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On July 1, 2010, on the precipice of another July 4th celebration, President Obama told an audience that immigration was, in sum, “broken.” Furthermore, “everybody knows it.”  Yet neither he nor the Democratic leadership in Congress had any expectation of passing an immigration law in 2010.  Into this void, Arizona had months earlier passed its own law aimed at tightening enforcement. The New York Times reported that in his speech in July, Obama “used the opportunity to repeat his opposition to Arizona’s new law requiring law enforcement officers to question the immigration status of anyone they stop for other reasons if they suspect that they are in the country illegally, calling it ‘ill conceived’ and ‘divisive’.” The President said, “We face the prospect that different rules for immigration will apply in different parts of the country, a patchwork of different immigration rules where we all know one clear national standard is needed… . Our task then is to make our national laws actually work, to shape a system that reflects our values as a nation of laws and as a nation of immigrants.”  Different rules sounds like different immigration policies—as in who can enter the US.  If the President meant this, then he had a point. However, if he was arguing that tailoring different enforcement mechanisms to different regions, it could be argued counterwise that e pluribus union in a federal system not only allows for it, but thrives by it. In other words, the empire-scale of the US warrants a diversity of approaches. Furthermore, a federal system enables and indeed is strengthened by it.

Rather than looking at Arizona as a threat to the turf of the US Government, we can look at the state’s effort to enforce the US immigration law as a helping hand.  To be sure, there is a danger in the two governments helping each other out too much, for one of the benefits of federalism is that the state and federal governments operate (ideally) as checks on each other.  So they are not partners.  This is not to say that the state governments cannot act within federal law.  Arizona’s law does not conflict with federal immigration law, as the latter allows for people who are suspected of being in the US illegally to be stopped.  Arizona’s law requires another police matter—which is actually looser than the federal law.  The fear may be that enhanced enforcement would come with costs, and this cannot be denied. If the immigration system is broken as the President said, we ought to be willing to deal with them. Moreover, with the system being admittedly broken, the US Government is in no position to cherry-pick in accepting help.  Ironically, had that government been more focused on domains that cannot be covered by the state governments, it might have done a better job. The person who tries to be a jack of all trades does not do justice to any of them.  The President said that immigration is on his government’s turf, yet is there anything that is not? I contend that his government would be more effective were he to concentrate more on delimiting the enumerated powers rather than fighting for an exclusive right.

Source: http://www.nytimes.com/2010/07/02/us/politics/02obama.html?_r=1&hp

In 2009, Congress appropriated $16 billion in earmarks. In March of 2010, that the House eliminated earmarks to for-profit companies. However, enterprising managers soon found a way to get around the restriction. I contend that figuring ways to get around restrictions is the default in corporate responses to regulations where the latter cannot be used for strategic advantage.

In Marcy Kaptur’s (D-OH) district, a defense contracting company incorporated a nonprofit organization, the Great Lakes Research Center, at the same address and doing the same work. The center received earmarks of $10.4 million to sell the Pentagon small hollow metal spheres for body armor. Kaptur, who had received tens of thousands of dollars in campaign contributions from the owner’s family and the company’s lobbyists told the media that the center “met the requirements of the Reform.” If this is true, the reform was in effect nugatory—so one might ask: why did the House go to the trouble unless for the short-term PR benefit? There is a deeper problem in even the appearance of a conflict of interest wherein a lawmaker has a role, whether direct or indirect, in money going to an organization that has contributed to the lawmaker’s campaign. Even if not intended, the conflict of interest should be sufficient as a red-light, yet as long as money is not being used by the company’s owner for personal use, such conflicts of interest are typically ignored.  I contend, however, that both types are equally sordid and hence that we should be on guard for them both.  If I am correct, there is an unduly lax and restrictive attitude in the US toward institutional conflicts of interest. This lapse has in turn enabled corruption in the Congress.

Source: Eric Lipton and Ron Nixon, “Companies Find Ways to Bypass Earmarks Ban,” NYT (7/5/10), 1A.

See http://www.nytimes.com/2010/07/05/us/politics/05earmarks.html?_r=1&hpw

Barak Obama has a tendency to modify his manner of speaking, and even his dialect, to fit with his audience. Listening to his speech to the National Urban League, I was stunned; early on, he pivoted off from his ordinary manner of speaking to speak in what was surely a more familiar way to much of his audience. The crowd loved it. The audience must have been looking at him as the first black US President. It occurred to me while listening to him and observing his strategy to connect to his audience that although there would be less political advantage in it, he could have run for president by presenting himself as multi-racial (technically, mulatto). To be sure, there are less multi-racial Americans who would identify with him, but is that even the point? The multi-racial segment of the US population is small, but growing.  It points to what most states will look like in fifty or a hundred years from 2010, when I heard the multi-racial US President speak. Were Barak Obama to make explicit his multi-racial identity (his mother was caucasion and his dad was black), he could personify the leading edge of what America will become, and thus serve innately as a leader.  That is to say, he will have led through his person—as a symbol personified—as the a sign of things to come.  The USA  is finally becoming a real melting pot, transcending “black vs. white.”  Nature’s integration will solve the artificial problem of racism far more than any government program or even a US President who identifies himself with one “side.”

Perhaps it is the tacit duplicity in a multiracial man permitting himself to be labeled as black, presumably for political expediency, that lies at the core of why some people do not trust him (e.g., the “birthers”).  Such duplicity is like a subterranean fault-line undergirding the tension between campaigning for real change and then stocking people of the old guard, such as Larry Summers, in his administration.  The duplicity of promising systemic change then dropping his insistence on a public option and no mandate for health coverage—essentially guaranteeing a new mass market to the same health insurance companies that actively purged people with pre-existing conditions—finds a resonance in the multi-racial man using the term “black.”  Were it to be said that the “one drop” criterion still applies so he really is black, we would need to start calling a whole lot of caucasions black as well. Moreover, to use an antiquated and faulty criterion as though it justified Barak’s practice is itself a mark of duplicity.  Barak Obama is as much white as he is black.  Were he to “run with this,” he would instantiate a leader on the forefront even though there is little political capital to be made on it.  However, the US Presidency is an office that is geared to representing the people of the US—the office does this most tangably when functioning abroad. As an explicit multi-racial symbol, President Obama would show to the world where America is headed, and that we are facing that future with our heads held high and with  pride. While perhaps not helpful in elections here at home, such a function, which can only be done by the US President, is sorely needed, given America’s image abroad. We are finally becoming the melting pot that has been proclaimed for so long—finally getting past the need for duplicity.  President Obama can symbolize this in his person, and thus do America a service far more valuable than any legislation.

