Wednesday, June 30, 2010

Beating A Dead Horse

The notion that we ought to take our time to study and understand a problem before reacting to it, especially when it comes to something as complicated as legislating, is one I've discussed several times, most recently with regard to financial services reform.  Still, Congress is on the precipice of enacting a massive financial services reform law despite the fact that the Commission that Congress itself created to better understand the causes and nuances of the crisis has not yet completed its work.


One proponent of reform, federal judge and author of A Failure of Capitalism on the financial crisis, Richard Posner, explains this phenomenon:
But just as politics requires that President Obama be seen to be doing something about the oil leak in the Gulf of Mexico, though there is nothing he can do, so politics requires that Congress be seen to be doing something to prevent another economic disaster, though there is nothing it needs to do.
Posner doesn't say that the government doesn't need to change its policies, but that the changes necessary aren't changes in the law.  In short, they can be made largely without Congressional action.  Now, that's a problem, because if Congress doesn't solve the problem by passing a bill (the only thing Congress does is change the law by enacting bills) then Members won't be able to claim credit by the November election.

And THAT's why its rushing to pass legislation despite the ongoing work of the Financial Crisis Inquiry Commission - a government body created BY CONGRESS to report on the crisis's cause.  The Commission's work is ongoing (today, in fact, it is holding a hearing on the part played by derivatives, the regulation of which was one of the most contentious issues that delayed the financial services bill) yet their work will not be factored into the legal reform.

Monday, June 28, 2010

The Tea Party Explained

This analysis is one of the best explanations I've read about the Tea Party, which is a loose collection of people who share one thing in common: frustration with the status quo.  It comes in the wake of the South Carolina primaries that saw two Tea Party favored candidates prevail.  In both cases, they were minorities beating middle aged white guys.

A pattern seems to be emerging that runs through the views of those who identify with Tea Party, and it doesn't appear to be a strictly "throw the bums out" mentality.  It doesn't make sense to punish people for nothing other than incumbency, and many incumbents are surviving.

The question is why some incumbents survive if the Tea Party nothing more than a "throw the bums out" style movement:
This question that can be easily answered by those who have argued all along that the Tea Partiers are just a collection of crackpots and dodos, incapable of seeing where their true self-interest lies. What else would you expect from such idiots? But there is another way of interpreting the South Carolina primaries. The real target of Tea Party wrath is not the establishment or incumbency, but cronyism.
Such cronyism exists in many aspects of life, not the least of which is Wall Street and its relationship with Washington, DC.  There is, perhaps, nothing more American than the notion people should advance on their own merits rather than their status or birth.

It will be interesting to see how this theme continues to play out through the rest of the year.