Nonsense, horsefeathers, and idle musings from a decade in South Korea (2002-2012).

25 November, 2010

Casino Jack & the United States of Money

By Aaron
25 November, 2010

"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators."
- PJ O'Rourke

One thing's for sure: Alex Gibney knows how to make a movie. His list of successes includes Enron: The Smartest Guys in the Room and the Oscar-winning Taxi to the Dark Side, among others. This year, he has released two more films that, taken either separately or, especially, together, stand to achieve the impossible: further degrade our view of politics and politicians. Client 9 traces the rise and fall of ex-New York governor Elliot Spitzer, while the other, Casino Jack, tells the tawdry tale of uber-lobbyist Jack Abramoff. Discussion of Client 9 will have to wait for another day, as I've not yet seen it, but Casino Jack deserves a few words.

The storyline of Casino Jack revolves around Jack Abramoff, a lobbyist of unrivaled skill whose tight relationship with the Republican Party made him one of the most powerful men in Washington throughout the 1990s and early 2000s. Abramoff's downfall came when he was convicted - along with two White House staffers, a congressman, and several aides - for his role in a massive corruption scandal involving Native American casinos. While the scandal itself is long and convoluted, the essence is not: Abramoff and his associates took millions of dollars from Indian tribes who hoped to secure licenses to operate casinos and, at the same time, to prevent rival tribes from procuring the same licenses and thereby posing a competitive risk. In the United States, the federal and state governments ultimately control when and to whom these licenses are issued, and there thus exists an incentive for Indian tribes to lobby government officials in the hope of receiving the right to operate these cash cows. Of course, your average American citizen, Indian or otherwise, isn't wise to the ways of Washington.

Enter Jack Abramoff.

Casino Jack is an excellent, if incomplete, view into the inherently corrupt - and corrupting - nature of politics. Since the time of Plato and Aristotle, the popular tendency has been to view politicians as "public servants" who faithfully execute the "will of the people" and rise above their own parochial concerns. James Buchanan, however, won a Nobel Prize in 1986 for showing that this view of politics is both naive and, more importantly, wrong. Buchanan, a pioneer in the field of Public Choice, views "politics without the romance" and shows that politicians, just like all other humans, are guided chiefly by their own self-interest, which most of the time amounts to being reelected. Gibney's film shows that, to achieve this goal, politicians must both bring the goodies back to their home districts and stay in the good graces of their party by raising plenty of campaign cash.

Unfortunately, Gibney's film falters at this point by laying the Abramoff scandal at the feet of "free market" and "conservative" ideologies, when in fact the scandal is indicative of the institutional structure of the American political system, regardless of party affiliation. For all their rhetoric, sleazy characters like Abramoff, Tom Delay, and Bob Ney are not interested in shrinking the size of government by eliminating rules and regulations. Quite the opposite: lobbyists make their living by manipulating regulations and finding loopholes that will benefit their clients while hobbling the competition, while politicians enjoy the power to decide who wins and who loses. The ability of government, at all levels and on both sides of the aisle, to hand out favors is precisely the dung heap which attracts the flies.

In Casino Jack, Gibney never gets around to asking why the government is in the business of deciding who can and cannot operate a casino, or whether this sort discretion might be at the root of the much of the corruption in American politics. Rather, the transgressions of Abramoff and associates is written off as a product of greed, right-wing ideology and arrogance. Thus, while the film is strong on exposition, it falters in its conclusion. The truth is that a concentration of political power - and regulation, license-issuing authority, and state spending are extensions of political power - tends to give more influence to those who can afford to lobby the holders of such power, be they Jack Abramoff or Goldman Sachs. As Fred McChesney writes:

If governments did not arrogate to themselves the right to outlaw or regulate gambling, there would be no need for government lobbyists. There are no Jack Abramoff's needed to persuade government to allow you to open a grocery store, or me to start a law office. Why? Because, for the most part, government has no ability to stop us from doing so. If government did not have the ability to siphon off tribal revenues by taxation, lobbyists would have no work in that area, either.

As government gets bigger—as it can dispense special favors or threaten to tax—lobbyists have the constitutionally-protected ability to sell their services to influence outcomes sought by their clients. Again to quote the Wall Street Journal, "Where opportunities for enormous, instant wealth are sloshing around at the discretion of bureaucrats and legislators, invariably is bad policy to be found." If one does not like what the Jack Abramoffs in Washington do, the only way to stop it is to reduce government control of gambling.

The important lesson of Casino Jack, which Gibney largely neglects, is that scandals such as these cannot be eliminated simply by electing "better people" or folks from a different political party, or by implementing more and more campaign finance rules (which, as the film shows, are all too easy to circumvent). This problem, this corruption, will exist as long as the government has the power to pick winners and bail out losers. Eliminate the government's power to issue gambling licenses, protect certain industries with import tariffs and quotas, or shower subsidies on political constituencies, and you'll eliminate the incentive to lobby politicians for such favors. Until then, we'd all better get comfortable with fellows like Jack Abramoff.

Note: Here's Gibney discussing Casino Jack with Robert Wright on a recent Bloggingheads episode.