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.”