Washington lobbying is an ugly cycle. The more that government grows, the more that previously recalcitrant members of the private sector feel the need to get paid representation in the nation's capital, lest they find themselves caught in a legislative ambush down the line.
Given enough time, that defensive posture often morphs into affirmative rent-seeking, producing the crony capitalism that's been at high tide over the past few years. If you're a free-market type, viewing the system up close can lead you to utter despair (depressives may want to avoid the single best book on the topic, Jonathan Rauch's "Government's End").
Perhaps, however, this bit of news will slow, if not reverse, the cycle. From Politico:
In a surprising finding, a new study shows that massive lobbying in D.C. and campaign donations by corporations are linked with worse market performance.
The Rice University study looked at the amount of money spent on lobbying and campaigning donations by 943 S&P 1500 firms between 1998 and 2008 and found that so-called political investments lead to weaker performance in terms of stock value and return on assets
Further, the report showed that firms that placed former public officials on their boards were worse off than those without these kinds of board members.
Contra Politico, I can't say that I'm surprised. Companies that go fishing for Washington largesse often overlook a key consequence: while short-term benefits may accrue from federal legislation, the insulation from competition tends to make them sclerotic in the long term (not to mention the enervating effect that excessive regulation and subsidization have on the wider economy).
There's an interesting caveat, however:
...When the study looked only at highly regulated industries, corporate political giving was connected to better market performance.
“If you’re regulated and for many years you keep repeatedly investing in (political activity), then you’ll realize some return on your investments. Then and only then it makes financial sense,” Michael Hadani, another co-author of the study, told Reuters.
This, of course, sounds like nothing so much as "regulatory capture", the tendency of heavily-regulated industries to co-opt the bureaucrats responsible for regulating them.
Like I said, depressing. But also an important reminder: the smaller the government's influence, the more limited the capacity for corruption.