Corporate Pirates and Their Official Enablers

David Cay Johnston Shows That the Rich Are Getting a 'Free Lunch' -- and Guess Who's Picking Up the Tab?

Submitted by BuzzFlash on Tue, 01/22/2008 - 9:09am. Interviews

A BUZZFLASH INTERVIEW

There is no such thing as deregulation. What you have is new regulations. And the new regulations, in many cases, take Adam Smith's "invisible hand of the marketplace" and handcuff it. They diminish competition. They insulate businesses from bad decisions. They drive prices up, not down.

-- David Cay Johnston, Pulitzer Prize-Winning Reporter and Author, Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)

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Okay, BuzzFlash criticizes The New York Times quite a bit for its toady White House coverage. But we like to occasionally remind our readers that there are many good, solid journalists at the NYT. One of them is David Cay Johnston.

We interviewed Johnston once before about his last book, Perfectly Legal. In a newspaper whose reporting generally reflects the status quo, Johnston is a welcome anomaly. His specialty is tax regulation -- and how the tax structure has been "reformed" to benefit the wealthy at the expense of the middle class and poor.

The New York Times regularly features Johnston's painstaking and detailed analysis of America's tax structure. In addition, Johnston wrote Perfectly Legal a few years back and now Free Lunch. Both books take direct aim at the notion that tax regulation hinders the acquisition of wealth; in fact, he argues just the opposite, which is to say that over the past decades, the executive branch and congress have created a regulatory environment that preserves and enhances the concentration of wealth for the privileged few.

Johnston is also somewhat unusual as an NYT journalist. Instead of going into the Mid-Town NYT headquarters everyday, he writes from upstate New York.

Maybe that's what keeps his head clear.

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BuzzFlash: Project Censored honored you as an author and BuzzFlash for our interview with you concerning your book, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich -- and Cheat Everybody Else. How is Free Lunch different from Perfectly Legal? What's new in it?

David Cay Johnston: Perfectly Legal was about the tax system, and how it takes from the middle class and the poor and the upper-middle class and funnels money to the rich. This book is about the outflow of money from government, and about the ways the government directs spending without actually cutting a check. So the first book looks at revenue coming into the government. This one is about outflow.

Lo and behold, a whole series of laws and rules that most people don't know about, now enable many corporations and the very rich to reach into your pocket and take money, and keep it for themselves.

BuzzFlash: We hear a lot politically from the corporate side that it's best to deregulate the economy and move as close as possible towards an ideal, perhaps mythical, "free market." One might conclude that there isn't any regulation that favors corporations, but I would assume from Free Lunch that you would beg to differ with that concept.

David Cay Johnston: Markets do lots of fabulous things, and they're very good for pricing things. But all markets have rules. There is no such thing as deregulation. What you have is new regulations. And the new regulations, in many cases, take Adam Smith's "invisible hand of the marketplace" and handcuff it. They diminish competition. They insulate businesses from bad decisions. They drive prices up, not down. Calling something "the market" doesn't make it a market. We have rigged markets. In some cases, we do have better markets. It is not black and white -- it's gray. But it's pretty dark gray.

BuzzFlash: The Bush administration leads us to believe that their goal has been deregulating everywhere possible to achieve this mythical free market. You're saying that's not the case. It's just changing regulations.

David Cay Johnston: Let me give you two examples, one about President Bush and one about electricity.

President Bush started out in the oil and gas business where he was spectacularly unsuccessful, and then he put together a team of investors to buy a baseball team, the Texas Rangers. His investors had more than enough money to build themselves what they needed to make the team profitable, a new stadium.

Instead, they had a special election held in Arlington, Texas. A sales tax increase was put into place. That money was used to finance the new stadium -- this is tax-exempt bonds. And they again have the right to buy the stadium for a small fraction of what it cost to build. The total subsidy, according to Ray Hutchison, the husband of Senator Kay Bailey Hutchison, a big Republican figure and THE -- I mean that in capital letters -- expert on municipal finance in Texas, was over $200 million.

President Bush has always characterized this as a win-win for everybody. Well, the vast majority of people in Arlington, Texas who paid the extra taxes can't go to baseball games. There's no room for them. The people whose land was taken by government, not for a public purpose like a military base, a highway, a sewer plant, but to enrich the owners of a baseball team, wasn't a win-win for them. So here you have, not the market deciding how profitable a baseball team should be, but interference by the government. And I show in the book that the big four commercial sports -- baseball, basketball, football and hockey -- derive all of their profits from subsidies, both hidden and explicit. At the same time that we lavish money on commercial ballparks, we're starving our public parks for funding.