At the end of April, 2009, U.S. Senator Richard Durbin blamed the powerful banking lobby for the defeat of legislation that would have allowed bankruptcy judges to modify some troubled mortgages.  Even as mortgage servers were claiming to be overwhelmed with requests from distressed borrowers for readjustments to the adjustable-rate mortgages (ARM), the banks and mortgage companies felt the need to stop the US Senate from enabling judges to relieve the backlog. Durban later said in an interview, “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” he said on WJJG 1530 AM radio's  “Mornings with Ray Hanania.” On October 30, 2009,  James K. Galbraith spoke on the Bill Moyers Journal on the bank lobby changing the financial system regulation reforms now being discussed in Congress.  That that lobby feels itself to be in a position to advise the Congress on a matter in which the banks were part of the problem is something that blows Galbraith away.   They should realize among themselves, or at the very least BE TOLD that their involvement is not helpful or appropriate.   Galbraith pointed out that we have a pretty good idea of what needs to be done governmentally to stave off another financial crisis—such as separating the commerical banking and investment trading (on the bank’s equity even!) functions and reducing the scale of the banks too big to fail.  However, there are a hundred reasons why the governing class will not follow through. 

For one, we can look back to Durbin’s comment that the banking lobby owns Congress.   The conflict of interest in the owner of Congress keeping Congress from legislating on the industry is a suffiicent basis for worry; that the lobby presumes itself to be in a position to advise or pressure on banking regulatory reform and that the lobby still has the muscle to see that it is still invited to the table strikes me as emetic.  It shows the arrogance of the corporate world and the corruption of the governing class.   The housing bubble and sub-prime mortgages were in the interest of both, and yet reform strangely is not.   I would add that any voter who goes on, business as usual, in voting for an incombant is contributing to the perpetuation of the  squalid system that we are now enjoying.

Imagine, just for a moment, that a friend or neighbor insults you.  You invite some other friends over to figure out how to deal with that friend or neighbor.  You are shocked when he or she walks in your front doorway (no need to hide) and sits down in your living room with the others.  Not only that, he or she presumes to advise the group, adding pressure or outright threats that the group had better come up with something that is good for him or her. Here’s what I’m getting at: focus for a moment on the attitude of the friend or neighbor.  In our normal interpersonal relations, we would rationally conclude that the person is delusional and excessively self-absorbed.  We tend to let positions or organizations keep us from viewing their people as other (flawed) human beings.   Arrogance built on presumption concerning a matter on which the person has screwed up and others are hurt  is or ought to be a huge red flag for the rest of us (and our representatives!).   I find this attitude to be far more difficult to understand and accept than the fact that industry lobbies have an inordinate amount of power in Washington. 

I find myself thinking about the nature of presumption that can manifest as an illness where it is beyond the pale. That the person involved probably doesn’t even see this suggests to me that a rather dysfunctional lot has congregated in the upper rafters of American banking.   What kind of a person pushes for his or her advantage in the efforts by others to clean up one’s mess?   That they are allowed in the room is alone a sad testament; that our representatives are actually succumbing to them is sordid indeed.   Of course, it is in the interest of big business that the political power be concentrated among the governing class in Washington.   We are mere bystanders as the dance unfolds. 

Sources:

http://www.politico.com/news/stories/0409/21962.html
http://www.huffingtonpost.com/2009/04/29/dick-durbin-banks-frankly_n_193010.html
http://www.huffingtonpost.com/2009/04/29/dick-durbin-banks-frankly_n_193010.html  (“own the place” quote)
http://www.pbs.org/moyers/journal/10302009/profile.html

Is the typical American self-centered and greedy, or is there a civic-mindedness that yearns to bracket one's own interests?  In other words, is there more to American society than being the sum of the parts? Is there something more than the aggregate?  I don’t mean to criticize individualism here; creativity and liberty, for example, are individualistic traits that highlight a person's character and virtue. Nor do I mean to point to one of the two major parties. One could point to the democrats protecting unions at the expense of a free market for labor just as one could point to rich republicans holding tax cuts hostage unless they are included even though they could afford higher taxes.  If there is something more to American politics than asserting one's own interests, who is to represent the civic component?

The American Founding Fathers assumed that a given republic requires a certain level of disinterestedness or impartiality among the citizenry. The Founders thought that gentlemen freed up from the pressures to make money were obliged to serve in government precisely because selfish monetary pressures would be less pressing among the already rich. So the Founders were startled when common folk began winning more state legislative seats.  The concern was that the immediate economic interests of the folks would carry the day over what would be needed legislatively for the public good.  Reading this, a modern American is apt to be surprised that the Founding Fathers might not have been so populist as the American mythos might have suggested. The Founders might also be critiqued for being blind to the possibility that moneyed gentlemen might legislate in the interest of their class at the expense of the folks. In short, American populism may not have been an ideal at the inception of the union of states. The question here is less historical, however, than on how and by whom the pubic good might be asserted.

Lest one look to the presidency, the sheer amount in financial backing renders the occupant captive to the financial elite, which in turn has a vested interest in its own interest and the status quo in which it has done so well.  Real change in the public good at odds with the status quo is not likely to come from the White House. Lest one look to the U.S. Supreme Court in protecting individual rights, the fact that justices are nominated by the president and confirmed by the U.S. Senate, which among other things represents wealth, suggests that the high court will stamp rather than impede extensions in Congressional and presidential power, which in turn has a strong financial-interest backing.

The question of standing up for the public good where the financial elite such as Wall Street has a direct financial interest in perpetuating systemic risk was at the fore in the wake of the financial near-meltdown in September of 2008.  The subsequent banking regulation reform was highly watered down by Wall Street's involvement in the very writing of the law. For example, the existence of investment and commercial banks that are too big to fail was not seriously questioned, not to mention confronted. Instead, "incentives" not to increase further in size were included. Whereas in history monoliths such as Standard Oil and ATT were broken up by the high court, Congress could not bring itself to break up the still risk-prone banks even in the wake of the banks' self-induced crisis.

So the question remains: what of the public or common good--the public square that goes beyond the sum of the parts?  Who, if anyone, is to stand up to the vested interests to push through real change that is necessary to the survival of the United States as a going concern?  I suspect that the usual suspects have the American public debating secondary issues so such primary questions are kept off the radar screen of public discourse. Lest it be forgotten, the American media companies are interwoven into corporate America. There may be a vicious self-perpetuating feedback cycle wherein the public is kept from raising a movement that would question the matrix on which the financial elite has thrived. The question may thus be whether this cycle can even be broken.

Al Gore stated that we face a choice regarding whether the earth’s ecological system will remain viable for our species.  He cites the carbon that is frozen in the permifrost in the north.  As the permifrost melts, carbon is added to the atmosphere, making it “difficult” for the human species to live.   I am not a scientist so I have no means of knowing what the state of the research is on these matters.  Nor am I particularly interested in debating it.   In my view, if there is a chance that we could be effectively ending our our species, we ought not to be held back from acting in a prudent fashion even if it is “just in case.”   I understand the economic costs, and that some are particularly attached to short-run costs (and less enamoured with long-term benefits).  Still, that the debate itself would be allowed to stall even a “just in case” response reflects badly on our species.   At a worse case, it could be something like two parents debating which of them will get their baby out of their burning house.  Meanwhile, the baby burns.   We would call that a dysfunctional family, would we not?  Still, no such appellation goes to those involved in the continuing debate on climate change.
It strikes me that we as a society may be too innured in our own presumptuousness to even realize how badly we are handling such decisions.  I can’t believe that the society is predominantly made up of the two, rather vocal, extremes on the matter.  The extremes are presumptuous in their determination to continue the debate unless they get exactly what they want while the rest of us have been guilty of allowing them to dominate the decision-making process.  Consider, for example, a reasonable person saying, “ok, we need to make a decision,” and one is made.  The refusal to make compromises (whether an extreme in the US following a rigid ideological agenda or the Chinese government presuming that national sovereignty is absolute) is not only childish, it is rather arrogant concerning that the eventual demise of our species might hang in the balance.  Even this “might” should be a wakeup call that posturing and debating evince a selfishness that the rest of us ought not to countenance.  Yet we do.  We are too passive, those of us without a dog in the fight.   The truth is, we all have a dog in this fight.  Are we to be survived by cockroaches?   Wouldn’t it be fodder for a divine comedy were the antics of the cockroaches superior to the presumptuousness of humans?   The species left standing is the one that wins.  

