Dr. Loren Cobb referred me to an excellent report he co-wrote based on his experiences studying corruption in Latin America. It is brief, well written and does a very good job of illustrating how corruption is the result of vicious, self-perpetuating cycles. Here is a summary diagram from the report:


While the report focusses on corruption in developing nations, the ideas are enlightening when used in examining corruption in the American political and economic system. Specifically, corruption in the US is on the rise as a result of vicious self-perpetuating cycles. Examples:

-In America corporate political contributions have been a successful way of winning legislative favors, which has encouraged greater amounts of corporate contributions, which in turn purchases greater access to the legislative process.

-In America successful advertising campaigns help win elections, which creates a greater need for campaign raising campaign funds, which creates a greater need to grant favors to contributors, in order to be more competitive in future media based campaigns.

-In America a revolving door between political office and well compensated corporate positions has made winning the favor of large corporations a quick way to wealth for many politicians, encouraging more of this behavior with each new generation of elected officials.

-In America the media can attract more advertising revenue by promoting a corporate friendly agenda, consequently corporate friendly media continue to grow in terms of power and influence.

-In the American financial system executives are rarely punished for manipulating earnings reports and their compensation is often tied to short term performance objectives. Seeing how the system rewards short-sighted goals, more executives are encouraged to neglect the long term health of their companies in the pursuit of bigger bonuses.

Because corruption has been working for the corrupt, it has encouraged more corruption with each successive election cycle. The Presidency of George W. Bush seems to have been planned and executed with corruption as a founding principle. From the early days of his first run for presidency he was the best funded candidate with major backing by big oil, big pharma, defense contractors and Wall St. Not surprisingly his presidency has been a tremendous windfall for these industries.

If the Republican party continues to be successful in operating a corrupt regime, then we can expect both political parties to become even more corrupt in their operating methods in the future. Voter education and retaliation in the upcoming midterm elections is of great importance if we hope to reduce the role of corruption in American government. Voter education as to the nature of corruption in America is what this blog is about. If you find these ideas to be valuable, please share this link wherever you think it may help.


*Special thanks to Dr. Cobb and others for providing feedback on the initial blog entry here and on my message board at the Motley Fool. All comments and feedback are greatly appreciated.