The other one is electricity. Enron went around promoting the idea that electricity should be competitively priced, instead of regulated by the government. They got a set of rules enacted that they liked. What's happened in the places where their rules were put in place? Electricity is hellaciously more expensive. It is so bad that the big industrial customers who promoted this idea with Enron joined hands with Ralph Nader to tell the federal government these aren't markets. They're producing unjust and unreasonable prices. The law requires just and reasonable prices. And this is the situation -- so anti-market, and so bad, that GM holds hands with Ralph Nader? That should scream at us that this is not market economics.

The concept of the book's title is this: That there is no such thing as a free lunch. It was a famous phrase that Milton Friedman used, and that Robert Heinlein, the science fiction writer, popularized as well. It stems from when the 1800s bars would say: There's a free lunch. But the cost of the lunch was the beer that you had to buy to get the lunch.

A free lunch occurs when you and I have to pay for something to benefit somebody else. They get a free lunch. They get something without paying for it. But you and I had to pay for it, because every cost must be accounted for. What I show in Free Lunch is that the market principle that should result in attributing costs efficiently and effectively has been interfered with, particularly in the last thirty years, to funnel money to the politically connected and the wealthy, and the political donor class who have gotten the rules written to enrich them at your expense.

BuzzFlash: They're getting the free lunch.

David Cay Johnston: That's right.

BuzzFlash: Christopher Hayes, who writes for The Nation, paid a great compliment to you. He was talking about how to improve campaign coverage, and one of the suggestions he has is, if a candidate, for instance, puts out a tax plan, instead of having The New York Times' political beat reporter analyze it, the Times happens to have on its desk the Pulitzer-prize winning David Cay Johnston, who is unquestionably the single best tax reporter in the country. Why wouldn't you assign him to write the piece about the candidate's tax plan? And the same goes for every substantive area of policy.

First of all, congratulations. Quite a compliment. My question to you is: What attracted you to this whole area? Tax policy is something that people out there other than accountants start to roll their eyes about whenever they think about. It seems very forbidding to most people.

David Cay Johnston: Exactly. Nobody was covering this well. My whole career was spent trying to explore things I thought were important that I thought were not being well covered. I'm the guy who changed the reputation of the Los Angeles Police Department, which for decades was written up as the most honest, effective police department the world had ever seen. And we all know the truth about it today. I'm the guy who went and did the work that set the truth out there. I've always tried to write about things I thought weren't being covered well.

The other point is that, as a rule, I have insisted from the day that I arrived that I want to focus on the policies the government has enacted, not what the politicians say they're going to do. I'm not sure it's fair to criticize the Times, because I'm the guy who said I want to write about tax laws after they're passed much more than that what's being proposed.

BuzzFlash: Proposals are put out there to win votes. They're not necessarily what comes out in the wash.

David Cay Johnston: Yes. It's pretty empty. Somebody says they want to do X, and you just describe it. I'm in the business of writing about stuff that's much more hidden -- sometimes deliberately, sometimes because it's just so complicated it's hard to understand, and to turn it into plain English.

BuzzFlash: You have a discussion in your book about health care. One of the things that intrigued us was the issue of not-for-profit health care companies converting to for-profit status and enriching not the shareholders, but the staff, and particularly the CEOs. What are the implications of that in terms of our tax policy and the health care system?

David Cay Johnston: We've seen the legalized theft of billions and billions of dollars of assets provided for by you, the customers, in your premium dollars, to private ownership. In one case, I show where a couple of people became billionaires by buying assets for a fraction of a penny on the dollar. They paid nineteen hundred dollars a month in interest to control what was then a billion dollar corporation. I also tell the story of a guy who wouldn't do this because it was morally wrong.

My principal source in the book on this is the Central Intelligence Agency, which in its books writes that the American health care system stands below Cuba by some notions, and with countries like Croatia. And our competitors in the world economy are doing fabulously better than we are. If you invested in the index of European stocks ten years ago, and the index of American stocks, your European stocks made a lot more money. Because the fact is, their systems are more efficient and effective. That doesn't mean I'm advocating any particular way of doing it. It's just that's the practical effect. Their system is effective and efficient.

