Saturday, October 20, 2012

Fixing U.S. Democracy to Give Economy a Chance

Face it. Our democracy is broken. As bad, what we have for governance in its place is destroying the economy. Congress is really not worth a fig. It does a poor job too much of the time and is simply too bought off by special interests not to be hurtful to the economy. In fact, what Congress does seriously damages the economy.

Watch what will happen to our efforts to seriously regulate the banking industry. Even if we do manage to get a few good regulations past Congress, those doing the regulating will soon become the captives of those regulated. There is simply too much bribery money and promises of later rewards floating around. As things stand, the situation is essentially hopeless. Whether he wanted the result or not, Obama is too close to, if not in bed with the banking industry. TARP I and II made sure of that. So too did keeping Paulson on as Secretary of the Treasury. He did more good for Goldman Sachs (GS) in that position than he ever did as CEO of the Company. Witness the AIG bailout for Goldman. The banks looted the Treasury and did it while engaging Obama on his watch.

Obama being too close to the bankers is the principle reason we do not have a good infrastructure repair program in place to help the economy and the unemployed. The bankers don't want that. Instead, they want the deficit reduced right now, even if it means looting Social Security to do it. What they don't realize is that their plans and policies will throw us right back into recession. So far, what is good for the bankers, as they perceive it, is truly bad for the economy. The bankers and their lobby are damaging and have seriously damaged our economy, and still we put up with the rats. Are we daft or what?

Worse, this entire situation will deteriorate further with the new SCOTUS decision to remove limitations on some corporate campaign contributions. That decision and others similar to it are based on the incorrect idea that campaign contributions are identical to free speech and are therefore protected under the First Amendment. This is wrong. Free speech seeks to influence by the persuasiveness and merits of the ideas it urges. Campaign contributions seek to influence by purchasing cooperation from government officials. The two are quite different. In fact, campaign contributions undermine free speech by purchasing air time for bad ideas, as though those ideas have been found worthy by many others – itself a fraud -- and by blocking the good ideas of free speech out or shouting them down.

More private interest money will flood the hallways of Congress after this latest decision by SCOTUS. It is crazy and we are nuts for putting up with what is going on. Our economy has been sabotaged by highly paid and wealthy special interests who operate against the middle class and are destroying our economy by destroying that middle class and the small businesses they run that mostly make up our economy.

I do think our democracy is badly broken and has had it. The question is, is it even theoretically fixable and with it our economy? I think it is. However, the public is a long way from (1) understanding the problem, and (2) understanding what to do about it to fix it.

As I see it, only five things together can resurrect our democracy to its former glory and enable our economy to ultimately do better and grow in the long run as it used to:

(1) strong campaign finance reform with draconian teeth,

(2) have everyone abandon the absurd notion that campaign contributions are protected under free speech and seriously limit them,

(3) aggressively regulate and control lobbyists and their access to Congress (Yes, regulate the Right of Petition just as other constitutional rights are regulated in the public interest),

(4) redistribute income back to the middle classes against the special interests that have used government to take that income away from the middle class, and

(5) pass a law, or better yet, a constitutional amendment requiring that any legislation passed by Congress or any regulation promulgated by government must not be directly or indirectly adverse to the national public interest.

This program would fix things both our democracy and our economy, in time. (1) through (3) are designed to directly stop the special interest bribery of Congress and governmental officials that is so undermining us and the economy. (4) is designed to give CPR to the middle class that has been knocked out and is in shock, along with the small businesses they run. (5) is to stymie legislation and regulations that serve special interests at the expense of the public or other significant groups and to kill incidental legislative pork.

However, don't hold your breath here on any of these. Seems we are going to stay broken and have our economy in recession, at least for a good while, until the public figures it out the problem and then learns to demand the right reforms, starting with kicking those in power out and electing those who will adopt these measures.

Until then, sit back, pop the tab on a beer or pour a glass of good Merlot and watch some argue the earth and universe were created 4,000 to 6,000 years ago and others do our public social order and economy serious injury just to get some more money.

With so much greed, cynicism and stupidity at work in and around the process of our government, our situation is truly breath taking in its ignorance and blatancy.

It dazzles and dismays me. We must fix it.

Disclosure: none relevant; no bank stock, in particular

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