- - Monday, January 16, 2017

ANALYSIS/OPINION:

A conservative wit once said that if you want to know who runs Washington, you should look under “association” in the Washington phone book. The line gets a good laugh, but it’s unfair — which may be why it gets the laugh. And it’s particularly unfair to small businesses and companies employing forgotten middle-class workers.

President-elect Donald Trump has required transition team members to deregister as a lobbyists and to terminate any lobbying activity. He says he intends to require his senior appointees to agree not to lobby for five years after they leave his administration, and never to lobby for a foreign government. It’s part of the program to drain the swamp.

“The key thing for this administration is going to be that people going out of government won’t be able to use that service to enrich themselves,” said Sean Spicer, the communications director of the Republican National Committee, who is slated to become Mr. Trump’s White House press secretary. “Enrich” is a rather more loaded term than “make a living.”

But like some of Mr. Trump’s proposals, it seems a bit undercooked. The Supreme Court has ruled that petitioning the government by way of lobbying is protected as free speech by the Constitution, the First Amendment to which reads: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Redressing grievances would seem to be a noble activity, depending as always on the particular facts. “Redress” means “to set right.” Who could be opposed to that?

Lots of people. In practice, lobbying means coaxing Congress into passing legislation that benefits the lobbyist’s client. The problem is not that the bigger the client, the more powerful the lobbying activity will be. The problem is that big clients — big corporations — tend to lobby to get legislation enacted that will benefit them at the expense of their smaller competitors.

Big corporations like regulations. Nobel Prize winner George Stigler wrote years ago that “as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.”

That is why we now see J.P. Morgan and Goldman Sachs lobbying against major changes to the DoddFrank Wall Street Reform and Consumer Protection and Safeguarding Motherhood, Small Children and Apple Pie Act, known as “Dodd-Frank.”

They like Dodd-Frank, even if the “Safeguarding Motherhood, Small Children and Apple Pie” part is not actually part of the title, though we can be sure they wish it were. (In fact, of course, “motherhood” was a concern of the 1950s culture: Today the push is for “gender independence.”)

The phenomenon of big corporations using regulations as a weapon against small competitors is known as regulatory capture. Big corporations have armies of lawyers to navigate through the rocks and shoals of regulations. Small corporations don’t. Big corporations seek to capture the regulatory process and the regulators in order to make mischief — and mischief of a very expensive kind for their small-business competitors.

That’s the problem Mr. Trump should be addressing. His proscription should be on lobbying on behalf of mega-corporations. Instead of prohibiting all lobbying, he should be encouraging lobbying on behalf of small businesses who are fighting for their lives against regulations sought by big businesses for anti-competitive purposes.

How should mega-corporations be defined? Mr. Trump can figure that one out. One way might be simply to include all corporations on Forbes magazine’s list of the 2,000 largest corporations in the world. But that might not exclude enough corporations, in which case the prohibited class of clients could be defined by a smaller market capitalization amount that is used by Forbes. Any amount chosen will be debatable. The point is this: Lobbying on behalf of big corporations should be prohibited; lobbying on behalf of small corporations should be encouraged.

Donald Trump of all people — crusader for small businesses and forgotten middle-class workers — should understand that.

Daniel Oliver is chairman of the board of the Education and Research Institute and a director of Citizens for the Republic. He is a former chairman of the Federal Trade Commission, and a former executive editor and chairman of the board of National Review.

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