WSJ: The burgeoning “political intelligence” industry

posted at 4:41 pm on January 18, 2013 by Erika Johnsen

This perfectly encapsulates one of the many prices we are all now collectively paying for an ever-expanding and intrusive federal bureaucracy: That it can now be more worthwhile for businesses to divert serious time, money, and resources into pursuing “political intelligence” at the opportunity cost of dedicating those efforts to providing a better, more efficient, and competitive product for consumers. A pathetic spectacle, to be sure.

Today’s WSJ has a report on the SEC’s investigation of the “political research firm” Marwood Group, and on how, although there’s no evidence out there yet for technical wrongdoing, the investigation is shedding light on what is becoming an increasingly profitable and potentially shady industry:

… But emails subpoenaed in the inquiry, some of them reviewed by The Wall Street Journal, open a rare window into a burgeoning business known as political intelligence, in which firms gather information and analysis about activities in Congress, the White House and federal agencies and sell these insights to investors looking for an edge.

A look at Marwood shows how one leading player in this field—an industry that operates with little regulatory oversight—managed to distribute prescient information about a future government decision that ended up sharply moving a stock. …

The political-intelligence business has expanded rapidly over a decade as government decisions have come to play a growing role for some on Wall Street. Investors spend more than $400 million a year for such intelligence, according to Integrity Research Associates, which follows the research industry. Its founder, Michael Mayhew, said hedge funds tell him the “single largest source of gains for them has been what’s going on in Washington.”

Obviously, the Obama administration didn’t start the trend of a metastisizing federal government that everyday introduces onerous new regulations, further convolutes the tax code, or somehow finds a way to meddle with free-market signals. Companies have been hiring political consultants and trying to get in bed with administrations for ages, but these types of sketchiness and costly wastes of productivity are only going to get more rampant as ObamaCare comes into its own. The more the government gets involved, the more worthwhile it is to spend your private-sector time staying ahead of the political game.

In that same cronyish big-government vein, as I’ve said before, the Obama administration loves business, and they love to be loved by business — it’s the free markets on which they aren’t so keen. All of those ostensible “top-down economics” the president is so fond of lamenting wouldn’t be possible without lots of federal enabling:

Big business, many Republicans believe, is often complicit with big government on taxes, spending and even regulations, to protect industry tax breaks and subsidies — “corporate welfare,” in their view.

“One of the biggest lies in politics is the lie that Republicans are the party of big business,” Ted Cruz, a new senator from Texas and a Tea Party favorite, told The Wall Street Journal during his 2012 campaign. “Big business does great with big government. Big business is very happy to climb in bed with big government. Republicans are and should be the party of small business and of entrepreneurs.”


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Mr. Anti-Reagan

Schadenfreude on January 18, 2013 at 4:47 PM

Obama is owned and manipulated by rich white guys from WS, the ganking industry and big business.

It’s the ultimate laugh and charlatanry.

He enriches them and they enrich him, and the fools sing “kumbaya Obama”.

Schadenfreude on January 18, 2013 at 4:49 PM

…JugEars has all his people in place to make money off the taxpayer.

KOOLAID2 on January 18, 2013 at 4:51 PM

I guess the joke is on the occupy fools.

Mr. Arrogant on January 18, 2013 at 4:53 PM

Wesley Mouch, please pick up the white courtesy phone.

Flange on January 18, 2013 at 5:05 PM

ganking = banking

Schadenfreude on January 18, 2013 at 5:10 PM

Wesley Mouch, please pick up the white courtesy phone.

Flange on January 18, 2013 at 5:05 PM

Atlas ain’t unshrugging any time soon.

Schadenfreude on January 18, 2013 at 5:10 PM

It’s almost like we live in a fascistic country.

gwelf on January 18, 2013 at 5:11 PM

Obama is owned and manipulated by rich white guys from WS, the banking industry and big business.

It’s the ultimate laugh and charlatanry.

He enriches them and they enrich him, and the fools sing “kumbaya Obama”.

