Michael Lissack (although thank you Michael Milken for giving the world that impression) there are lawyers, expert advisors, public bureaucracies, and organized in- terest groups. It was Kurt Vonnegut who observed: “in every big transaction, there is a magic moment during which a man has surrendered a treasure, and during which the man who is due to receive it has not yet done so. An alert lawyer will make that moment his own, possessing the treasure for a magic micro- second, taking a little of it, passing it on.” Lawyers are not the only ones to profit from these precious microseconds. Brokers, investment bankers, and consultants of various kinds are among the fortunate ones who are similarly situated. These professionals are commonly involved in transactions where the amounts at stake are so large in relation to their compensation that they encounter little resistance to their fees. When hundreds of millions of dollars change hands, even a tiny percentage fee yields handsome returns, but who is to complain? Well, when it is the public’s money that is involved, we all should. I must begin this section with a disclaimer. For nearly fourteen years I made quite a good living assisting state and local governments arrange for quasi-legitimate transfer payments from the Federal government. The “quasi” is somewhat troubling. Congress does not sit down and allocate which state or locality will get what. Instead the money is there for the tak- ing. What bankers such as myself do, if we are “good” by the standards of the industry, is help each locality make its take of the pot as big as possible -- regardless of the cost to the federal taxpayer. This is a pure outgrowth of fiscal federalism -- each jurisdiction is out for itself. But I am not writing in complaint about the behavior of the localities. They did what any interest group would do -- seek to maximize benefits. What I am writing about is the parasitism that accompanies such activity -- for it is symptomatic of the troubles our overall system faces, i.e. theft. The problem started innocently enough. States and localities routinely borrow money for capital projects much like you and I would borrow money to buy a house. As our world moved into the latter half of the twentieth cen- tury and our infrastructure needs grew, borrowing needs grew in parallel.
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