from these activities. Often, we just don't like the people engaging in these activities. But as long as they're directed at convincing people (either voters or politicians), as opposed to giving out personal benefits, these activities aren't corruption.
It isn't in the public interest. When it is in the public interest it is only incidental.
> as opposed to giving out personal benefits
But that happens a lot. Campaign contributions, securing lucrative post-public-service jobs on K-Street or elsewhere, etc.
This would be true if lobbying didn't give such good ROI: a few million for lobbyists can yield hundreds of millions or more in tax breaks, government contracts, or otherwise profitable policy.
Now, I'm obviously not arguing that lobbyists don't get paid enough. Rather, I'm pointing out that you need to use your head before taking Lessig's 600-2200% return on lobbying dollars claims at face value. If lobbying firms offered that kind of return, then lobbying firms would make a lot more money. As it is, a trader or hedge fund professional that makes low-doube digit returns can pull in as much as the total lobbying revenues of a top lobbying firm.
From wikipedia:
A study by the investment-research firm Strategas which was cited in The Economist and the Washington Post compared the 50 firms that spent the most on lobbying relative to their assets, and compared their financial performance against that of the S&P 500 in the stock market; the study concluded that spending on lobbying was a "spectacular investment" yielding "blistering" returns comparable to a high-flying hedge fund, even despite the financial downturn of the past few years. A 2009 study by University of Kansas professor Raquel Meyer Alexander suggested that lobbying brought a substantial return on investment.
From the second article abstract mentioned in that excerpt:
In this paper we use audited corporate tax disclosures relating to a tax holiday on repatriated earnings created by the American Jobs Creation Act of 2004 to examine the return on lobbying. We find firms lobbying for this provision have a return in excess of $220 for every $1 spent on lobbying, or 22,000%.
From articles writing about the first study mentioned in the excerpt: As the chart on the right shows, the firms that leaned most heavily on lobbyists have outperformed the S&P 500 by a whopping 11 percent per year since 2002.
The outright return on lobbying costs, according to one of the various studies that served as inspiration for the Strategas index, was $220 for each $1 spent.
If lobbying yielded 2,200% returns in a predictable way, the entire industry would be a heck of a lot bigger than the $3.5 billion a year it is today (which sounds like a lot of money, but is a pittance compared to how much money is spent by corporations on things that yield a lot less than quadruple-digit returns!)
That would be consistent with high-ROI but limited revenue in lobbying.
I'd totally go work for them if they weren't backed by one of the worst corporations on the planet.
They have something like 50,000 patents, only a very small fraction of which they came up with internally, most were bought.
IV hasn't gone after the little guys yet, so I find the Lodsys-type guys a lot scarier.
Digging around, the only connection I could find was IV selling Lodsys some of its patents. Not much evidence for an actually connection, much less shell game.
No, in a perfect world this company wouldn't exist at all, and its founders would be jailed for racketeering. In our imperfect world these thugs claim they are a "legitimate business".