We talk in America all the time about the efficient deployment of capital. We have to have all these rules so that capital is deployed efficiently. Well, our health care system results in the inefficient deployment of human capital.

I know lots of people who are hanging onto the jobs they have, instead of moving to a job that would be better for them and for society, simply because they have a health condition and they're concerned about the health care coverage. The reform Congress passed to address this ten years ago, is hollow. A report I cite shows that our health care system is so wasteful, just on the paperwork side, that it's the equivalent of everybody in America waking up in the morning and lighting up a George Washington, and burning two of them on Sunday. This is crazy.

Some people have said, look at all the jobs being created by the health care companies. Well, that creates make-work jobs, denying people health care, and putting them through maddening paperwork, and driving doctors into all sorts of stupid policies. If you want to create jobs through make-work, let's ban the use of earth graders at construction sites and require that all earth moving be done with teaspoons.

BuzzFlash: Specifically you talk about how the system isn't working when the CEO of a not-for-profit corporation can end up with a hundred million dollars when the organization is converted to for-profit status. How does that happen?

David Cay Johnston: Here's what happens. You can buy any non-profit interest. That's what happens when a foundation sells stock that it owns, or the Boy Scouts sell a building that they own to buy another building. But the historic rule says that the non-profit had to get the highest price. So whoever the highest bidder was, they were the ones who got to buy it.

Twenty-some years ago in California, this idea came under assault in the health care field, and there was a court ruling that allowed a conversion to take place where the assets were acquired through a note with less than half the market interest, actually, payable fifteen years in the future. For a fraction of a penny on the dollar, these assets were sold, and they made the owners fabulously wealthy. This has gone on with Blue Cross-Blue Shield plans all across America, and with all sorts of other health care plans. It has created a whole series of health care billionaires.

BuzzFlash: When you say the owners, aren't these really employees -- the managers, if it's a not-for-profit?

David Cay Johnston: Non-profits, by law, hold their assets in trust for the public. And you can buy those assets. The issue wasn't that they bought them. It was that they bought them for a fraction of their value. They bought them at below fire-sale prices, if that's imaginable. Imagine that you had a nonprofit hospital in your town, and you could buy that hospital for a thousand dollars a month of interest payments. Do you think you might make some money for that kind of price?

BuzzFlash: Why would the nonprofits sell at such a low price?

David Cay Johnston: It's a rigged deal from the inside. In one of the original deals that I expose, the California legislature actually passed a law allowing the operator of a big health maintenance organization called Family Health Plan to engage in what's called self-dealing -- that is, where he could put his own interests ahead of the nonprofit itself, and profit off of it. This is after he's been caught treating it as a cookie jar. And nobody knew about this yet. The legislature passed it. When the Attorney General found out about it, the court said, well, you passed a law that says you can do all this stuff. If they passed a law saying these guys can rip off the nonprofit, then they can rip off the nonprofit. And you have no jurisdiction, Mr. Attorney General. Go away. Case dismissed.

BuzzFlash: So you can be the head of a nonprofit and still financially benefit greatly from the sale of that nonprofit to the detriment of the public.

David Cay Johnston: Not only can, but you've been allowed to do it, in the area of health care. This is an outrage that the public should know about.

I'm married to the president of a community foundation, a nonprofit. In fact, there's a new study out today showing that lots of nonprofits are better managed than corporations, which is certainly contrary to our national myth. But you have to, by law, put the interest of the charity ahead of your own interests, by the "duty of loyalty," or a fiduciary duty. In the health care field, that was replaced with a duty that said you can go in and gorge on the assets of this nonprofit.

Here's the important second aspect. Once you've acquired these nonprofit assets for pennies on the dollar or less, the first thing that a newly converted for-profit health care company does is they spend a smaller portion of your health care premium payment, of your insurance payment, on health care. Instead, they take about an additional dime out of that premium dollar and spend it on executive salaries and money flowing to the shareholders.

So previously, you paid a dollar, they had maybe a ten percent overhead cost for management. And ninety cents out of your dollar went to your health care. When these conversions take place, it's eighty percent. And I show in the book that they boast to their investors about this. It's called reducing your medical premium loss ratio.

So why do we want to have a system where you pay more and get less? That's what it is. It is a system to pay more and get less back.It makes no sense.

BuzzFlash: You have a chapter on Paris Hilton's grandfather, Barron Hilton. Did you want to talk a little about that?

