International corruption makes the case for smaller government

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Whenever corruption happens, the first answer many come up with is “bigger government.” McCain-Feingold campaign regulations, Dodd-Frank, the Stock Act – examples are everywhere.

Yet the spigot hasn’t closed, in this country or many others:

By one 2012 study, Spain has an incredible 440,000 politicians. A recent poll found 96% of Spaniards believe their politicians are corrupt. That opinion hardened recently, when 22 million euros turned up in a Swiss bank account linked to Spain’s People’s Party, which is headed by Prime Minister Mariano Rajoy.

France‘s budget and tax minister, Jerome Cahuzac, resigned in March over allegations that he has an undeclared 15-million-euro Swiss bank account….

Italy has 7,000 government companies, which have been accustomed to cutting deals with one another without the necessity of competitive bids. This practice helped generate one of the world’s biggest national debts, as well as megaprofits for select government managers and heavy voter turnout in favor of comedian Beppe Grillo’s attack on Italy’s political elite.

The European Union’s brimming Brussels wine cellars made corruption headlines in 2012. Its 2013 decision to allow Cyprus to tax all bank deposits (which Cyprus later changed to deposits over 100,000 euros) deepened the belief that eurocrats are only watching out for governments, not the public. Fueling the distrust, billions of euros mysteriously left Cyprus just prior to the March imposition of taxes and capital controls.

So what is the solution? Bigger government hasn’t stemmed corruption, whether in the U.S. or abroad – but doesn’t a smaller level of watchdog regulations make the chances of corruption even higher?

Under the current regime of regulations and federal government policies, possibly. However, consider what would happen if the federal government was constrained by the Constitution:

1.       Company ABC wants Senator XYZ to push for a new regulation that would give it a competitive advantage.

2.       In order to persuade Senator XYZ, the company makes a large infusion of cash to the Senator’s campaign fund.

3.       The Senator attempts to include the regulation in a larger bill, thus either hiding its passage or putting in legislation that “must pass.”

4.       When the regulation is found, it is quickly taken out of the legislation because of its lack of constitutional standing. Preferably quickly and loudly, in order to publicly embarrass both the corrupt Senator and the corrupt executives of the Company.

Across the political spectrum, Americans want a federal government that is transparent and provides equal treatment under the law. The Constitution provides for this by limiting the power of the federal government, thus making certain that even if a Member of Congress or a special interest is corrupt, that weakness in human nature does not infect the rest of the political system, or the nation writ large.

Simple. Easy. And hundreds of years old. Today’s politicians who clamor for new regulations in a new age would do well to look at history for the best solution to today’s corruption-filled governments.