Schadenfreude on January 18, 2013 at 4:49 PM

They think they’re playing him. What they don’t understand is how much he and his cronies really, really hate them.

In the end, it’s going to be like GM. The government will own them, and they’ll be wondering how it happened.

The rent-seekers like Immelt at GE will be ecstatic, as they won’t have to worry about pesky things like competition anymore. The rest will get the air. Along with us little people who aren’t “in with the in crowd”.

The bankers and Wall Street sharks who think they have this President and his leftist academic clique’ by the short hairs should consider a fish. When it takes a worm, it doesn’t notice the hook and line until it’s way too late.

clear ether

eon

eon on January 18, 2013 at 5:22 PM

It’s almost like we live in a fascistic country.

gwelf on January 18, 2013 at 5:11 PM

Yep, and the Russian running Google has FAR more information on us all than the KGB ever dreamed of collecting.

rayra on January 18, 2013 at 5:26 PM

Schadenfreude

I would like to take the opportunity to apologize to you for two things, and while this isn’t QOTD yet, I may be away this morning while you all are playing this evening there so I will take the time now. The first is respect for ones elders, the great Levon Helms reminded me while I was listening to him, that it is a must for that respect. You would ask why I would apologize, simple, I should not continue to shorten your nom de plume it is just disrespectful. The other is that I misunderstood yesterday when you were commenting to me, I in fact thought you were talking to me about my comment to Dante, not HAL, I also wrongly supposed that you had read the book, Molon Labe, which would have given you the inferences I was trying to make. It would seem trivial to some that I do this publicly, however in order to be a true man, one must value such things no matter how trivial they seem!

MarshFox on January 18, 2013 at 5:37 PM

U.S. Credit Rating Agencies have to be apply for and be formally registered as NRSROs (Nationally Recognized Statistical Rating Organizations) under Section 15E of the Securities Exchange Act of 1934.

Considering these organizations’ reluctance to properly downgrade U.S. “paper” (bonds nearing worthlessness, despite the irrational investing public’s demand for them), it appears there’s a cozy relationship between these businesses and the federal government — not to mention a clear conflict of interest.

If you didn’t know that before, I’m certain that you’re shocked, shocked to learn of it now …

ShainS on January 18, 2013 at 6:14 PM

Gee, who knew?
The Fox (Big Business), the Wolf (Big Government) and the Jackal (Big Labor) all have a common vision of the world. Now there’s a new thought!

Every once in a while something comes out that proves the old saw that “Just because you’re paranoid doesn’t mean they aren’t plotting against you.”. Suddenly I don’t sound so nuts to myself any more.

Lew on January 18, 2013 at 6:19 PM

“Political” and “Intelligence” used together? Yeah, that really is pretty funny. Politics is truly the venue of society’s dimmest bulbs.

NOMOBO on January 18, 2013 at 6:41 PM

Obama is owned and manipulated by rich white guys from WS, the ganking industry and big business.

It’s the ultimate laugh and charlatanry.

He enriches them and they enrich him, and the fools sing “kumbaya Obama”.

Schadenfreude
on January 18, 2013 at 4:49 PM

.
No doubt he is influenced by Wall Street, but I believe those persons with the strongest influence over him are much higher than that.
Like Federal Reserve Bank level, and “UP”.

listens2glenn on January 18, 2013 at 7:29 PM

Obama is owned and manipulated by rich white guys from WS, the ganking industry and big business.

It’s the ultimate laugh and charlatanry.

He enriches them and they enrich him, and the fools sing “kumbaya Obama”.

Schadenfreude on January 18, 2013 at 4:49 PM

.
No doubt he is influenced by Wall Street, but I believe those persons with the strongest influence over him are much higher than that.
Like Federal Reserve Bank level, and “UP”.

listens2glenn on January 18, 2013 at 7:29 PM

The vast majority of Wall Street political donations went to the GOP in 2012.

lexhamfox on January 19, 2013 at 12:04 AM

isn’t political intelligence one of those oxymorons?

teejk on January 19, 2013 at 12:51 PM