By DAVID MOON, Moon Capital
October 10, 2004
Alexis de Tocqueville was the son of an aristocratic French politician.
He lived with all of the trappings of unearned wealth and appointed power.
He had the finest private schooling, studied philosophy and then become a
lawyer. By the time he was 35 years old, he had already served as a judge,
Assemblyman, Chamber of Deputies Representative and as the French minister of
foreign affairs. His greatest contribution to the political process,
however, occurred after he traveled to America and penned the two volumes
of Democracy in America, in 1835 and 1840. Many historians still
consider the work as the most thorough and insightful political tome ever
complied about the United States.
In the book, Tocqueville makes a timeless
observation: 'The American Republic will fail when politicians realize
that they can bribe people with their own money.'
How sad. And timely.
I thought about Tocqueville as I read plans of both presidential candidates
to provide high-speed Internet access to every American. That's right:
Internet access. (I am still trying to verify the rumor that negotiations
are underway to amend the Pledge of Allegiance to include the phrase, 'with
liberty, justice and broadband for all.') In March, President Bush
declared 'this country needs a national goal for universal, affordable broadband
technology by 2007.' John Kerry calls for $2 billion in tax credits that
would lower the current $30 average cost of monthly broadband access.
In 2003, 28.2 million homes and businesses had high speed Internet access, up
42 percent from 2002. Kerry and Bush want to solve a problem already being
addressed by supply and demand. This is a solution in search of a
problem. And these candidates want to 'solve' the problem by bribing us
with our own money. Who do you think will pay for this expanded, low-cost
As long as taxpayers are convinced the benefits they receive are paid for
with other peoples' money, this and other little bribery Ponzis will continue to
A conservative republican senator recently spoke to a group of his
supporters. For most of his speech, he sounded like Ted Kennedy. His
remarks were mostly a litany of locally managed, federally funded programs he
worked to get approved, along with the new funding he would secure for his
constituents if they would raise enough money to send him back to
Washington. What a deal! Not only are you going to bribe me with my
own money, I can give you money to help you get in a position to do the
bribery. Now how could I pass that up?
On a federal scale, the gambit actually predates the 16th amendment to the
constitution, when Congress passed a two percent flat tax in 1894. Those
revenues eventually allowed people in Washington to dole out favors to
constituents and contributors.
Speaking of constituents and contributors, as of August, telecommunications
and equipment sector businesses had donated $62.6 million to candidates during
the 2004 election cycle.
I wish Tocqueville could moderate Wednesday night's debate on domestic
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).