Nice Business You've Got There- Shame If Anything Were To Happen To It

People often think of the relationship between politicians and big business as being business corrupting politicians through the influence of their cash.

In actual fact the relationship seems to be more like a case of politicians seeking rent from business. Politicians know they control the ultimate levers of power and can in effect run a protection racket. As this piece on Microsoft in the late 1990s makes clear:

But it grated on Hatch and other senators that Gates didn't want to want to play the Washington game. Former Microsoft employee Michael Kinsley, a liberal, wrote of Gates: "He didn't want anything special from the government, except the freedom to build and sell software. If the government would leave him alone, he would leave the government alone."

This was a mistake. One lobbyist fumed about Gates to author Gary Rivlin: "You look at a guy like Gates, who's been arrogant and cheap and incredibly naive about politics. He genuinely believed that because he was creating jobs or whatever, that'd be enough."

Gates was "cheap" because Microsoft spent only $2 million on lobbying in 1997, and its PAC contributed less than $50,000 during the 1996 election cycle. "You can't say, 'We're better than that,' " a Microsoft lobbyist told me on Friday. "At some point, you get too big, and you can't just ignore Washington."

"You can sit there and say, 'We despise Washington and we don't want to have anything to do with them,' " the lobbyist said. "But guess what? We're going to have hearings about the [stuff] you do."

It's no shocker that lobbyists think companies should hire lobbyists. But so does Capitol Hill -- Orrin Hatch included.

In a 2000 speech to technology companies, Hatch called Microsoft "knuckle-headed and hard-nosed," according to Wired magazine. "I have given [Microsoft] advice, and they don't pay any attention to it." In that same speech, Hatch warned: "If you want to get involved in business, you should get involved in politics."
"The industry had an attitude that government should do what it needs to do but leave us alone," one Hill technology staffer complained to Business Week at the time. "Their hands-off approach to Washington will come back to haunt them."

After the Hatch hearings, Microsoft complied. Its PAC increased spending fivefold in each of the next two elections. In the 2010 elections, Microsoft's PAC contributed $2.3 million to House and Senate candidates. The PAC has contributed the maximum $10,000 to each of Hatch's last two campaigns.

I would regard the Leveson inquiry as of a similar ilk- News International's behaviour has undoubtedly been poor, but it is hard to believe the fact that Tom Watson- the leading MP behind the attack- is a noted loyalist of Gordon Brown is a coincidence. When he and other Labour MPs went beyond what had been dicussed at the committee and concluded that Rupert Murdoch was not a fit and proper person to run News Corp, it was similarly thuggish- if the press oppose us we try to sabotage their business.