Spending on Lobbying Cost Doubled in Past Eight Years

The top chart above shows that spending on lobbying in the U.S. more than doubled between 2000 ($1.56 billion) and 2008 ($3.30 billion), according to the searchable lobbying database of OpenSecrets.org. The bottom chart shows the top 20 organizations that spent the most on lobbying between 1998-2009.

One of the indirect, and often hidden costs of increased government spending, changes in tax policy, or increased government regulation, or even the potential for increased government regulation of industries (pharmaceuticals, health care) or higher taxes (windfall oil profits tax), or the threat of deregulation of industries controlled by trade groups like the AMA, is the cost of potentially wasteful “rent seeking,” aka lobbying. From the list of top lobbying spenders, it looks a lot like the industries and companies that had the most to gain or lose from government action (health care, real estate, mortgage, GM, and Exxon) over the last ten years spent the most on lobbying to influence legislation in their favor.

Maybe it’s also the case that some of the most heavily regulated industries (health care, health insurance, oil, telecommunications, real estate) spend the most on lobbying. For example, in the largely unregulated computer sector, large industry leaders spent relatively small amounts on lobbying in 2008: Dell Computer (NASDAQ:DELL) ($160,000), eBay (NASDAQ:EBAY) ($2 million), Amazon (NASDAQ:AMZN) ($1.3 million), Google (NASDAQ:GOOG) ($2.8 million) and Yahoo! (NASDAQ:YHOO) ($2.35 million). Compare those amounts to heavily regulated and heavily taxed Exxon (NYSE:XOM), which spent $29 million on lobbying in 2008, or 10 times more than Google or Yahoo!.

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About Mark J. Perry 262 Articles

Affiliation: University of Michigan

Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.

He holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University in Washington, D.C. and an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota.

Since 1997, Professor Perry has been a member of the Board of Scholars for the Mackinac Center for Public Policy, a nonpartisan research and public policy institute in Michigan.

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