I can visualize a later generation (of humans) looking back at our generation as incredibly selfish and incompetent even to reach a decision.  “They knew what might hang in the balance, and yet they were so caught up in their own petty circumstances.”   It is like we are captains on the Titanic debating which way to turn after it being reasonable to believe that there is an iceberg somewhere ahead.   It could even be that we see the iceberg and still we debate.  Such pettifoggery is mere dribble in the divine comedy that may well already be in Act III.  

We are so small, even smaller than the cockroach, and yet we presume ourselves to be so big.  We we to have the distance of perspective such that our immediate pathos would not blind us, how would we view our society…ourselves?

Rick Perry, when he was the Republican governor of Texas running for re-election, said his primary opponent, Senator Kay Hutchison,  was spending tax dollars too freely in Washington.  That is to say, she is too Washington. He claimed that she didn't get what he called, “Texas values.”   Then, he added something really telling—something that went beyond his contest. “Washington’s one-size-fits-all approaches simply don’t work. They want more control of your dollars and your life, and they want it now. We surrender that to them with peril.”  His statement is worthy of our reflection even long after Perry's re-election.

Why doesn’t a one-size-fits-all approach not work in the United States?  Perry was essentially pointing to the empire-level nature of the U.S. general (or federal-level) government, which is to say that there are republics within the Union.  Hence the Texas governor used the word “surrender.”  Ordinarily, one-size-fits-all is the nature of a government’s legislation; a law is not meant to differentiate between individuals.  On the empire level, imperial legislation should take into account the different political entities that constitute or are members of the empire, even if the legislation applies directly to people.  In short, the governor was subtly pointing to how the US Government differs from that of Texas. President Obama's health-insurance law was vulnerable to being declared unconstitutional precisely because in urging that the U.S. Congress expand its authority to include a mandate to purchase health insurance, the President neglected the empire-level situs of the U.S. Goverment--a level that is not the first "go to." 

In other words, the Democrats forgot or minimized the enumerated powers aspect of the limited imperial-level government (the British imperial crown had similarly been limited in its imperial powers--essentially regulating interstate commerce and defending the empire). In Sandra Day O'Conner's words, "Congress has been acting like a state legislature."  Had the President urged Congress to make money available to states in which all of their citizens are covered, I suspect his objective would have been sufficiently satisfied in a way that would be consistent with what the U.S. is/are. I say sufficiently satisfied because in a Union of republics or countries, the innate diversity of states means that just as one size doesn't fit all, not all of the republics would decide to cover everyone. Hence, tolerance among the others is part and parcel of being in an empire-level political union. Where such tolerance is in short supply, one risks having one's prize Congressional legislation declared unconstitutional.

Source: http://www.msnbc.msn.com/id/34402323/ns/politics-washington_post/

When he was running for US President, Barak Obama said that the financial crisis provided an opportunity for financial system reform beyond that which is in the interest of the big banks because the power of the latter is temporarily eclipsed and the US Government can take advantage of that.  His assumption is that during normal times, the banking industry essentially owns the Congress (Sen Dick Durbin’s statement just after the banking lobby defeated a foreclosure bill in the US Senate in 2009).  Sadly, the government did not use the eclipse; rather, it has been using the appearance of power and direction in the relumed post-crisis period to engage in window-dressing to assuage populist anger at the banks.

 Asserting that it “is among the strongest banks in the industry,” Citigroup announced in December, 2009 that it would soon repay $20 billion of federal bailout money. This from a bank that was in the red for most of the preceding two years, that was expected to limp through 2010 amid a torrent of loan losses, that saw its stock price close after the announcement at a measly $3.70 a share — and that, like other big banks, was still reluctant to lend. Citigroup’s planned exit from the bailout — like Bank of America’s earlier this month — would be welcome if the banks were the picture of health. But their main motive was to get out from under the bailout’s pay caps and other restraints. Perhaps the bankers were motivated to attract talent;  perhaps they were acting in their personal financial interests.  The Treasury Department’s approval was a grim reminder of the political power of the banks, even as the economy they did so much to damage continued at the time to struggle and the banks have benefited from taxpayer money.

Big bank profits, for instance, still came mostly courtesy of taxpayers. Their trading earnings were financed by more than a trillion dollars’ worth of cheap loans from the Federal Reserve, for which some of their most noxious assets were collateral. They benefitted from immense federal loan guarantees, but they were not lending much. Lending to business, notably, was very tight.  Barak Obama’s “urging” the banks to lend more to small business was not apt to be taken seriously by the big banks, given their financial power.   To exort banks to be good “corporate citizens” is only to twist “citzen” beyond its pale.

Let’s be clear. Organizations are not citizens.  For one thing, they can’t vote.  Exxon can’t mail in its ballot for president.  Nor can it be drafted to fight (rather, it can receive military contracts; its lobby knows how to procure those).  Moreover, they are designed (real citizens are not “designed”) to retain income without limit.  Extrinsic normative claims on the organizational machines do not register in the corporate calculus unless there is a financial cost.

Being called to the “woodshed” at a White House meeting is mere political theatre—something the bankers who bothered to attend in person must have known was something merely to sit through.  Some of the biggest recipients of taxpayers’ money, including Citigroup and Goldman Sachs, didn’t even bother making the extra effort to get there ahead of time to avoid the predictable winter weather that grounded their flights.  The acela train from NYC was running on time, yet the CEOs cited flight delays as making it impossible for them to attend in person.  Perhaps the CEOs correctly determined that Barak Obama’s meeting was mere political theatre.  The banking lobby was surely not being distracted from the financial reform legislation making its way through Congress.  That lobby has gained significant loopholes in the House’s passed bill (see my post on the House bill).  Aside from the loopholes (such as derivatives still not subject to regulation!), the apparently “strong” provisions of that bill are vulnerable to being gamed. The Senate, which is unlikely to pass its version of the deal until next year, should explore more direct measures, like banning banks beyond a certain size, measured by their liabilities. If we have learned anything over the last couple of years, it is that banks that are too big to fail pose too much of a risk to the economy. Any serious effort to reform the financial system must ensure that no such banks exist.  But can you imagine our elected officials having the guts to split up Goldman Sachs?  Can you imagine what that bank would do to avoid such a fate?  … and yet such private power is not a threat to a republic?   As voters, we are asleep at the wheel, too easily taken in by the theatrics of impotent politicians.

