The Establishment Paradise (Part One)

(Note: This is the first segment in a three part series.)

Is elective office still the noble calling to public service it was once intended to be?  Or has it evolved to more of an establishment paradise for the ruling class, with ease and plenty far removed from the day to day lives of ordinary citizens?

As the summer of 2012 begins to wind down, the November US presidential election beckons on the near horizon.  It’s an excellent time to take the long view on the state of our American democracy.

At last look the latest public opinion polls indicate that members of US Congress experience an approval rating hovering at or near 9% among likely American voters.  The statistic is startling, the lowest rating in fact since statisticians began to record figures.  Long in the making, the phenomenon has been the subject of ominous warning bells ringing out for more than two centuries.

But let’s begin with the present.  What began as a call to selfless public duty for the good of the nation has evolved through the course of US history.  Today, unfortunately, public service is no longer seen as a selfless commitment to the welfare of others.  It is more like a self-centered establishment paradise.  The reasons are apparent.

Ordinary citizens may wonder what it’s like to live in an establishment paradise.  Candidates for public office in quest of so called public service make lofty promises to their courted constituents.  But are these promises real?  Or are they merely illusions, or expectations?   Or are they kept only “up there” in the establishment paradise?

During the 2008 presidential campaign, then-candidate Barack Obama lamented the high personal cost of aspiring toward a life of public service.  Red lights, traffic jams, slow, methodical passages through airport security, missed flights.  Worst of all, there would be little to no time for family.

Of course, after the election things would be much different.  Traveling in a limousine is really much more convenient.  Nobody steps on your toes, pushes you from behind, pokes you in the ribs.  Every light is green.  You travel fast without stopping.  Traffic police and security salute you.  And there is Air Force One.

For US Congressmen, the change is perhaps more subtle but equally sweeping.  Through the generosity of prior legislators, sort of as a present to themselves, upon election, members receive Cadillac-type health insurance coverage that is not the privilege of all citizens.  They also receive a federal pension which sets them up financially, for life.  Despite an obvious conflict of interest, nor are they prohibited from investing in industries and businesses they are called upon to govern.  They are wined and dined by paid lobbyists, special interests and political action committee interests whose funding sources need not be disclosed under the present law.

And they use the power of the incumbency to retain and cement their vaunted status in public service.  While the selfless George Washington created the precedent in the executive branch to limit the presidency to two successive terms totaling eight years, US Congressmen face no such limitation.  Many “run” for office seemingly forever, transforming public service into an exclusive property right with hereditary status.

In the third branch of US government, the federal judiciary, members at the highest levels are appointed for life.  And so it is not inconceivable that still-in-his-early-50s John Roberts, new Chief Justice of the Supreme Court and author of the landmark 2012 decision upholding the 2010 Affordable Care Act, can retain his position on the high court for 40 years or longer.

Over time, this is how elected representatives in a nation of laws become alienated from the nation and themselves.  Laws are passed to serve the special interests, the ones pouring money into the personal comforts of public servants, at the expense of the general welfare and public interest.

They give well-worn speeches on the yet elusive progress toward paradise for all citizens.  But that paradise is but a fiction for the masses of ordinary citizens.  The establishment paradise has been constructed and evolved in such a fashion that it is to remain that way in the name of the established order, conservatism and preservation of the powerful status quo.  As a result, the ordinary citizen's faith in the democratic process is tested.

Boris Yeltsin may not be a familiar name to ordinary American citizens.  But his name is very familiar to ordinary Russians.  Mr. Yeltsin had a unique vantage point in Russian politics.  In 1981 he was “elected” to serve on the Central Committee of the Communist Party of the Soviet Union, which was the highest party authority between governing congresses.  Then, after the fall of the communist government in 1989, Mr. Yeltsin was elected by popular vote as the first president of the new Russian Federation, an experiment in democratic and market reform, in which position he served from 1991 to 1999.  He spoke of the changes he foresaw with the imminent collapse of the former Soviet system:

Of course, our establishment cannot run away and hide.  The moment will come when they will have to give up their private dachas (government owned vacation homes) and answer to the people for having hung on to their privileges tooth and nail.  Even now some of them are starting to pay the price for their former “establishment” status.  The massive defeat at the polls suffered by party and government officials who stood for elections is the first warning bell for them.  They are now being forced to take steps to satisfy the demands of the voters.  But they make concessions reluctantly and grudgingly; they are so wedded to their privileges that every possible contrivance, including bald lies and sheer deception, is employed by them.  They will, in fact, do anything to slow down the process of reform.

