Ecosystems are subject to invasion, e.g. by spotted knapweed. Likewise in political systems. When governments create programs to redistribute wealth, opportunists, like noxious weeds, crowd out intended recipients. Unfortunately, any effort to aid a particular group invites those with connections and power to exploit the program.

Louisiana is notorious for its corruption. I lived in New Orleans for three years and enjoyed much of it, but ultimately escaped to Bozeman. “Louisiana: Third World and Proud of It” was a popular bumper sticker. Humorous as this may be, sadly it’s often on target.

New Orleans is America’s most European city, and I certainly like Louisianans. However, the city resembles, physically and politically, the capital of a banana republic.

Louisiana Senator Mary Landrieu recently won a runoff election against Suzanne Terrell. Landrieu, a Democrat, touted her record of voting with Bush 75 percent of the time. This summer she proudly announced that she had funneled $13.3 million of a Navy contract to a Louisiana company.

She failed to mention an important fact: According to the Center for Responsive Politics, the company’s owners and others associated with the deal had just contributed $11,000 to her reelection campaign. Worse, three months earlier the Navy had disqualified this company for incompetence.

We expect such payoffs in a banana republic, but in America? Sadly we’ve created institutions that encourage such corruption.

President Nixon did some very bad things, for example, Watergate. However, the huge damage of his economic policies is often neglected.

As a Republican, Nixon should have favored free markets and opposed government interference. Instead he imposed price and wage controls, vastly expanded government regulations, and generally used economic policy to buy votes.

One of his programs is the Small Business Administration’s 8(a) Minority Business Development Program. It was established to give government contracts to small companies owned by members of such historically disadvantaged groups as blacks, Indians, and women. While the rhetoric of supporters is noble, the results are perverse. Opportunists circle and scavenge such programs whenever they are created. Here’s how they work.

Governments, even ours, inevitably function as conduits for the transfer of wealth, be it money, resources, or opportunities, from one group to another. The best-organized gain the spoils. “Need” justifies the transfer but rarely has any relation to the true status of the actual recipients. In general, the productive subsidize the politically connected.

Handouts and preferential programs for the “disadvantaged” may help some who are truly in need. More often they stifle incentives, create and nurture dependency, and provide opportunities to exploit the government’s power of plunder.

The SBA’s Minority Business Development Program and similar set-asides have been gamed by politicians and the well-connected. Forbes recently reported on the success of a former Pentagon clerical worker, J. Maria Whitmore, in securing a ten-year, $698 million Navy SBA contract. Ms. Whitmore is indeed an African-American business owner, but some of her partners in the deal are neither minorities nor disadvantaged: e.g., aerospace giant Lockheed Martin and software company Intergraph. And Ms. Whitmore admits to having no idea who’s working on the contract (except her husband, two sisters, mother, and two other relatives) or how much work has been done. This contract enabled Senator Landrieu to reward contributors who helped secure her reelection.

The SBA minority preference program is not alone. Under the Federal Communication Commission’s racial preference program, a minority-dominated group that included former Charlotte, NC, mayor Harvey Gantt, a black, “won” an FCC license to build a TV station. Less than four months later they sold it to a white-owned company for a reported $3 million. The “disadvantaged” Gantt netted about $400,000 on the deal for a return of over 800 percent.

The intent of America’s Founders was to minimize the federal government’s scope of activity and avoid such piracy. But this scope naturally ballooned as politicians sought favors and funds for their supporters and more power and influence for themselves.

Were the government’s powers and authority returned to their Constitutional limits, milking it for favors would yield considerably less cream. All citizens, disadvantaged or not, would then compete for rewards in the marketplace based on the value of their products, not their political contributions.