In general terms, it is ironic that the banks too big to fail may be even more of a risk after the financial crisis.  What profits the banks have been making have come mostly from trading. Many big banks were happy to depend on the lifeline from the Fed and hang onto their toxic assets hoping for a rebound in prices.  Crucially in terms of the systemic risk in “too big to fail,” the whole system has grown more concentrated since the crisis. Bank of America was considered too big to fail before the meltdown. Since then, it has acquired Merrill Lynch. Wells Fargo took over Wachovia. And JPMorgan Chase gobbled up Bear Stearns.  If the goal is to reduce the number of huge banks that taxpayers must rescue at any cost, the US Goverment has been moving in the wrong direction. The growth of the biggest banks ensures that the next bailout will have to be even bigger. These banks will be more likely to take on excessive risk because they have the implicit assurance of rescue.  In short, there is even more systemic risk after the financial crisis of 2008.  Creating a new consumer protection agency is a feckless attempt by the US Government to show some muscle to face entrenched (and even more powerful) financial interests on Wall St.  Even giving the government the power to deal with banks deemed too risky to the financial market itself does not guarantee that the power will be used.  Consider, for example, the lack of enforcement of anti-trust law.  For a comparison, look at the EU—not only in terms of going after big companies like Microsoft, but big banker bonuses.   In the US, we much face the fact that the big banks are on top.  If what is good for Goldman Sachs or Citigroup is not necessarily good for us, the American people, then there is a tremendous systemic risk for us in being appeased by Barak Obama’s public “scolding” of Wall Street and by the Swiss-cheeze financial reform bill making its way through Congress.  Neither branch is taking seriously the question of the existence itself of the banks too big to fail.  Moreover, the question of whether large concentrations of private power have become a threat to our republic—on account not only of the ability of a big bank to shaft its customers, but also of the relative power of the banks and their lobby over our government—has effectively been sidelined.   It as as though popular sovereignty here means charting a ship’s course without looking beyond the bow.   Some of the wealthy passenagers have told us: don’t look out there!  Don’t ask the real questions!  And we, being reduced to unconscious herd animals, happily comply and stiffle our anguish because we feel the big banks have already won.

Adapted from: http://www.nytimes.com/2009/12/15/opinion/15tue1.html

Just as the US Senate was to take up the matter of Ben Bernanke’s re-appointment as Chair of the Federal Reserve in 2010, Time magazine came out with its announcement that he is to be its person of the year.  According to the magazine, “when turbulence in U.S. housing markets metastasized into the worst global financial crisis in more than 75 years, he conjured up trillions of new dollars and blasted them into the economy; engineered massive public rescues of failing private companies; ratcheted down interest rates to zero; lent to mutual funds, hedge funds, foreign banks, investment banks, manufacturers, insurers and other borrowers who had never dreamed of receiving Fed cash; jump-started stalled credit markets in everything from car loans to corporate paper; revolutionized housing finance with a breathtaking shopping spree for mortgage bonds; blew up the Fed’s balance sheet to three times its previous size; and generally transformed the staid arena of central banking into a stage for desperate improvisation. He didn’t just reshape U.S. monetary policy; he led an effort to save the world economy.”  Not to be outdone in service to the Chairman, CNN furnished its own reporters, who gave credit to Bernanke for these measures.  Interestingly, however, even though one reporter admitted that Bernanke had said in 2007 that the subprime market and its derivatives would not threaten the financial market and the banks, she attributed the fault there to the imperfections in the market rather than to Bernanke himself in being wrong.   So, he gets credit for cleaning up the mess (ignoring the foreclosed homeowners) but not the blame for being wrong about the contagion (and not urging regulation of the derivatives).  He could have urged the regulation of derivatives (he is a smart person), and once the crisis occurred, he could have tailored his response to the homeowners facing foreclosures that could have been stopped. For example, the Fed could have created dollars to subsidize the inordinate rates on the variable rate subprime mortgages (i.e. those bank assets would not have been toxic and the banks’ balance sheets would have been fine…two birds with one stone…rather than doing the bidding of one of the parties).  To be sure, if the Fed is inordinately friendly to banks because of the power they have in selecting their regulators (the NY Fed Chair’s appointing committee consists of bankers), then Bernanke might have simply been playing the good politics for staying in office.   “Our ships must all sail in the same direction; otherwise who can tell how long you will…last…with us.” (The Godfather, part III)  Bernanke is a player from the perspective of the real power behind the throne: America’s financial elite.  That elite literally owns the media companies. So what I want to point out here is that the timing of Time’s announcement and the asymetry in CNN’s laudatory coverage of the Chairman just as the Senate was about to consider his re-appointment led me almost instinctually to  be convinced that coincidence was not the driver here.  The Chairman undoubtedly had some powerful friends in the media who were giving him a publicity offensive, or campaign, just in time for the Senate debate on whether to appoint him.

Through all the admiration of this person of 2009, it should be remembered that he did not urge the regulation of sub-prime derivatives issued or held by the banks regulated by the Fed.  He was wrong about the subprime housing bubble being contained.  And he failed to protect homeowners sufficiently.  If the media was being used by the Fed Chair in his re-appointment campaign, it could be that what we are fed by CNN, Fox, MSNBC and the main network newscasts is not really as neutral or beyond their control as we think.   News as a campaign.  News because it is in some powerful actor’s vested interests.  While there is certainly coincidence in life, an alignment such as I have outlined here is far too transparent—or at least it ought to be.

The subtext here is that we, the American people, have become too much the pawns even as we think we are not.  The illusion of popular sovereignty is that we are in control.   I don’t think we have any idea of the extent to which we are manipulated by the powers that transcend our elected representatives and their appointees.  It is no wonder that real change does not get beyond the interests of the real power in America, whose interest is in the status quo or at best in an incremental change.   Essentially, we have allowed the anti-democratic power to concentrate to a degree that is dangerous to a functioning republic (i.e., a representative democracy).  We should not be surprised to find that powerful actors are operating at a subterranean level where transparency is intentionally lacking.    How do we get it back, you ask?  Hah!   We would have to see it first—realize its extent and depth—and I’m not holding my breath that enough people will wake up to see the light.

Too many of us are ensconced in Plato’s cave, taking what the puppets say for reality.  As Jack Nicholson said in A Few Good Men, “You want answers? YOU CAN’T HANDLE THE TRUTH!”    Even if we could stomach the emetic manipulation behind the scenes that is directed to us (and even our representatives—when they aren’t doing it themselves), we would have to be able to see it—and it is so well hidden.  We can only grasp at straws…confluences that seem like more than coincidences.  As a member of the black caucus of the US House (surprisingly) said to a reporter of Frontline on the TARP program passing the House just days after it had been voted down by that same body, “You have no idea how powerful the anti-democratic forces are here.”    You and I get only glimpses.  The puppets seem more real so we believe in them.   Please don’t take my thesis to be that there is one huge orchastrated conspiracy; rather, I’m simply suggesting that our system of representative democracy does not seem to be able to sufficiently constrain the invisible powers that are pulling strings without being accountable to the public power.  It is my ardent hope that the people will look beyond the status quo in voting for candidates—perhaps getting back to citizen representatives who do their duty then return to their preferred occupations—that we would elect people sufficiently principled and not desirous of a life in power to be willing to take on the financial power.   Do I think it will happen?  Sadly, no.  I’m sorry, but I just don’t think we have it in us…or we don’t have enough of what it would take to confront that which is in us that favors comfort and sleep.   In the story of the rise and fall of empires, the United States is not exempt.  The culprit, as with most things, lies within.   It is ultimately about what kind of people too many of us are.  Such a thing is very, very difficult to change, let alone see.  Decadence tends to be invisible to itself.

