Favoring Corporate Interests Or Free Markets?

In “Capitalism After The Crisis”, Luigi Zingales does a wonderful job laying out the unique strengths of America’s free enterprise system and contrasts it to the crony corporatism found throughout most of the world.  He describes the origins of our uniquely egalitarian market system and how it has been eroded over the last three decades. And he highlights the unfortunate likely consequences of Paulson- Geithner financial policies:

“We thus stand at a crossroads for American capitalism. One path would channel popular rage into political support for some genuinely pro-market reforms, even if they do not serve the interests of large financial firms. By appealing to the best of the populist tradition, we can introduce limits to the power of the financial industry — or any business, for that matter — and restore those fundamental principles that give an ethical dimension to capitalism: freedom, meritocracy, a direct link between reward and effort, and a sense of responsibility that ensures that those who reap the gains also bear the losses. This would mean abandoning the notion that any firm is too big to fail, and putting rules in place that keep large financial firms from manipulating government connections to the detriment of markets. It would mean adopting a pro-market, rather than pro-business, approach to the economy.”

“The alternative path is to soothe the popular rage with measures like limits on executive bonuses while shoring up the position of the largest financial players, making them dependent on government and making the larger economy dependent on them. Such measures play to the crowd in the moment, but threaten the financial system and the public standing of American capitalism in the long run. They also reinforce the very practices that caused the crisis. This is the path to big-business capitalism: a path that blurs the distinction between pro-market and pro-business policies, and so imperils the unique faith the American people have long displayed in the legitimacy of democratic capitalism.”

“Unfortunately, it looks for now like the Obama administration has chosen this latter path. It is a choice that threatens to launch us on that vicious spiral of more public resentment and more corporatist crony capitalism”.

The Role Of The Constitution In Our Personal Political Agendas

I had the privilege the other day of being the interviewer in a public forum of a man that I respect very much. He has spent his career improving energy codes in the US to reflect the realities of building science and the easily reached possibilities for improved energy performance of buildings.

One of my question to him related to a requirement in the “American Recovery and Reinvestment Act of 2009” –  the stimulus bill. The bill requires that states adopt a more stringent energy code meeting the prescriptions of this national legislation.

While I strongly favor energy efficiency, building science and effective building codes, there are other things I personally value more – specifically the rule of law. So I asked my friend how he and other advocates reconcile this requirement of the stimulus bill with the Tenth Amendment to the US Constitution which very clearly states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”

His answer was nonchalant. I’ll paraphrase since I wasn’t taking notes: “The stimulus bill doesn’t require states to adopt the new energy codes. They only have to do that if they want the funding. They can always refuse the funding”. Other friends in the energy game have expressed similar willingness to simply ignore or end run the inconveniences of constitutional questions in order to improve energy codes.

This kind of Constitutional bypass seems to be a new norm in governance, not only from the Obama administration and their supporters, but also its predecessors. George Bush’s “No Child Left Behind” education program had similar bribery involved to coerce states to accept federal mandates that would otherwise be unconstitutional. Similar shenanigans have been going on for a long time to expand the power of the federal government in our lives.

What does it signify regarding the health of our democracy and our constitutional form of government when we encumber our children with massive debt and future federal taxes to bribe states into adopting otherwise unconstitutional mandates? What do such endeavors signify about our congressional leaders who each take office proclaiming: ” I do solemnly swear that I will support and defend the Constitution of the United States”? What does it signify regarding presidents who enter office with these words: “I do solemnly swear that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.”?

Many of my friends in the environmental movement consider energy and climate issues so urgently imperative that measures like the code dictates in the stimulus bill are unquestioned and the constitutional issues not even considered.

Other people with other primary issues of concern similarly treat their favored issue as a more important moral imperatives than the constitutional obstacles they inconveniently face. Advocates on both sides of some issues bring deep moral and religious beliefs to bear that they hold far more dear than their faith in the constitutional system of democracy we enjoy. Folks on both sides of the abortion, capital punishment and gay marriage debates come immediately to mind. Advocates for health care reform and all sorts of seemingly more morally mundane issues like energy codes and educational testing seem all too willing to simply ignore the fundamental precept of the Bill of Rights laid out in the Tenth Amendment.

Personally, I place a pretty high value the Constitution and the resulting freedoms we have enjoyed. It concerns me deeply when our government leaders are so willing to end run the intent of the Constitution and  borrow against our children’s future to bribe states into allowing them to bypass the framework for democracy laid out in our most fundamental legal document.

If we really need federal control of energy codes, education, health care, abortion or marriage, so be it.  Article V of the Constitution provides a mechanism to allow for the feds to acquire such powers,  provided the American people agree with those federal power grabs.

With federal legislation, budgets and deficits so wildly out of control, perhaps it is quaint and naive of me to reflect back to the Constitution to try to discern the proper role of federal government. But if we are to treat the fundamental basis of law in these United States so shabbily, then we should all perhaps be more concerned regarding  our freedom and the rule of law generally.

Maybe it is because we have ignored the Constitution for so long that our federal government is so out of control, deeply in debt and heavily intrusive in our personal lives. Perhaps it would do us all well to reflect a bit more on the United States Constitution and particularly on the Tenth Amendment.