Politicians vs The Politics Industry

Elected government officials, at one point or another, have to govern. It’s their job.

But the political industry, represented by groups all over the political spectrum, is just an industry. Its job is to motivate its fervent supporters (the notorious “base”) and attract contributions, and then to generate results – or at least claim to generate results – so it can attract further contributions. Such organizations never win their wars and never lose them. Their whole reason for being is to keep fighting those wars indefinitely.

Officeholders, by and large, won their positions with the help of the political machines driving their party. But sometimes the practical reality of governance runs afoul of the never-ending push such groups exert.

An example surfaced earlier this month, after the House overwhelmingly passed a compromise budget measure. House Speaker John Boehner, R-Ohio, evidently lost patience with outside conservative groups that opposed the legislation before it was unveiled. He said such groups “have lost all credibility” and that they are “ridiculous.”

“I came here to cut the size of government. That’s exactly what this bill does,” Boehner went on to say. He also said that outside groups that oppose any level of compromise, many of which support the Tea Party movement, misled their followers and other Republicans and contributed to the disastrous outcome of the government shutdown.

Unsurprisingly, Boehner’s remarks were not warmly received. The State Conservatives Fund emailed its supporters accusing Boehner of declaring “war on conservatives.” Rep. Paul Ryan, R-Wis., earned the ire of conservative groups too, as the coauthor of the budget compromise.

Boehner and Ryan are running up against the simple reality that officeholders and political interest groups may support one another, but they have fundamentally different goals. As Boehner points out, the new budget agreement actually reduces the projected deficit, if infinitesimally, over the next 10 years. That is a win, albeit a minor one.

Certainly lots of people, conservative and less so, would like to see the legislation do more toward shrinking the deficit. But only those who wear the blinders of single-issue politics would want to see it do more at an unlimited cost, or demand that it do more during a time when the balance of power in Washington leaves nothing more to be done.

If some conservative groups see Boehner’s criticism as an attack, not all of them do. Steve LaTourette, a former congressman from Ohio and head of the Republican Main Street Partnership, expressed satisfaction that Boehner finally pushed back against groups opposed to any compromise at all. “The audience for what the speaker had to say isn’t the 25 chuckleheads who are going to vote ‘no,’ no matter what happens,” LaTourette said of Boehner’s remarks.

With 169 Republicans backing the Bipartisan Budget Act and 62 opposed, it seems as if Boehner may not be the only working politician growing impatient with those who put ideological piety ahead of the ability to govern. That’s a terrible way to run a country, after all – but it is a good way to raise funds.

If politics is the art of the possible, than political organizing is the art of extracting every possible dollar.

About Larry M. Elkin 553 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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