Note: A day after CNN covered the announcement, the Senate finance committee debated and voted on Bernanke’s re-appointment. See http://www.msnbc.msn.com/id/34463144/ns/business-stocks_and_economy/

 Source: http://www.time.com/time/specials/packages/article/0,28804,1946375_1947251,00.html#ixzz0Zs8WgpV1

The Senior US Senator from Illinois, Dick Durbin, said the following just before one of the votes on the health-care insurance reform legislation in December, 2009:

“Thirty million Americans who currently don’t have health insurance  have the peace of mind of knowing that they have health insurance,” Mr. Durbin said. He added, “This is a real debate over whether or not health care is going to be a right or a privilege in America.”

My first reaction after reading this quote was one of perspective—specifically, on how far from this central question of “right vs. privilege” the debate on the health-care legislation had gotten in the obsession over a “public option.”  Health-care can be a right, whether implemented through private, non-profit or public sector organizations (the government funding the poor regardless).   The fundamental question in mandatory health-insurance coverage is whether something that is needed to survive (medical treatment for the sick) is a political right in a society.  If so, then the government has a responsibility to make sure that every citizen has insurance regardless of income.   I suspect that there are many citizens in the US who would say that health-care should not be a right because that right involves economic redistribution.   I believe one poll showed that 87% of Americans who were satisfied with their health insurance said they do not agree to pay for others who would not otherwise be able to afford insurance could have it.  The costly emergency room visits of the uninsured may mean that the insured pay more to have uninsured in society; even so, my point is that we can not assume that rights bearing on sustenance and involving economic redistribution are recognized as rights (rather than as “tax and spend”).   Essentially—and perhaps surprisingly—some people would say that others do not have the political right to life (though some of the same people would say that unborn fetuses have it!).   Unfortunately, given how the debate on health-care insurance has gone, it is difficult to know whether there is a sizable portion of the American society that does not want to recognize that every citizen has a right to basic necessities.   Is political discourse such that it inherently leads to a spirallying out on a tertiary aspect of an issue, rather than on the eye?  If so, how are we to discuss just what are the limits on rights in our society?  Are the rights recognized in law to be byproducts of discussions on implementation (i.e., by business, non-profits or government organizations)?   Furthermore, is a focus on implementation a case of putting the cart before the horse…and letting the horse wander off? 

Thinking of the health-care insurance debate this way—as focused on implementation as if that which is to be implemented follows from it—I submit that there are limits to public discourse.  Hence, Congressional representatives who are led by polls and newspapers may well be a case of the tail wagging the dog.  At the very least, such legislators would not be debating the central questions.   It is dangerous, if not utterly unwise, to legislate this way.   Yet as our system of government becomes more and more democratic (i.e., tailored to the public discourse and polls), we risk running ourselves into a ditch—not looking at where we are going.   Rarely, if ever, did I hear or read references to health-care as a right in the debate.  I heard a lot on process and implimentation, but little on whether a new right that involves redistribution ought to be recognized.  Moreover, we missed an opportunity to debate whether rights that require redistribution are actually rights as distinct from economic egalitarianism.    Not even our elected representatives, who are supposed to act as abuffer to direct democracy (i.e., pulse of the people at the moment), were able to focus on these questions.   Clearly, chasing tails is not the way of leadership.  

Source: http://www.nytimes.com/2009/12/23/health/policy/23health.html?_r=1&ref=us

Popular election presumes meaningful discourse on current issues and political philosophy so the voters can distinguish the candidates.  Too often, however, the media takes its eyes off the ball and orients its coverage to the process rather than the content.  For example, on the eve of the 2010 US Senate election in Massachusetts, the New York Time reported, “Volunteers and campaign workers staffed phone banks for each of the candidates in the Senate race here, as they concentrated on energizing voters to get to the polls on Tuesday.”  Besides being rather obvious, this topic carries with it an opportunity cost—namely, the article that could have been written on the candidates’ political philosophies that go beyond an obsession on the health-care before Congress at the time.   Although it is short-sighted to use a Senate election as a referendum on a current issue, even that would be better than a focus on the campaigns’ mechanics.
Too often in presidential campaigns, media reports are on the process rather than the issues (forget political philosophies).  Because such campaigns are mostly retail rather than grass-roots (after the first few primaries), most voters rely on the media for information on the candidates.   There is a saying that might be pertinent: garbage in, garbage out.  We could do better.

Source: http://thecaucus.blogs.nytimes.com/2010/01/18/get-out-the-vote-pitches-in-massachusetts/

In the US Senate race in Massachusetts between Scott Brown and Martha Coakley, there was some resistance to the proposed federal health care legislation. This pushback was in line with reinvigorating a federal system for the United States.

Several independent voters said they wanted to elect Mr. Brown to block the health care bill being considered by Congress.  They denounced the US House and Senate bills as full of deals for special interests — though several said they thought Massachusetts’ law extending near-universal coverage, one of the models for the national bill, had been largely a success. “It’s not perfect, but why should we have to pay again when we have health care?” said Ms. Grenham, who works as a physical therapist.

That it is easier for a state government than the federal government to legislate on something like healthcare is no accident; the founders designed the US Government to be cumbersome precisely so most of the domestic legislating would be done by the state republics, which are closer to the people.  Hence Massachusetts has close to universal coverage while the majority of Texans might want to pass.  One size does not fit all in a heterogeneous empire-level Union.  For the US Government to go beyond its enumerated powers to duplicate what is already in Massachusetts would be to demonstrate the folly of consolidation and the related fallacy that every political unit in a federal system must have the same policy.  Although I firmly believe in universal coverage as a right rather than a privilege, I respect the right of the people of, say, Texas, to disagree and have a republic without it.   Such tolerance is necessary to a viable federal system.  Too many people imposing their agendas far from home must surely end in consolidation, which entails duplication where state governments are not already impotent.

Source: http://www.nytimes.com/2010/01/18/us/politics/18massachusetts.html?ref=politics

WASHINGTON - Republican leaders expressed renewed skepticism Tuesday about President Barack Obama’s call for a bipartisan forum on health care, raising questions about how much can be achieved at the televised event later this month. “This is a clever tactic by the president to try to put the Republicans on the defensive,” said John Feehery, a GOP consultant and former congressional aide. With the two sides at such odds, some Republican activists privately worry that their party’s leaders might be walking into a trap on Feb. 25 designed to portray their health care proposals as thin. The House’s top two Republican leaders openly questioned Obama’s sincerity and hinted they might skip the meeting if he uses the Democratic bills as the starting point for discussions.