David Cay Johnston: Conrad Hilton asked that when he died, 97% of his fortune go to charity. Conrad Hilton told his own lawyer that his son "has too damn much money." And yet, Barron Hilton ended up with at least 250 times as much money as his father wanted him to have. And when he dies, he is required to give back to charity this money that he diverted from poor children. But he will be giving back after funneling off into his own pocket hundreds of millions of dollars. He's already funneled hundreds of millions of dollars into his own pocket, when the poor children of the earth were supposed to get the money.

BuzzFlash: How exactly did he do that?

David Cay Johnston: First of all, Barron Hilton and his lawyers told Conrad Hilton and his lawyer there was a mistake in the will. So, point number one, don't take advice on your will from your children, especially if you think they're conniving. Then, as soon as Conrad Hilton was dead in 1979, within ten days, Barron began moving to take control. He was rebuffed by his father's lawyer, who was a very old man at that point. He was rebuffed by the Internal Revenue Service. He was rebuffed by the Attorney General of California.

And then he finally got one court -- the same court that did the favor to the HMO industry -- to issue a ruling that muddied the waters. Conrad also wanted to make sure the Hilton hotels stayed in the Hilton family. So what did Barron Hilton do last year? He sold Hilton Hotels.

BuzzFlash: In other words, the money that he was able to reclaim was originally intended for charitable purposes for poor children.

David Cay Johnston: That's right. And eventually that money will go to poor children. But for all the years that Barron Hilton has lived since 1979, and as many years as he lives beyond, 60% of it will be devoted to him to the detriment of poor children. And for a man who goes around publicly proclaiming his piety, and being described in religious publications for his piety, to take from the poor suggests to me that he didn't read the New Testament.

BuzzFlash: We have here in Chicago a situation where a financier and mogul, billionaire Sam Zell, recently bought the Chicago Tribune Company. There's been sort of an understanding that the state would eventually buy Wrigley Field from the Chicago Tribune Company at what's being discussed as a premium price. Sam Zell, obviously owning the Tribune Company, would benefit from that sale. And then he would sell the Cubs to a buyer who would then rent Wrigley Field from the state. Is this like the example you were trying to make with the Texas Rangers before -- how the taxpayer, because the state is buying it with our money, is subsidizing a private corporation?

David Cay Johnston: This is a terrific example, and it isn't limited to sports. Big businesses are getting government to take the risks they don't want to take. They are getting government to take the properties they don't want to take, and in many cases, they are providing them the financing that they don't want to get from the market. The government will give it to them more cheaply. But that's more cheaply because you and I will make up the difference.

This is not market economics. This is corporate socialism. One of the reasons Libertarians like my book generally -- they don't like my escrow section, but they like it generally -- is because it's about market economics. It is offensive to a lot of Americans that we give money to people who don't work, regardless of whether they can't work because they're disabled, or they can't work because they're alcoholic, or whatever reason. Good grief, we're giving money to billionaires!

How many hours of the year are you willing to work so that Sam Zell, buyer of the Chicago Tribune Company, Donald Trump, Warren Buffett, George Steinbrenner, and all the other people I name in my book, can have more? Because that's what this book is about. It's about policies, some of them explicit, but most of them hidden, and some of them very cleverly and deeply hidden, that make you work, and that take part of your money, so that the very richest people and the most profitable corporations in our society have more money. I'm frankly not willing to spend one hour of my life working so that any of those people can have more money that they didn't get from the market.

BuzzFlash: Going back to the example that you gave in the beginning, when George Bush was general manager of the Texas Rangers, as I recall,the power of eminent domain was used to acquire a piece of land -- they forced the owners off. The Texas Rangers, meaning George Bush among the owners, used that to build a mall or something. It had no intrinsic value to the ballpark per se, but it was really just a land grab to then develop and derive profit from.

David Cay Johnston: This kind of land grab is going on all over the country. There's another chapter in the book about a woman named Kim Blankenship. She and her husband had a little garage where they were doing repairs on cars, and they were making a decent living. They created a half a dozen or so jobs. And then one day, the City of Toledo and State of Ohio decide that they're going to give the Chrysler Corporation $280 million of subsidy, part of which was to take her property so that they can build a new Jeep factory.

Well, it suddenly dawned on this woman, whose case went all the way to the U.S. Supreme Court, that she is being taxed to give money to Chrysler. Not to the city schools, not to the parks, not to the police, not to the fire department, but to Chrysler. And if the government can make her pay taxes and take her land to benefit Chrysler, then they could do it for another garage down the street, for the Mayor or for the city council. And that happens when her case gets through the courts and to the United States Supreme Court.

