Friday, September 26, 2008

The Politics of Financial Collapse

Politicians are a strange breed. They vie for votes among the electorate by claiming some variation on “send me to Washington (or Wichita) and I will (1) reform government (process and tone – e.g., restore congressional collegiality); (2) be the good steward of the people’s resources (eliminate all the fraud, the secrecy, and the wasteful spending by other Members; and (3) ensure the Pentagon is properly resourced so as to dominate the rest of the world (and ensure that businesses in the district/state get military contracts and that I get credit for creating jobs).

Now I cannot imagine anyone – incumbent, challenger, and voters – who would not affirm these three principles of national and international governance.

Unfortunately, those elected to represent the people – “to do the people’s business – seem less and less capable of moving from the “in principle” to the “in action” stage. The result has been legislative gridlock on a massive scale with the federal government having to operate through continuing resolutions and Omnibus Appropriations legislation that Members neither read nor debate and have no idea what they are enacting until staffs get copies – sometimes not until after adjournment.

This chronic failure has produced two further aberrations. Congress more and more is enacting legislation that effectively transfers its responsibilities under the Constitution to the executive. As a result, the tendency of the executive to draw power to itself is reinforced, and under the current president has reached an unprecedented level in the history of the republic. The second aberration is governance by regulatory agency and secret and not so secret presidential edicts and signing statements.

The upshot of all this is governance by negation – no laws that might place limits on presidential powers or options, no oversight of regulatory agencies because Congress has become a “cheerleader" for the unregulated market instead of an interrogator of that market. But it seems to have no slack for individuals with mortgages they can no longer manage.

It is often pointed out that some institutions – and seemingly most are in the financial sector – are so large that the government cannot afford to let them fail (hence the buy-outs).

Well, I think the American public as a class is too big – and perhaps too angry – for Congress to fail to devise a principled program of action –and to act.

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