(The second segment in this three part series turns to a discussion of what can happen when ordinary citizens lose faith in their government...)

-Michael D'Angelo 

Privatized Gains, Socialized Losses (Part Two)

(Note: This is the second and concluding segment in a two part series.  The first segment documented how the forces of Wall Street appeared to “outsmart” the US government once again.  Finding a creative way to promote and package financial derivatives, Wall Street escaped protective federal regulation.  As a consequence, a financial bubble ensued, followed by the Great Recession of 2008 from which the masses of ordinary citizens are now attempting to recover.)

Are the stewards of the law capable of keeping up with the powerful forces of Wall Street this time around?  When the financial crisis has abated and things return to a state of normalcy, do we conveniently forget the lessons of history?  What, if anything, keeps us on a forward course, refusing just to ride the cycles of boom and bust, ascent and decline?

In the aftermath of the Great Recession of 2008 the US Congress with President Obama’s strong backing has passed what we are advised is the most sweeping expansion of financial regulatory reforms since the Great Depression.

But, but within minutes of the bill’s passage, several Wall Street groups were leveling criticism at the new regulations, as was The Business Roundtable, the US Chamber of Commerce and other business organizations.

The substance of the law is said to subject more financial companies to federal oversight and regulates many derivatives contracts, while creating a consumer protection regulator and a panel to detect risks to the financial system.  However, a number of the details have been left for regulators to work out, “inevitably setting off complicated tangles down the road that could last for years.”

Before signing the legislation, President Obama remarked that “because of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes.”  Mr. Obama said that “There will be no more taxpayer-funded bailouts.  Period.”  Ordinary citizens, however, are expressing frustration and doubt in attempting to take Mr. Obama at his word.  This stems from a working knowledge of the history and underpinnings of the US financial industry, dating back to Alexander Hamilton and his plan for US capitalism based on the British model.

But does anyone doubt the profit-induced mindset of Wall Street to creatively devise new ways to bypass Federal legislation again, no matter how well conceived that legislation appears to have been?  And does anyone also doubt the human element that federal regulators will once again be asleep at the switch, when the time comes for decisive action?  Last time, it took about 75 years for Wall Street to circumvent the Feds, a tribute in and of itself to the staying power of the New Deal.  This time, surely it is again not a question of if, but when.  Where profit is concerned, Wall Street has also proven to be very patient in biding its time.

While ordinary citizens may rightfully give Mr. Bernanke a pass, presently, they are also angry.  The federal government has bushels of money for Wall Street, the large banks, insurance companies and the auto industry, to name but a few, while Main Street is left to fend for itself.  The results and the present economic malaise are apparent.

Frustration and anger are rooted in the reality that the rules of the game are neither particularly fair nor the playing field level.  Raw emotions are heightened by the fact that financial gain from success is privatized, while loss from failure is socialized.

That is, if Wall Street takes a financial risk which succeeds, Wall Street doles out the reward to individuals privately.  On the other hand, if Wall Street’s gamble should fail, the loss is spread out socially among the masses of ordinary citizens.  As a consequence, it is said that there is no accountability on Wall Street.  It is also of little consequence that the risk taken is seemingly reckless, great enough in fact to take down the entire national economy.

Frustrations and anger are further magnified by the fact that ordinary citizens must live within their means.  That is to say, ordinary citizens cannot spend what they do not have.  If the money is not there, spending must be reduced and consequently brought back into balance with income or revenue.  Ordinary citizens wonder, if these are the rules of the road, then why do they not also apply equally to their state and federal governments, which are awash in a sea of financial debt and borrowing?  Of course, it is not always that simple.

Are we ordinary humans capable of not only aiming higher but also achieving real, meaningful progress?  Then-US Senator, Barack Obama, has expressed similar sentiments:

I wonder, sometimes, whether men and women in fact are capable of learning from history --- whether we progress from one stage to the next in an upward course or whether we just ride the cycles of boom and bust, war and peace, ascent and decline.

Given the predictability of our imperfect human nature, one can only wonder.

-Michael D’Angelo