Analysis: 

The problem may well be that President Obama is trying to have his cake and eat it too—meaning that he is trying to draw on the credibility of a head of state (i.e., a neutral party who is presiding) while at the same time being the captain of one of the partisan teams.  This is a structural conflict of interest that is centered in having the head of state also be the head of one of the contending political parties.  Even in how he characterizes what is not bipartisanship, his bias is palpable. “Being bipartisan cannot mean that Democrats give up everything they believe in, find the handful of things that Republicans have been advocating for, and we do those things, and then we have bipartisanship.”  To make such a statement literally from the presidential podium undercuts the presiding nature of the office.  To consistently side with one side in a house over which one is presiding undercuts one’s credibility to preside.  In presiding, one is looking out for the good of the whole, and coming down on one side or the other can legitimately only be done when the whole is in jeopardy.  Hence, Andrew Jackson came down against Congressional encroachment on the states in vetoing a Congressional appropriation for a road completely within Missouri’s borders; he feared the precedent would ruin the system of federalism (which must be balanced to be viable). Shortly thereafter, he sent the US Army down to South Carolina after it passed the Nullification Acts by which the South Carolina government claimed it could nullify any federal law that was not in the state’s interest.  Jackson’s involvement in taking sides was both for the states and the federal government because his only criterion was the long term viability of the Union.  To take sides on lesser matters tends to reduce one to an ideology, hence to one of the partisan groups.  This undercuts the credibility of the presiding officer for people in the other parties.  To “spend” that credibility for expedient purposes (an ideological agenda)—trying to get the most out of the power of the office—is to lose the kind of power that the office of the US Presidency was designed to have.  No wonder most occupants of the office have failed.  Barak Obama on health care is only the latest. Had Barak pushed the need for health-care reform without taking sides as the legislators debate possible plans, he would be treated as much more credible in hosting a meeting.  In other words, the seriousness of the conflict of interest can be gaged by the trepidation of the Republican leaders.  A partisan evoking the credibility of a figure head is inherently duplicitous and bound to lead to failure.

Source: http://www.msnbc.msn.com/id/35313584/ns/politics-health_care_reform/

Secondary Source: http://www.nytimes.com/2010/02/10/us/politics/10obama.html?hpw

He who has the gold makes the rules.  I suspect this is the operating mantra at Goldman Sachs even after the bank’s near-death experience (when Solomon Bros stock was taking a hit, Blankfein knew his bank could be next).  As it turns out, the bank was involved in enabling Greece to stealthily spend beyond its means. According to The New York Times, in 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means. Additionally, in late November, 2009— three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting. The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

Lest it be forgotten, half of Goldman Sach’s 2009 revenues came from trades on its own books—even as the bank had become a bank holding company and thus supposedly more not less risk averse.  In general terms, my concern is that the bankers at Goldman might be overly in love with leverage and thus be blind to the risks.  Were this contagion limited to Goldman Sachs, it would be a question of whether the bank is too big to fail; that the bank has actively enabled one of the EU’s states to secretly take on more debt suggests that the systemic risk that is involved is political as well as economic.

According to The New York Times, “bankers enabled Greece and other governments to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt — the Wall Street term for loans to governments — is as unfettered as it is vast.”  This is a condition that American and European citizens have allowed to happen; the market for sovereign debt (and the enabling banks) could be better regulated. Indeed, the government of Iceland floundered economically and politically due to its holdings in valueless subprime mortgage derivative securities; its perilous fiscal condition prompted it to apply to the EU to become a state. Enlargement itself was flagged in the EU as entailing risks for the union. So Wall Street banks whose managers believe in debt and minimizing or avoiding market regulation present the world with not just economic systemic risk, but added political risk as well. That is to say, Wall Street can reach across the Atlantic, with European governments hanging in the balance. To push for banking deregulation in the U.S. can entail political risks abroad. In other words, banking regulation can be viewed as a social responsibility and a matter of good foreign policy.

Even though they had contributed to political instability in Europe, Goldman Sachs managers received near record bonuses in 2010. The payouts were more than a sufficient incentive for the economic alcoholism to carry on in abject denial.  "We're not at fault! We're just market makers." The problem here is that the alcoholic has the gold, and thus can make (or at the very least dance around) the rules.  As Richard Durbin of the U.S. Senate said in 2010 after he tried to allow bankruptcy judges to be able to modify home mortgages, the banking lobby owns Congress. The amazing point here is: the lobby could still call the shots in Congress even in the wake of the industry's sordid role in the financial crisis of 2008. This ought to be a red flag for anyone who values the republic as a form of government in the U.S.

Ultimately, it is the American people who are to blame—that's right, you and me—because too many of us are sufficiently credulous to elect and re-elect representatives who cave in to the banking lobby’s pressure.  There are too many “professional” pols seeking to perpetuate themselves; there is hardly a citizen statesman left serving as a matter of duty rather than power and vocation.  We have stood by and let the banks too big to fail get even bigger (and thus more powerful over our governments). We have not put sufficient pressure on our representatives in Congress to remove the too big to fail problem.  It is all too easy to point our fingers at the managers of Goldman Sachs, especially on the bank’s role in the Greek debt problem, but it is ultimately ourselves who are responsible for enabling the elephant in our living room.  Now that that elephant is breaking furnature in other houses, perhaps we might find the time to get our own house in order.  As the Germans would say, alles ist nicht in Ordlung.  We continue to think and act otherwise. Crucially, this is to our own peril.  In other words, denial is not a viable survival mechanism, even if it is more comfortable.

Source: http://www.nytimes.com/2010/02/14/business/global/14debt.html?hp

I was surprised to hear Brit Hume and Newt Ginrich (former Speaker of the US House) (re)define socialism as “government control of private property.”  My understanding of socialism is that the state owns as well as controls the means of production.  By “owns,” I do not mean holding the majority of shares, for there are no stockholders in socialism.  Government control of a give economic transaction is called government regulation; this is not to say that the government owns the economic institutions.  Remember socialism is a type of economic, not political, system.  Anyway, Ginrich then said that Obama would instill socialism in the US if he could…and that it would be like Western Europe (which by implication is socialist already)…but there are plenty of privately-held companies sourced in the EU.  To say that the EU or any of its states own the businesses would be a gross error.  But all too often, if someone on television says (or implies) that this is so, it is taken as such by the general public. What concerns me here is that our public political discourse over the airwaves lets such redefinition go unfettered. The graver implications from the real definition can still scare people even as some new definition is cited.  That is to say, people who know what socialism really is might fear that the US Government may take ownership of their small businesses, when what is being feared is that government regulations will increase.  That is a far different thing than government ownership of the means of production.  When such distances are trespassed in the name of political expediency, we all lose.

Even more disconcerting are the admittedly few baleful warnings that if we are not careful, the communists will take over.  Firstly, socialism is not communism; there can be government ownership of the means of production and a market mechanism, and socialism does not require dictatorship.  Secondly, the fear of the spread of communism ended in the late twentieth century when the USSR folded.  To use the old communist-fear-mongering line in the twenty-first century strikes me as antiquated, if not downright stupid.  To those who would still like to wave the anti-communist banner, I can only say that most people have moved on to the twenty-first century.  Perhaps it will take a bit more time for the last century to die out, but we are in a different century now.

