Lobbying Lifts the Bottom Line

One of the most helpful articles I've seen on the proposed U.S. regulatory overhaul was this Wall Street Journal piece. It handicaps the likelihood of the blueprint's central concepts coming to fruition. The concepts include, among others, the following:

• the merging of market oversight (unlikely, probably);
• creation of a mortgage commission (unlikely);
• elimination of the thrift charter that makes banks national (quite unlikely); and
• oversight of state-chartered banks (possibly).

What struck me, though, was the extent to which the author linked likelihood to lobbying. That is, the stronger the lobbying might of a party opposed to the concept, the less likely the concept is to become reality.

Perhaps I shouldn't be surprised: lobbying benefits appear to reverberate beyond influence. A new academic study that looks at the connection between corporate lobbying (at the federal level) and financial performance concludes that the connection is lucrative. The findings suggest that lobbying activities significantly and positively impact the bottom line of companies who do it.

I've never covered this topic for CFOs; given the study's results, maybe I should start.