Trojan Horse Slaughter

As Americans watch Europeans condemn the discovery of horsemeat in their Ikea meatballs, we can take some solace in the fact that, for once, we’ve sidestepped an industrial food-related travesty. Our complacency, however, could be short-lived. Although less dramatic than horse DNA adulterating ground beef, another horse-related scandal is about to implicate U.S. citizens in a scheme that will send tainted horsemeat into foreign markets while enriching U.S. horse slaughterers with taxpayer dollars.  

The last U.S.-based horse slaughterhouse closed in 2007. The phasing out of horse slaughter in the United States ended the exportation of U.S.-produced horsemeat to Canada, Europe, and Japan. This development, among other accomplishments, spelled the decline of a niche business that profited from a product that American taxpayers financially supported (through USDA inspection of horse slaughterhouses) but were loathe to consume (plus, it's illegal to sell horsemeat in the U.S.). 

Did Lobbying Contribute to the Financial Crisis?

The answer is a firm yes, at least according to three IMF economists who studied the correlation between firms' lobbying efforts, financial risk-taking, and default rates. Their findings (abstract here; full report here) show that:

[L]obbying was associated with more risk-taking during 2000-07 and with worse outcomes in 2008. In particular, lenders lobbying more intensively on issues related to mortgage lending and securitization (i) originated mortgages with higher loan-to-income ratios, (ii) securitized a faster growing proportion of their loans, and (iii) had faster growing originations of mortgages. Moreover, delinquency rates in 2008 were higher in areas where lobbying lenders’ mortgage lending grew faster.