Posted May 21, 2014 by Martin Armstrong
Elected officials will do anything to maintain power. The name of the game is to to get re-elected at all costs, which preferably are yours. Running a campaign is expensive, so politicians are dependent upon contributions in return they take care of their friends. The proof is in the numbers. Strategas, a macro-research/brokerage firm formed a lobbying index. The index has out performed the general market for the past 15 years. The Economist reported that “Strategas calculates the return on lobbying expenses was $220 for each $1 spent.”
Thye amount of money given to politicians to buy favors has outperformed the S&P500 by 11% a year since 2002 . There have been bumps along the way that are natural cycles. Nonetheless, the index fell sharply in 2008 and again this summer, when debt-ceiling brinkmanship raised the prospect of government austerity. But at other times, it seems remarkable that companies would do anything but lobby. A particularly vivid example was in 2004, when an aggressive corporate campaign prompted Congress to grant a one-off tax holiday for American companies to repatriate foreign earnings. The outright return on lobbying costs, according to one of the various studies that served as inspiration for the Strategas index, was $220 for each $1 spent. (see also CNBC).
An you wonder WHY I say we FIRST need to get rid of career politicians – one term only. Do that, and most else will start to fall into place.