30 May 2012

Interplay between Big Scandals and Small Scandals

EconLog | Arnold Kling | The Energy Loan Scandal as a Non-story

Mark A. Thiessen writes,
as Hoover Institution scholar Peter Schweizer reported in his book, "Throw Them All Out," fully 71 percent of the Obama Energy Department's grants and loans went to "individuals who were bundlers, members of Obama's National Finance Committee, or large donors to the Democratic Party." Collectively, these Obama cronies raised $457,834 for his campaign, and they were in turn approved for grants or loans of nearly $11.35 billion.
If our political digestive system were functioning properly, it would vomit out the energy loan program and the people responsible. There would be daily front-page headlines in the newspapers. Congressional hearings would feature harsh attacks by Democrats as well as Republicans and be carried live by all major news channels. Steven Chu would be as generally reviled as Bernie Madoff. There would be a special prosecutor operating and talk of impeachment.

Instead, this has produced among left-of-center politicians and pundits little concern, much less outrage. My fear is that what will emerge is a pattern in which Republican scandals are ignored by the right and Democratic scandals are ignored by the left. The result will be a spiral of ever-worsening corruption.
Some corollary predictions:

(0) I think there is a subject-matter dependency which impacts what people are willing to ignore in addition to an ideological factor. Some people will simply never care about DOE loan guarantees because anything that sounds financial goes right past them. Some people will never care about cops kicking people's skulls in because they see the cops as being on their side.

(1) This trend will benefit politicians further out on the ideological distribution because they will be best positioned to be able to count on a significant number of voters ignoring their own corruption. That is, the politicians best suited to this new environment will be the ones who have the largest proportion of people voting for them who are willing to ignore scandals committed by their teammates.

(2) Both parties will come down hard on minor but non-ideological corruption, e.g. the $800k GSA shindig in Las Vegas. The Red Team gets to criticize the Obama administration for being wasteful, and the Blue Team gets to shift focus away from cronyism that is orders of magnitude more wasteful while still being able to claim they are cracking down on corruption.

The same applies to the Secret Service prostitute thing. Do I want them banging hookers over-seas? Of course not. But this is a country where our police routinely — routinely! — shoot first and ask questions later, where cops can kill your dog without provocation, where there is literally zero accountability for homicidal misconduct, where having a camera or voice recorder is treated as a crime, where police can knock down your door in the middle of the night by mistake and hold you responsible, where the police answer only to themselves, and where the highest judges in the land shrug and assure us that it's all okay because the thugs are "professional!" In that context how can anyone muster outrage about some cops knocking down a few Colombian harlots? But nobody in power benefits from dealing with the bigger problem, and so they throw fits about the trivial one to give themselves cover.

(3) Issues totally unrelated to corruption will also be increasingly used this way. Congressmen will busy themselves with investigations into baseball players' steroid use to distract themselves from having to address actual problems. Just one more reason to tell them to stick to their knitting.

(4) Fraud begets fraud. If there is one big scandal in DC it is hard to ignore. If there are seven overlapping scandals it is easy to claim that the one perpetrated by your friends is small beans, and the real story is that scandal over there in the other guys' camp. Slippery-slope arguments are often misused, but I think this is one of the times in which a real positive-feedback loop exists.

PS The extra irony in the proposals from both teams to deal with the GSA situation is that their suggested reforms will result in more waste. For example, there were (are?) proposals to shutter the GSA and let each agency handle its own purchasing, motor pool, real estate, etc. I'm usually all in favor of razing Federal agencies, but what's the benefit if the function is just going to be done in fifty places instead of one place? This will decrease efficiency (duplication of work; different agencies bidding against each other for office space) and decrease oversight (if some part of one centralized group wastes money on galas, why would we expect that two dozen different groups would not do the same?). What's the advantage here beyond being able to say you did something?

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