Do Ideas Follow Money?

The free market stipulates that money follows opportunity, not the other way around. This came to mind the other day when I was reading an amazon review of a book I was considering. The book is The Forgotten Man A New History of the Depression by Amity Shlaes. I have not read the book although I did purchase it, and I know nothing of the person Bill Edley who describes himself as a "Former Illinois Legislator".

In his review he starts out with "Funded by a corporate elite Think Tank". The phrase "funded by" and then some organization is supposed to tell us that that person is not independent by beholden to some entity. Those of us that understand and follow economics know that that is not possible except in people that are already corrupt. We may have a few of those people in public life but I don't believe that is the norm.

The reviewer does not tell us what think tank funded her, which I believe is telling in itself. Even if he did and it is true what is the harm of that. Think tanks are what they say. They are paid to think of solutions and policy. They are funded by people that agree with them. Free market believers fund free market think tanks such as the Heritage Foundation and the Cato Institute. Liberal think tanks include American Progress Action and The Rockridge Institute.

I want to stress here, these people on both sides have no power to legislate, no power to regulate. They do have some influence on legislators, but again this is not because of money it is usually because the legislators agree with them. What is wrong with them funding projects they agree with? I say nothing, it is the market at work. The more successful a think tank is depends on how many projects they come up with that encourage people to give them money. That sounds like market economics to me. The problem here is too many people have been conditioned to believe that money in politics equals corruption. The sponsors of the McCain-Feingold campaign finance bill in Congress signed by President Bush went beyond inferring that many times. We now have enough time gone by to see that this law did nothing to curb money, to the contrary it increased money in politics. Instead of the money being given to candidates it now goes often to 3rd party entities called 527 groups. The best know being MoveOn.org and on the right The Swift Boat Veterans For Truth, although the latter existed primarily as an anti John Kerry group where the former is a left wing action group. Left wingers at this time dominate this market. Personally I would rather have the money going to candidates. They are beholden to someone, the people who elect them. MoveOn.org is only beholden to their contributors. While there is free market at play, the national interest may or may not be. This is the case with all 527's I don't mean to disparage MoveOn alone. They ideas do that all by themselves.

This belief is a fundamental misunderstanding of how money works in markets. This is not surprising given the misunderstanding we see daily in the media. A real life case in point of money not changing policy is Enron. Ken Lay was a major contributor to President Bush before and after he was elected. When Enron got into trouble President Bush was asked and refused to bail out the company. It has always been my believe that a President Gore would have bailed it out. I don't believe that money would have been a factor, I believe he would have done it to try to help our the people that lost their jobs. I believe if that had happened it would have set a bad precedent. Once again money ahead of ideas does nothing.

I will read this book and when I finish I will give me thoughts on it even though I am not a legislator nor an expert on the Depression.