What did Chief Justice John Roberts do with this case? Well, they don't discuss the merits of it at all. His position is you have no right to speak up. We will not hear your complaint. You have no right to be heard by the court. You have no standing, in the words of the lawyers. That should be really troubling to people. And even the Tax Foundation, a conservative anti-tax group, opposed her. She said she was right on the moral grounds, but they opposed her on legal ground. The notion that the government can take your business so that some other business can get richer -- they can take your horse farm so that George Bush can become a multi-millionaire -- that's not the market. That's an astonishing development in this country, and it certainly is not the way we routinely did things not that long ago. We did do some of this in the late 1800s. It was a major public scandal. State constitutions were rewritten over this very issue.

BuzzFlash: How does the subprime lending scandal fit into all this?

David Cay Johnston: There's nothing in my book about the subprime lending scandal. There is stuff about student lending, and related to students. I'm 59 years old. When I went to college., college was virtually free. Even at state colleges now, the cost in New York State per year is equal to the average income of the bottom half of families in New York today. Yet you're supposed to finance your own education.

So the government allowed these private corporations to loan you money. People suddenly have all sorts of interest rates and charges racked up. And they ask where's the documentation? The students get told to go away because Congress passed a law that, if you borrow money to go to college, you have to pay it back. You can't get out of it. It doesn't matter that after you graduated from college, you couldn't find a job. Or you got sick. Or you were hit by a car, were in an accident. Or a criminal running away from a scene of a crime, shooting the police, a stray bullet hit you. You can't work anymore, can't work for awhile. We'll just pass on late charges and fees, and hound you until the day you die.

So guess what? The profits of the SallieMae Corporation are three times those of the average bank. And this is the way to build the future? If it weren't for the fact that so many more women are getting advanced degrees, the numbers of college degrees in the United States, the number of advanced degrees in the United States, would have dropped significantly.

BuzzFlash: Because of the cost.

David Cay Johnston: We've shifted the cost of education off of the taxpayers as part of the campaign to lower taxes on the people who've gotten the greatest economic gain. And it's possible for them to use your talent, your hard work, and become very well off. And to make that possible, we had to stop investing in things like higher education to the degree we used to. That's a great system for putting a lot of money in the pockets of some people today, but how does that build the future? How does that create a better-educated society for the future?

BuzzFlash: So, in essence, what used to be part of the greater public responsibility for your taxpayer-funded education now enriches the lending industry.

David Cay Johnston: That's right. And some of the people I write about in this book have publicly said they want to eliminate public education because "that's socialism." They want to eliminate parks. No child should be allowed to ride or play on a swing in a park unless they've paid a fee to use that park, according to their own literature.

Now the news media generally doesn't write about this. Most editors or producers would say they're not going to waste their time on the nutty things that they're saying. Well, if you don't do that, you're not telling people the full story of the agenda of these people. I think most Americans would be pretty surprised to find out that part of the agenda of being promoted by the people that came along with Mr. Reagan is to eliminate public parks. Get rid of them. They're "socialism."

Do you think living in Chicago, you'd be better off if your children's park was sold off to developers? Or Central Park was sold off for more apartment buildings? Or Golden Gate Park in San Francisco was sold off so that somebody could put up office buildings? But that's the argument made.

BuzzFlash: In your book, you also get into the issue of profiteering from homeowners' title insurance.

David Cay Johnston: Yes.

BuzzFlash: That seems like an awfully obscure area to most of us. Why is that significant?

David Cay Johnston: Well, 70% of Americans own their own home. And only half of them get any benefit from the government for owning their own home, because of several changes in taxes. When you buy a house, you sit down and sign all these papers. And they shove all these things in front of you, saying initial this, and sign that. You'll notice there's a bunch of fees you pay -- $15 document fee, $25 filing fee. But there's one big fat one, usually equal to a half of one percent of the cost. If you're buying a $200,000 house -- that's $1,000. It's called land title insurance. And most people don't even understand what it is.

