Oil? Financials? Aerospace? When someone asks
who the biggest sources of lobby dollars for DC's
politicians-for-purchase are, these are the three usual suspects that
come to mind. Some may, therefore, be surprised to learn according to
the database kept by OpenSecrets between
Pharmaceutical and health product industry, hospital and nursing homes,
health professionals and health services, HMOs, or more broadly
Pharma/Healthcare/HMO, the total lobby dollars spent between 1998 and
2012 was a staggering $5.3 billion, or nearly three times greater
than the second most generous industry: insurance, and well above Oil
and Gas at $1.4 billion, and Securities and Investment at $1.0 billion.
Is it becoming clearer why the US government has few qualms about
unsustainable taxpayer funded healthcare spending, especially when there
are so many current benefits accruing to the politicians who see so
many billions in benefits from passing lobby-friendly laws now (by which
we mean generous taxpayer funding, the bulk of which benefits the
healthcare industry's bottom line)?
As for the costs: who cares - just dump them on future generations.
It's not like anyone expects the $16.7 trillion in US debt to be ever
Why is this important? Because as we showed nearly a year ago, the IRR on lobbying is by and far the highest of any investment return under the sun.
From: Presenting The Greatest ROI Opportunity Ever
The dream of virtually anyone who has ever traded even one share of
stock has always been to generate above market returns, also known as
alpha, preferably in a long-term horizon. Why? Because those who manage
to return 30%, 20% even 10% above the S&P over the long run,
become, all else equal (expert networks and collocated
flow-frontrunning HFT boxes aside), legendary investors in the eyes of
the general public, which brings the ancillary benefits of fame and
fortune (usually in the form of 2 and 20). This is the ultimate goal of
everyone who works on Wall Street. Yet, ironically, what most don't
realize, is that these returns, or Returns On Investment (ROI), are
absolutely meaningless when put side by side next to something few
think about when considering investment returns.
Because it is the ROIs for various forms of lobbying the put the
compounded long-term returns of the market to absolute shame. As the
following infographic demonstrates, ROIs on various lobbying efforts range from a whopping 5,900% (oil subsidies) to a gargantuan 77,500% (pharmaceuticals).
How are these mingboggling returns possible? Simple - because they
appeal to the weakest link: the most corrupt, bribable, and infinitely
greedy unit of modern society known as 'the politician'.
Yet who benefits from these tremendous arbitrage opportunities? Not you and I, that is for certain.
No - it is the faceless corporations - the IBM Stellar Sphere, the
Microsoft Galaxy, Planet Starbucks - which are truly in the control
nexus of modern society, and which, precisely courtesy of these lobbying
"efforts", in which modest investments generate fantastic returns
allowing the status quo to further entrench itself, take advantage of
this biggest weakness of modern "developed" society to make the rich
much richer (a/k/a that increasingly thinner sliver of society known as
investors), who are the sole beneficiaries of this "Amazing ROI" - the
stock market is merely one grand (and lately broken, and very much
manipulated) distraction, to give everyone the impression the playing
field is level.