On the DC gravy train, best go club class

Out of America: A new book shows that Washington's booming – but only for a lobbying, lawyering elite that persists, whoever's in power

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In this city of inflated egos and dysfunctional government, there is a ritual known as "the Washington read". Bigshot X goes into a bookstore, picks up the latest political memoir or exposé and flicks through the index to check if his name is there. A contented purr if it is, severe loss of self-esteem if it is not. Of the book proper though, he will not read a word. This Town, however, has no index. And it's the best Washington read in years.

That the US capital, the earth's last imperial city, is a strange place is no secret. Administrations come and go but a permanent establishment remains, an incestuous stew of politicians and ex-politicians, media, lobbyists, thinktanks and consultants, all of them prospering mightily, even as the rest of the country is laid low by recession.

Inherent conflicts of interest are massive but taken for granted. The last chairman of the Federal Reserve, the most powerful central banker on the planet, is married to a senior NBC correspondent. Another reporter's husband is the city's hottest lawyer; a recent Senate majority leader's spouse is a top lobbyist in This Town. And there are many more examples.

Every democracy of course has an unelected elite, the modern equivalent of a medieval royal court, but none to match the one that thrives in Washington DC. Live here a while, and you take it for granted. Then you read Mark Leibovich's amazing, hilarious piece of reportage, and you wonder anew just how the free world is led from a moral swamp.

This Town takes its title from the knowing, slightly self-deprecating term that insiders use for Washington DC (as in "that's how it is in this town" to explain away some sin of the hour). But not only are these sins invariably forgiven; they're not really seen as sins at all. In part that's because there's no one to point them out: no Private Eye, no red-tops to prick bubbles of vanity – and God, how Washington needs one. Here phone hacking is carried out not by News Corp, but by the National Security Agency.

As a result, for Washington's permanent elite, shame does not inhibit, ridicule does not deter. No comeback is too preposterous once you are a member of what Leibovich calls "The Club". Even Jack Abramoff, the super-lobbyist who ripped off tribes of Indians, bribed everyone in sight, and took his Congressional pals on all-paid golf trips to St Andrews, is back, after a spell behind bars, with a book and a cable-television slot.

Edwin Edwards, the colourful, splendidly corrupt former governor of Louisiana, who later spent time in jail for racketeering, was once asked if he could lose an election. "Only if I'm caught in bed with either a dead girl or live boy," came the reply. Much the same applies to disgrace and redemption in Washington DC (see Bill Clinton, William Jefferson, passim).

On the other hand, watch out if you're not a member of "The Club", and you upset the applecart. Leibovich cites the case of Michael Hastings, the Rolling Stone reporter – tragically killed in a car crash in Los Angeles a couple of months ago – whose irreverent, deftly reported 2010 profile of General Stanley McChrystal, the top US commander in Afghanistan, led to his resignation.

Hastings was not a Washington insider, and was widely condemned within the establishment for having somehow broken rules of confidentiality when exposing indiscretions by the good general and his staff. In fact, the best Washington stories usually come from outsiders, as were Bob Woodward and Carl Bernstein, humble Washington Post metro reporters in 1972 when they were assigned to the Watergate break-in story. Woodward, these days toiling under his own gravitas, is now a board member emeritus of "The Club".

And you can understand the commotion. Why put the gravy train at risk? Washington's media-politico-lobbying complex is doing brilliantly. The real world has faced the worst economic slump in 75 years, but in the capital you barely notice. DC is America's 21st-century El Dorado. There are 3,143 counties in the US; of the 10 richest measured by household income, seven are clustered around Washington.

This boom has three overlapping reasons. One is the growth of the federal government, as a result first of 9/11 and then of the financial crisis. The second is the explosion of electronic media, turning the city into a giant 24/7 echo chamber; the third reason is the proliferation of lobbying, or less politely put, legalised influence-peddling.

Again, a few figures. There are 12,000-odd registered lobbyists here, and $4bn is spent on lobbying the federal government; which works out at $333,333 per lobbyist, nice work if you can get it. And many can: half of retired senators now go into lobbying, against 3 per cent in the 1970s.

The pickings from federal elections are huge also. A record $6.3bn was spent on the 2012 cycle, rich pickings indeed if you can get a slice of the action as a consultant, "strategist" or whatever.

An ambitious new administration represents a goldmine as well. Take the massive bills reforming health care and regulating the banking system (to be joined perhaps by an overhaul of immigration laws). The legislation is an unwieldy, unreadable mess. But, oh the money it generates – for the lobbyists paid fortunes to slip in loopholes and exemptions, for cable TV talking heads, and the fat cats who pull down five-figure speaking fees. The bigger the fight, the more polarised the politics, the less that gets done; the better for "The Club" and "This Town".

Can it go on? Congress's approval rating is in single figures, vying with that of cockroaches and colonoscopies. Leibovich's book, naming names and with chapter and verse on Washington's dreadful, self-congratulatory culture, is a bestseller. "This era has reached a tipping point," says the author. Somehow though one doubts it. Who'll kill the goose that lays the golden eggs?

'This Town: Two Parties and a Funeral – Plus, Plenty of Valet Parking! – in America's Gilded Capital', by Mark Leibovich, is published by Penguin America

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