Talk about lipstick on a pig: the bailout measure, which began as a modest, $700-billion, three-page oink, reached the U.S. House of Representatives yesterday wearing about 450 pages of lipstick. Its maximum final cost was no longer calculable—after bipartisan negotiations to add “sweeteners” to the thing, to buy it support from various congressional factions.
Americans, and anyone else who happened to be watching (most of the world), got a good taste of what “Congressional oversight” means; to say nothing of the explanation of why, in opinion polls, the U.S. Congress enjoys even less popular esteem than President Bush.
It is not for a Canadian to lecture Americans on U.S. constitutional niceties, but I’m going to do it anyway. Money bills in that country are supposed to originate in the Lower House, as they do in all civilized national jurisdictions. This one effectively originated in the Upper House. In order to disguise this irregularity, the senators had to dress the thing up as a non-money bill. That is how the “Emergency Economic Stabilization Act” became the more aptly-named “Paul Wellstone Mental Health and Addiction Equity Act”—by taking a bill already on the floor of the Senate, stripping out its text, and substituting the text of the bailout bill.
“The letter killeth, but the spirit giveth life.” This decadent habit of cautiously observing the letter of the law, while purposely ignoring the spirit, is at the root of so many enormities in contemporary politics and society. There are times when, given the complexity of the world, one must honestly bend (never break) a law, interpret it drolly, even turn a blind eye. But one should do such things in the cause of honouring the spirit of the laws, for the sake of justice; not in the cause of subverting them.
This is a problem not only in the U.S. but everywhere. We speak fondly of old-fashioned constitutional democracy, while in fact acknowledging it is a thing of the past. Everything from bloated omnibus bills, to “emergency” executive orders, to court reviews of legislation, is used to subvert a constitutional order, and thereby suppress political formulation of the popular will. The process has advanced to such a degree in Europe, thanks to the extraordinary power of the E.U. legal and political bureaucracies, that national assemblies are rendered powerless to oppose them.
The U.S. House of Representatives had defeated the bailout plan when it was already carrying many times its weight in lipstick. It was defeated because the thing itself was genuinely unpopular. Members of both parties had their switchboards jammed by constituents expressing outrage at the thing. They voted it down, even under the extraordinary pressure brought upon them by the White House and the congressional leadership of both parties. If I may be so old-fashioned, that is what democracy is for: to stop things the people just won’t have.
Now, curiously, in the week since that happened, a number of prominent economists have weighed in on the bailout measure, including supporters of both U.S. presidential candidates. It appears that all are appalled by the measure itself, and most consider it to be counter-productive. Some 230 of them signed an open letter to Congress, telling them not to be in a hurry.
Here is how John Cochrane, Myron S. Scholes Professor of Finance in the University of Chicago, characterized the bailout, in an interview with Fox News: “The legislation is like this: some boats are sinking, so rather than bailing those boats out, you blow up the dam and drain the whole lake.”
That comment, and many like it, was offered even before “sweeteners” were added, that would in themselves roll any economist’s eyeballs.
It is worth adding that not one of the politicians voting on the 450-odd-page bill can possibly have read the whole thing, let alone deeply considered the implications of its parts. Few of them have an understanding of the crisis they are legislating for. The blind are leading the blind.
Call me a populist (few do), but my “two cheers” support for democracy is predicated on the belief that usually, given enough information, and sometimes even when not given enough, the people know in their gut the difference between right and wrong, up and down, fresh meat and gangrene. And when they don’t, we’re all doomed anyway. I am seldom surprised when, after much research and deliberation, the “experts” finally embrace a carefully qualified equivalent to the knee-jerk view originally expressed on “Main Street.”
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