“What’s the difference between the U.S. Congress and corrupt petty officials taking bribes at a Third-World border crossing? Only one of scale.” C H Smith
Corruption ceases to be corruption when it becomes the Status Quo; what was once recognized as corruption is seen as just another cost of doing business. Our political order is structurally corrupt: the key dynamic in every level of governance is favoritism and extortion.
Favors must be bought: those foolish enough not to spend freely on lobbyists and campaign contributions find their competitors have gained the upper hand by buying favors such as tax breaks, federal subsidies, no-bid contracts, cost-plus contracts, backroom deals, regulations that exclude competition and so on.
Politicos must extort campaign contributions from the maximum number of supplicants seeking favors to maintain their perquisites and power.
Here’s how the system works.
There was much mainstream media hand-wringing and outrage in response to corporations moving their place of business offshore to lower their taxes. This outrage is completely misplaced–and indeed, seems designed to misdirect attention away from the systemic corruption that is the beating heart of the American political order.
Let me explain how favoritism becomes the Status Quo. There are two key dynamics at work.
1. Onerous, uncompetitive taxes and/or regulations. The U.S. corporate tax rate is 35%, the highest in the world, and various observers estimate the average state corporate tax tacks on another 4.1% for a total corporate tax rate of 39.1%. Continue reading