Tuesday, April 28, 2015

Then Lobbying Happened

by Neil H. Buchanan

A famous New Yorker cartoon shows two men standing in front of a chalkboard.  On the left side of the board are some mathematical symbols.  Another group of symbols has been written on the right side.  In the middle, connecting the two sets of symbols, are the words "THEN A MIRACLE OCCURS."  The older man points to those words and says, "I think you should be more explicit here in step two."  This is a nerd-comic take on the concept of the deus ex machina: "a character or thing that suddenly enters the story in a novel, play, movie, etc., and solves a problem that had previously seemed impossible to solve."

I am becoming increasingly convinced that "lobbying" is now the miracle-equivalent that explains everything in politics, without actually explaining anything.  We all think we know what lobbying is, and maybe even how it is supposed to work.  We attribute many (all?) unfavorable political outcomes to it.  At the end of the day, however, I doubt that we really have any idea what we are talking about.  Let me offer a couple of small examples, along with a big counterexample, to make my point.

I was recently reading an article on the Vox blog about the Trans-Pacific Partnership (TPP) trade deal.  (As an aside, I agree with Paul Krugman, who argued on Sunday on his blog that, really, "this is not a trade agreement.")  The Vox piece was appropriately skeptical of TPP, describing how the deal could increase profits for large companies, especially drug makers.  It turns out that an obscure provision of pharmaceutical law in the U.S. grants "data exclusivity" to U.S. drug makers.  This means that a company that has paid for clinical trials need not share the data from those trials with other drug companies for 12 years. This is a problem, from the public's standpoint, because "[t]o introduce competing drugs before then, companies have to perform their own set of redundant clinical trials. The higher cost of bringing drugs to market leads to less competition and higher prices."

Surprising, and very interesting.  Certainly, it was good news that the Obama administration had been thinking about a proposal to reduce the period of data exclusivity from 12 years to seven.  But you know what is coming: "Yet under pressure from industry lobbyists and their allies in Congress, Obama's trade negotiators are reportedly pushing for language requiring 12 years of exclusivity."  Note that the second embedded link in that last quotation takes readers to an op-ed that was co-written by a veteran congresswoman, who also treated "lobbying" as a deus ex machina: "With lobbying and millions in election spending, the drug giants got inserted into the Affordable Care Act measures that block the U.S. sale of cost-reducing competition for biologics for 12 years."

Second example: On the April 19 episode of "Last Week Tonight," John Oliver's main story was about "patent trolls."  He described how there are companies that exist entirely to buy other companies' patents in order to litigate aggressively against any possible violations, which supposedly harms the economy.  Like his piece on college sports (which I criticized here on Dorf on Law last month), his analysis was disappointingly shallow, never bothering to ask if there are any possible upsides to selling patents, and failing to provide any sense of the magnitude of the supposed social costs.  (But boy, is he convinced that the effects are big!)

Because I do not have strong views on that particular policy question, I would not have been especially troubled by the piece, despite its shortcomings.  It was Oliver's explanation for why a bill to reduce patent trolling had failed in the Senate, however, that caught my attention.  His explanation: lobbying.  He showed a clip of an opponent of patent trolling saying this: "I know this is news, but trial lawyers' influence in Washington is alive and well."  Oliver then added: "Yes, apparently, lobbyists for groups including trial lawyers managed to prevent the bill from moving forward.  And you cannot let trial lawyers decide whether there should be more baseless lawsuits."  He then made a bizarre (but funny) analogy to raccoons, before asserting that the economy will be ruined by these lawsuits.  That was the entirety of his explanation.

I might not have thought too much about those two examples, except that The New York Times ran a piece last week explaining how the proposed Comcast merger/takeover of Time Warner failed.  The basic story was that, even though Comcast is an absolute powerhouse when it comes to lobbying in Washington (the article providing scary details regarding the scale of dollars and bodies involved), and even though people on Capitol Hill were more than open to listening to Comcast's arguments, the arguments were simply unconvincing.  For example, Connecticut Senator Richard Blumenthal "said he came away from the meeting unconvinced, as did others on Capitol Hill who had similar conversations."  An unnamed "senior Senate staff aide" is quoted as saying that Comcast's lobbyists ultimately offered "unsatisfactory answers."

What is going on here?  Back in 2010, I wrote a Dorf on Law post in which I tried to think through how lobbying is supposed to work.  I was puzzled about how legislators' votes are actually changed by lobbying.  The lobbyist walks in the door, the legislator listens and is convinced, and the vote changes.  The expenses of lobbying buy the access to the legislator's office, and apparently the rest is easy.  On the comments board for that post, one reader discussed the unconscious nature of politicians being swayed by people with money (and the promise/threat of campaign contributions), which I found rather plausible.  Still, even with a slightly better sense of the process of how lobbying changes votes, that explanation was still rather thin.  In any case, the presumption was that lobbying changes votes, and that this needed to be explained.

Looking at the three examples above, however, we now have a different puzzle.  The Times basically says, "Lobbying gets you in the door, but you need a good argument on the merits."  But Vox and John Oliver both present what they take to be compelling -- almost incontrovertible -- cases for a change in policy, but then lobbying happens.  Surely, the case for the Comcast proposal was at least as plausible as the case for 12 year data exclusivity, or for allowing lawyers supposedly to continue to ruin the economy.

To look at it somewhat differently, consider that Comcast apparently is a welcome presence in the halls of power.  The company's chairman has golfed with President Obama.  Their lobbying team is legendary.  By contrast, trial lawyers are reviled in the public imagination, and one political party has openly declared war on the plaintiffs' bar.  Yet when the lawyers' lobbyists get in the door, they kill a supposedly clear improvement in our laws, while Comcast cannot even get a few Senators to send letters to antitrust regulators?

Years ago, Professor Dorf (before he was a professor) commented that people like to have labels to explain things, even though they do not understand what the labels mean.  Why do objects fall to the ground?  Gravity.  Can anyone but physics majors actually explain what gravity is, and why it makes objects fall?  No, but people think that "gravity" is an answer.  Gravity makes things fall.  Given that nearly everyone (including me) thinks that there is too much influence from lobbyists in Washington, it is kind of amazing that we really have no plausible, consistent story of how it works when it works, and when it will fail.  If we do not understand it, how can we ever know how to mitigate or reverse the bad outcomes that (we are certain) inevitably occur when lobbying happens?