Review: Throw Them All Out by Peter Schweizer
Want to get rich quick? Forget those insipid real estate infomercials that air in the dark hours of the early morning; just get yourself elected to Congress!
In his new book Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison, author Peter Schweizer notes that Thomas Jefferson claimed in a letter to Count Jules Diodati that "I have the consolation of having added nothing to my private fortune during my public service, and of retiring with hands as clean as they are empty."
So wrote the principal author of the Declaration of Independence in words that could well be inscribed in gold at his memorial by the Tidal Basin in Washington. Yet read those words aloud to a group of contemporary congressmen and they would probably burst out laughing: Jefferson! What a fool!
Schweizer exhaustively and frighteningly details how members of Congress have exempted themselves from insider-trading rules, smoothed the way for Wall Street donors, and earmarked themselves competitive advantages that have brought them windfalls they would have otherwise never seen. Schweizer reminds readers that the method is not novel at all -- it is straight from the playbook of New York City's Tammany Hall impresario George Washington Plunkitt, who coined the phrase "honest graft" and made it a way of life. Plunkitt, not Jefferson, is the standard in Congress in the early 21st century.
There is seemingly no end to the litany despite the book's austere 176 pages, and the graft it describes is a decidedly bipartisan affair. Take, for example, two princes of New England. As Schweizer outlines, Sen. John Kerry and his wife have displayed an amazing acumen for buying and selling health care stocks in companies that, astonishingly enough, were subject to legislation voted upon by Kerry. Consider the company ResMed, which develops airway aids for sleep apnea. In 2009, the Kerrys bought at least $200,000 worth of ResMed shares. In the health care reform bill that was jammed through Congress, ResMed escaped industry taxes until 2013. Their stock price soared after the bill passed, as much as 71 percent above the original price the Kerrys paid. Schweizer writes: "Kerry was a strong opponent of higher taxes on medical device makers."
New Hampshire's Judd Gregg, who has spent the majority of his adult life in political office, was, according to Schweizer's research, generous with earmarks -- those special legislative insertions that can bring pork back to the constituency. Schweizer points out that as chairman of the Senate Budget Committee, Gregg earmarked about $66 million in treasury funds to convert Pease Air Force Base in Portsmouth into a business park -- a business park being developed by one Cyrus Gregg, the senator's brother. The senator had invested somewhere between $450,000 and $1 million in the project and eventually brought in hundreds of thousands on his investments. Schweizer notes that the former senator now works for Goldman Sachs.
As Schweizer points out, when Gregg was tapped as Barack Obama's original choice for secretary of commerce, Gregg answered queries about the earmarks by saying that he had not broken any of the Senate's ethical rules. That is, says Schweizer, absolutely true and the absolute problem. The Senate makes the rules, and the Senate (and the House) comically (but profitably) police themselves, all the while implicitly and explicitly threatening regulators like the Securities and Exchange Commission with decreased funding and weakened powers should the latter deign to actually enforce the rules that these legislators set down for all but themselves.
Schweizer also discusses how those who worked in firms such as Goldman Sachs litter the Obama administration in powerful positions. Those on Wall Street who betted heavily and successfully on Barack Obama are presently slinking their way toward Mitt Romney. Donors with ties to Goldman Sachs, Bank of America, New York Life, and a host of many in the rogues' gallery are lining up behind Republicans. Their bet: that no matter who is in power -- as long as it's not we boorish spoilers who favor ordered liberty and limited government -- they will call the tune of their puppets in Congress (who themselves will get some on the side) and enjoy the profits.
As Kevin Williamson writes in the December 19, 2011 edition of National Review, "[f]ree-market, limited-government conservatives should be none too eager to welcome them back, nor should we let our natural sympathy with the profit motive blind us to the fact that a great many of them do not belong in the conservative movement, and that more than a few of them belong in prison."
This must not stand. If it does, the republic will not stand for much longer. If you know of citizens who apathetically accept the state of our politics and, thus, tacitly endorse this sort of larceny and trampling of first principles, give them this book -- but, please, not as a how-to guide on becoming rich without producing anything of value. Our present Congress, as its members chortle at Jefferson and his financial impotence, has that down to a science.
Matthew May is the author of Restoration: The God and Country Education Project, available here. He welcomes comments at email@example.com.