Watching the O’Reilly Factor on the evening of Obama’s health-care “summit,” I was struck by an exchange by Bill O’Reilly and Laura Ingrahams.   Bill stated that Barak Obama had done an adequate job in moderating the discussion.  Laura replied, “He is not a moderator; he is the President of the United States. He has a majority in both houses (of Congress).”  Later in the program, Bill admitted that “moderating is not enough in the long-run because the country wants leadership.”

I believe that Laura’s statement evinces the main problem concerning modern presidents, who want the credibility needed to effectively moderate meetings involving partisans while at the same time the presidents remaining partisans themselves.  To be simplistic, this is a case of wanting both to have the cake and eat it too.  You can’t have both, and in fact the desire (and attempts) to do so are suggestive of a sort of character that might not be sufficiently respect-worthy to preside.  If the US President stands for the US as a whole, the office is oriented to staying above the frey unless the very viability of the Union is at issue.  This is not to be partisan.  In fact, it allows the President to preside over contending parties.  Perhaps Barak Obama would have been able to forge a compromise at his health-care summit had he been neutral concerning Democratic and Republican proposals.  That is to say, he might have been able to have enough sway with Republicans to police the meeting (i.e., of grandstanding speeches) and get both sides to give on particular things.  As it was, any such suggestions were dismissed as motivated by an ulterior motive rooted in the Democratic position.

In terms of Bill’s comment regarding leadership, the sort of leadership that the Union needs (even if we don’t realize it and want less) is that which places the good of the Union first regarding means as well as ends.  For instance, we need the sort of leadership that says “this problem needs to be solved this year.”  We already have partisan leadership from the Congressional (party) leadership.  The Majority and Minority Leaders in the US House and Senate are situated to give us the partisan leadership.  To load both types of leadership on the US President is to get the partisan sort rather than the presiding sort…hence we lose the latter when we could have both.

Take the State of the Union address.  It is supposed to be on the state of the US as a Union.  Yet it has degenerated into a partisan speech.  Justice Antonin Scalia once said he no longer goes to the annual speech because the justices “sit there like bumps on a log” in an otherwise highly partisan atmosphere.  After the 2010 speech, which contained partisan language critical of the court’s decision on corporate political contributions, Justice Roberts said that the justices might not attend the address in the future.

As a model to get back to, we might look back to George Washington, whose prior achievements and sageity of age gave him the stature with which to preside.  Hamilton and Jefferson and their allies in the Congressional leadership were able to take up the mantel of partisan leadership, with the President oriented to presiding over the new system of government and the Union itself.

So, yes, we do want leaderships—meaning partisan and systemic.  The former sort contaminates the latter.  It is for the latter that I believe the US Presidency was invented.  The Electoral College, for instance, was geared to buffering the popular demand for partisan leadership from infecting the presiding-officer role of the Presidency because the electors were to be once-removed from the passions of the people.  In subjecting the office to direct popular election, we have unwittingly lost the check safeguarding the presiding role.  Hence it is no accident that we have had some modern presidents who have been relatively unaccomplished (and younger) prior to their assuming the office.  Barak Obama does not have the prior accomplishments (and age-experience, or wisdom) by which he could be respected as a presider with sufficient credibility to get both parties to compromise in a meeting.  To be sure, he has the energy of relative youth to be zealously partisan, but this condition cuts him off from being able to effectively preside, or moderate, which in turn is particularly valuable when contending parties prefer to do battle than solve a problem that is in the Union’s interest to be solved.

I do wonder: who are the accomplished men and women of such stature that they could effectively preside?  Is a long election campaign the best way to find and test them?  Test them for what?  Does effectivelyness in vote-getting have anything to do with effectiveness in presiding?  This is not to say that accomplished stature would not attract votes.  Perhaps zealousness in vote-getting is a tacit admission that there is a dearth of stature that would naturally attract votes.  How much campaigning did George Washington have to do?  Very little, I would bet.  By virtue of his accomplished stature and self-discipline when it came to partisanship, he was able to effectively preside over the Constitutional Convention of 1786.  Lest this be viewed as a minor function relative to him pushing to get his way in every debate, consider that could be counted a minor miracle that the convention did not blow up or end in a stalemate.  There being a presider with stature, the convention could withstand the infighting.  In fact, Washington was such an effective presider that he could luxuriate on the final day with a request of his own…that the electorate of a US House seat be 20,000 rather than 30,ooo so the body would be that much more democratic (i.e., the representative being that much closer to the people…that much more knowable on an in-person basis).  The problem is that weighing in on virtually every debate has become the modus operendi of every US President, so their influence on each debate (and especially in presiding) has wanned.  Perhaps the occupants represent our culture of gimme, gimme, gimme, NOW! 

Perhaps we are not looking in the right places for accomplished stature that has the internal fortitude to resist such temptation.  Perhaps our means of selecting a President is oriented to the wrong type of person for the job.  In other words, if the job was designed one way and we expect it to operate contrariwise, this could explain why we witness so many presidents fail.  So I was not very surprised in watching two hours of the health-care “summit” that it was basically political theatre.  I was not surprised that Barak Obama had trouble in moderating the discussion towards achieving an agreement.  I was not surprised that the Republicans instinctively distrusted his moderator role.  In such a climate, Barak’s presiding was doomed to failure.  It really is not his fault, I don’t think, because we have virutally remade his office into something that is ill-suited to how it was designed.  Imagine trying to use your car to drive across a river.  Unless you are James Bond 007, your car probably wasn’t designed to travel through water.  To ignore its design and make it do it anyway shows a real lack of smarts and character.  I suspect that this is how the rest of the world sees us, yet we don’t see it in ourselves.  Ultimately, this is the problem.

Source: http://www.msnbc.msn.com/id/35790685/ns/politics/

On February 28, 2010 on CNN’s State of the Union, Nancy Pelosi, Speaker of the US House of Representatives, said that the health insurance companies didn’t want a government-financed and operated insurance option for American citizens so it was off the table.  Her statement reminds me of the earlier one by Richard Durbin of the US Senate, who remarked after his forclosure-assistance amendment failed that the banking lobby owns Congress.   Would there have been the hyperbole of “socialism!” associated with the public option for health insurance were that proposal in the interest of the industry at issue (i.e., at fault)?  If so, it is interesting in a sad sort of way that a culpable person would have the gall to use exaggeration (there would still be private insurance so the sector would not be socialist…meaning owned and controlled by the state).  We have seen the same thing from the banking lobby in fighting reform efforts in the wake of the financial crisis of September, 2008.   In other words, we can isolate a pattern here: even when companies (or an industry) are at fault, they can still own Congress when their interests are at stake.

It is particularly disconcerting to me that so many citizens fall for the self-interested exaggerations when it would be more natural for people to be angry at the culpable people for continuing their unethical business practices (and going on to stop reform that is at least in part due to their bad practices).  Take for example, Representative Dennis Cardoza, Democrat of California in the US House. The husband of a family practice doctor, he is intimately familiar with the failings of the American health care system. His wife “comes home every night,” he said, “angry and frustrated at insurance companies denying people coverage they have paid for.” Even so, he is on the fence on the Democratic health-care reform proposal because he wants stronger anti-abortion language and more cost control.  Were he really angry like his wife, he would be pushing not only for the bill, but for the public option or for real restrictions on the insurance companies, rather than allowing secondary issues to block him.  In other words, I don’t believe he is really that angry at the companies refusing to fuffill their responsibilities to their customers who have paid the premiums.  Also, he is allowing himself to succumb to the self-interested manipulation of the same firms that he is ostensively angry at.  It is in the health insurance companies interest that costs be reduced because then their expenses are reduced (and their profits, which were very high in 2009…even as they were denying treatment to some).  If he were really angry like his wife, he would not be so willing to do something that would benefit them so much; rather, he would be working to take power and money away from them.

