(C.1) A government of bad intentions and corrupt practices

(C.1.a) I'm from the government, and I'm here to help

This large government helped people in many ways but it also became obvious that politicians spent less time trying to help the working people and more time raising money for political campaigns. When FDR's New Deal (a money distribution machine) started doling money to people in the Great Depression many politicians tried to decipher Roosevelt's formula for deciding who gets the money (in order to get more for their constituents). They didn't like what they found. Basically, Roosevelt was using most of the money in swing-states, distributing less in the regions that would definitely or definitely not vote for him, and more money to the regions who were potential, but not definite, supporters.^(K1)

There had always existed a segment of Americans who disapproved of a strong central government. Many students were taught about the debates between Thomas Jefferson and Alexander Hamilton, and Jefferson's famous phrase, "A government big enough to give you everything you want is strong enough to take everything you have." So it should not be surprising that this new leviathan of a federal government, one that often seemed to serve only its own interests, was and still is opposed by much of the population.

(C.1.b) I'm from the government, and I'm here to help sugar producers

Video 11—Why Is There Corn In Your Coke?

What is it about a big government that alarms people? If it is a democratic government who must receive society's stamp of approval, how can it not promote the interest of society at-large? The answer is economic in nature: politicians win elections not so much by doing good for society but by raising large amounts of campaign contributions. It achieves this largely by taking small amounts of money from each of the masses (small enough the individual doesn't notice it) and gives it in large amounts to a few people. The benefactors are understandably gracious, and show their gratitude by large checks to political campaigns. When politicians give you things, then, that is just an indirect way or tricking you into supporting their campaign. That is a perfect description for the U.S. sugar industry.   

Video 12—A Corrupt Sugar Industry
(must use Internet Explorer)

If the sugar issue interests you and you want to learn more, I encourage you to listen to this Planet Money podcast.

(C.1.c) Hi, I'm the federal government, and I have a spending problem

When the government makes sugar prices high so that a few sugar producers make lots of money, that's the politicians way of raising money. When the government takes a little from everyone and gives it all to the elderly (think Social Security and Medicare) that is because the elderly vote in droves and actively support campaigns. Young people are too busy with their social lives to vote. When government forces you to use gasoline blended with ethanol, they do so because farm organizations and ethanol corporations are big donors, not because ethanol is environmentally friendly (it isn't). Name everything the government spends money on, and I can show you a generous campaign contributor. This is why politicians can't seem to cut government spending—cutting spending is identical to receiving less campaign contributions!

Video 13—Why Politicians Don't Cut Spending

(C.1.d) Bribe, bribe me, do

We often view politics as a system where lobbyists bribe politicians, but we fail to realize the degree to which politicians want to be bribed! In fact, politicians spend more time raising money and begging to sell political influence than they do reading and writing legislation.

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Jacob: Alex, you’ve been doing these pieces on lobbying for a while now, and what’s been illuminating to me is how much the Congress people themselves need these fundraisers. They need this constant flow of money to get reelected.

Alex: Yeh, you know a lot of people think of all these lobbyists, that they’re bum-rushing Congress, throwing money at them and trying to corrupt them with their money, but [lobbyist] Jimmy Williams says it’s the other way around: Congress people were constantly pestering him. They were constantly calling, and a lot of time it was Congressmen whose votes he didn’t even need.

—Planet Money podcast. “A Former Lobbyist Tells All.” January 27, 2012.

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Now we can see why Republicans do not approve of a large federal government, and why Ronald Reagan once said, "The most terrifying words in the English language are: I'm from the government and I'm here to help."

Figure 5—How Politics Works (From a Cynical Point-Of-View)