Oh, that's to protect you if somebody comes along and says I did work in this house ten years ago and never got paid by the owner, so you're now going to be liable for it. Or your next-door neighbor says that the patio on the house you're buying sticks a half inch onto his property. Well, 90 cents on the dollar -- $900 of the $1,000 -- goes to bribes. They're politely called referral fees, but they're commercial bribes. And the lawyer representing you, or the real estate agent, or the mortgage broker, or some other party, is getting kickbacks and favors, and free lunches, and tickets to sit on the floor at the basketball games, or in the box at the football games, in return for steering that business to you. Only a couple of pennies of your dollar are actually going to protect your interest in the property.

Europe doesn't have title insurance. Puerto Rico doesn't have title insurance. You don't have to have title insurance if you change the legal system to have a more efficient system. Imagine saving one half one percent of the purchase price of every home in America. What a benefit to the economy that would be, and to the people making the purchases.

So that's what you should fear. Half a penny here, and an extra two cents over there, and an extra seven cents over here -- pretty soon it's bad luck to your pocket -- it's empty.

BuzzFlash: In the case of homeowners with title insurance, what could happen if that wasn't there?

David Cay Johnston: There are two ways you can do it. You can go to what most countries in the world have, which is a land registration system. And under that, there's a public record made of claims, and you inspect the record. And if the claim isn't there, then nobody can make a later claim on your property. That's one way to eliminate this problem.

There would still be mistakes, so you might have to go and create some fund to address irregular or unusual mistakes. The example I give which comes from my own life is what happens with a seven-year-old boy who had an interest in something, and nobody tells him about it until he's a grown man. And he suddenly shows up.

But the system of paying kickbacks -- these are crimes. Here's an entire industry who is run routinely on the commission of crimes. You know, this kind of institutionalized corruption that we think goes on in Latin America and Arab countries and Africa -- guess what? It goes on right here every day. And everybody looks the other way.

We could also deal with it by having the banks buy the insurance, the mortgage lender, which would make it vastly more efficient, because they would self-insure.

BuzzFlash: You have five researchers working on this book, Free Lunch.

David Cay Johnston: Five reporters, two researchers.

BuzzFlash: It's obviously a very successful book, but you have devoted the latter part of your fine journalistic career to this area. And you have five reporters and two researchers helping on the book. How would the average American even begin to expect on a daily basis to stay informed as to the regulatory policies of the government at every level, given it takes so much, as you've shown in the effort put out just to write this book? How can an average American do that? How would one begin to even know about a lot of these policies, other than reading your book?

David Cay Johnston: Every great advance to individual liberty and social improvement has been the result of a struggle. A lot of people have sacrificed and even died so we could have this country. Six hundred thousand Americans died in the Civil War. Yet we make progress. People have to know about this. You could have asked the same question of Upton Sinclair, who wrote The Jungle, revealing the scandal about the meat-packing industry.

When people have information, they have power. And the fundamental principle of a democracy is that we govern ourselves. What's happened in our society is that large numbers of Americans have turned off to politics.

Now, we've seen, in the last three elections, a resurgence of people turning out to vote. That's an incredibly important and wonderful development for our country. Once people know these sorts of things that I have dug out, they can begin to frame the questions and ask of their political leaders what's going on here?

The core problem to address, though, is the campaign finance system. In the book, I propose an alternative to this continued effort to regulate campaign financing, because after 35 years, I think we can definitively say it hasn't worked. It's made things worse. And the Supreme Court has been stunningly hostile to this idea, and has effectively equated dollars with free speech. So I have this proposal which I hope will stir debate about how we address this issue that I call politician finance reform with zero power. It is that, once you're elected to office, you have an unlimited expense account with complete disclosure of the money you spent.

Senator, if you really need to go to Tahiti and inspect the cleanliness of the sink behind the bar at the resort as a part of your duty on the health commission, to make the country better, you go right ahead and spend the money. But we want to know every penny you spent, who you talked to when you were there -- a complete record of it. We're going to put it up on the Internet, so that intermediaries and even ordinary people can appreciate and understand. The price for that rule is that if you take anything from anybody, you take a shot of whiskey from a lobbyist, you go to prison.

Now some people have already said that's a negative idea and it won't work. Okay, maybe it's not a good idea. Then propose your own. Let's get a debate going about how we make our democracy responsive to the people, not the people with money. Because if we don't do that, we are hastening the day when high school students are going to sit down in the classroom and pick up a textbook. There's a chapter that will begin with the words: " The United States of America was ..."

BuzzFlash: With that, thank you so much. It's a great book, and I'm glad it's doing so well, and deservedly so.

David Cay Johnston: Thank you.

BuzzFlash interview conducted by Mark Karlin.

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