Unfortunately, the problem kids are able to thwart our efforts to clean up after them.  America’s Health Insurance Plans, a lobby for insurers, announced in March, 2010 (as Congress was considering health-insurance reform) that it was buying more than a million dollars’ worth of television advertising time to explain why insurance premiums had been rising. The week before, the White House had indicated that the industry’s rationale for the raised premiums was unconvincing.  Too many of us are letting industries get away with their mis-representations geared to thwart reform.   The health insurance industry’s ads convince us that the companies really aren’t sharks; we ignore Sen. Rockefeller’s likening of the companies to sharks—you don’t know there is a shark until you see its fin and feel its sharp teeth.  In other words, our anger is too easily (and conveniently…for the sharks, which want to continue feeding) dissipated.  We let the bad kids off the hook and go on as if the problem were somehow no longer out there.  This puts the misbehaving kids in a position to thwart any parenting.   In short, too many of us are unwittingly being manipulated by the bullies (who are therefore getting away with murder).   I suppose I shouldn’t be surprised that spoiled  kids would not feel culpable for their own bad behavior, but I am.  I am perhaps even more disappointed in the parents (i.e., the American people) who let themselves be manipulated by such kids.  It is like watching the parent of an alcoholic teenager be in denial and thereby enable the kid to continue drinking even though the kid beats up other kids when he or she drinks.  “Oh, Tommy didn’t mean it; he is really a good kid.  I don’t think we need to look at a group home or jail. He will be good if he can relax with a beer.  Here Tommy…” 

Whether in dealing with the people at the health insurance companies who are in denial or the representatives and their supporters among the public who are also in denial and are enabling them, it is an exercise in futility and utter frustration to see this dynamic and want to shape it up because the sickness has strong defense mechanisms against real change.  So I ask: can a dysfunctional system be fixed?  Can it fix itself?  Probably not.  So are there enough people in the US outside of the dysfunction who could fix it above the screams of the sick who do not want the shot?   Imagine a physician acquiescing to a kid’s demand that the shot not be given.  In a physcian’s office, the sick kid does not get to decide—or to put it another way, there are enough adults in the room that the shot is given over the kid’s objections.  So where are the adults?

Sources: http://www.msnbc.msn.com/id/35628488/ns/politics-the_new_york_times/ ; http://www.nytimes.com/2010/03/10/health/policy/10health.html?ref=us

The real means by which a bill becomes a law are sometimes referred to “how sausage gets made” because they are not suited for public display.  The belief is that were the citizens to see what goes on in the process, they would demand that it be changed.  For example, Rep. David Dreier, R-California, argued in March, 2010 in the US House that while “the process of lawmaking should be ugly, I have never seen it as ugly as it seems to be coming before us this week. … I think that [James] Madison would be spinning in his grave at the fact that there is absolutely no accountability to what is taking place here.” He was referring to the Speaker’s attempt to bypass a direct vote on the US Senate’s health-care bill by voting on a rule that would deem that bill passed in the House.  More generally, the ugliness in passing legislation refers to the horse-trading, which can include special favors and even payoffs.  For example, the US Senate’s health-care reform bill of 2010 includes a “Louisiana Purchase” and a special deal for Nebraska—both were engineered to obtain the votes of the two states’ senators.  I submit that the ethics in “how sausage gets made” is complex and depends on the particular means being referred to.

For example, take horse-trading where a representative votes against the preference of a majority of his or her constituents because they will get something else out of it.  The represenative judges that the typical constituent would agree to vote against his or her preference on the given issue because of the payoff to the district.  “I’ll go ahead and vote for health-care reform with a significant government role because we’ll get a new bridge.”  If the representative’s judgment matches those that the majority of his or her constituents, the sausage-making is not in this case unethical because the representative is indeed representing.
If most of the representative’s constituents would say no to the deal, then the yes vote would only be ethical if the representative judges correctly that the deal would be in their best interest.  Being a representative can justifiably depart from polls to act in his or her constituents’ best interest because this too represents them.  Were there no value in this, we would have a direct rather than a representative democracy.  There is in the latter a check on the passions of the people; the strength of check depends on the length of the term because an election further off gives the representative more time for the “in your best interest” to become evident.
The ethical waters darken appreciably the more the deal benefits the representative rather than the constituents.  A friend or relative getting a judgeship, for example, does not justify a vote that is at odds with the preference (or best interest) of the majority of the constituents.  This is essentially a principal-agent problem, where the representative is the agent who is not acting in the interest of his or her principal.  It is unethical because the agent has agreed to the duty of acting in the principal’s interests.

So sausage-making is not necessarily as sordid for the individual representative as it might seem overall.  An ethical representative need not fear discussing it.  In fact, making it transparent as part of the political discourse (through the media) would permit him or her to inform the constituents why he or she is making the deal.  There might be feedback ensuing that leads the representative to revise his or her assessment.  Of course, the representative might fear that the deal would unravel were it made public. However, it is unethical to include stealth deals in a public legislation.  A deal that is not agreed to in the light of day should not be part of a given bill because the majority voting for a bill should know what they are voting on.  There is nothing shameful in a deal that is in the interest of one’s constituents, and such a deal might be in the interest of the other representatives who want the bill to pass.  “We will give your people the bridge that is in their interest in exchange for their support on our bill here.”   This is essentially a recognition of legitimate priorities.  However, it can also be argued that a bill should stand on its own merits.

 Strictly speaking, if a majority of the representatives do not support the health-reform, for example, the bill should not be passed.  Proponents of a bill overreach in looking for deals to put them over the top because the majority vote with the deals does not match the merits of the bill apart from the unrelated deals.  Bad public policy can be enacted because some districts care more about other things.  In this sense, it would be ethical for the proponents to admit that they don’t have a majority and that therefore the bill ought not to pass.  Overvening such a normative constraint is the selfishness of “I want it my way anyway.”  This too ought to be part of the public dialogue when a majority is to be achieved only by the horse-trading.  However, the horse-traders could argue that including the deals reflects the priorities in the society, and these ought to be reflected in a legislature.  Ethically speaking, a legislature should design its sausage-making in such a way that such priorities are reflected even as they do not enable legislation that only a minority want on its merits apart from the priorities.  How to distinguish priorities from overreaching is the difficult problem facing us both ethically and in terms of legislative process.  Ah, but there’s the rub; what reforms would institute this messy ethical distinction?  Applied ethics may not be sausage-making, but it is messy nonetheless.

For Rep. Dreier’s quote, pls see: http://www.cnn.com/2010/POLITICS/03/16/house.health.care/index.html?hpt=T1