A Shorter Matthew Yglesias

While fretting over state efforts to undermine Obama's health reform Yglesias offers this bit of wisdom:

My impression is that the quality of governance offered by state governments in the United States is generally low, and that mainly you should try to avoid handing over the administration of anything to state government unless there’s truly no other reasonable option.

Now this is a sentiment I can really get behind, but it really is much better if you just take out the word "state". Here is the edited and much improved, if I do say so myself, version:

My impression is that the quality of governance offered by...governments in the United States is generally low, and that mainly you should try to avoid handing over the administration of anything to...government unless there’s truly no other reasonable option.

It baffles me that anyone could hold such a low view of the state governments while simultaneously believing that the federal government is capable of substantially better performance. But hey, there's a lot of things I don't understand.

The food is terrible, but the portions just got bigger.

One thing that puzzles me about supporters of health care reform is how optimistic they are about the federal government's ability to positively change the health insurance market.

Many of them just spent eight years denouncing the incompetency of the federal government from Guantanamo Bay, to the non-existent WMD's, to the failed response to Katrina. Do these people actually believe that just because the White House changed occupants the effectiveness of federal government interventions will dramatically increase? And our response to an era when the federal government has shown just how poorly it can do when given the chance, is to grant it the biggest expansion of power in fifty years? It just doesn't make any sense to me.

While there certainly are appropriate functions of the federal government, I'm skeptical that managing the ins and outs of the health insurance market is one of them.

More broadly, given the federal government's track record on a whole range of issues, the proposition that we ought to expand its influence is, at best, dubious, and at worst, foolhardy.

Dept. of Unintended Consequences ARRA Edition

Via Senatus:

A group of “Democratic senators is urging the Obama administration to suspend an economic stimulus program aimed at financing renewable energy, complaining that money is going to projects that are creating jobs in foreign countries,” the AP reports.

The four senators, led by Chuck Schumer of New York, wrote to Treasury Secretary Timothy Geithner on Tuesday to request a moratorium on the Recovery Act program. They asked that the moratorium remain in place until they can pass legislation mandating stimulus aid flow only to projects which preserve and create U.S. jobs.

"A critical Recovery Act priority is investment in the domestic renewable and clean energy industry, not investment in foreign manufacturers," the senators wrote in the letter...

Please keep this episode in mind over the next few weeks. As the healthcare debate draws to a conclusion, the claim that "if you like your current healthcare, you will get to keep it," is likely to be quite loud.

The fact of the matter is that it is really hard to predict the outcome of having 500 people get together and make changes to something as big and diverse as the U.S. healthcare system.

You don't have to believe that the President, or anyone else, is lying when they tell you this reform won't change your current healthcare. Humankind has an almost limitless capacity for self-delusion. This capacity is particularly pronounced in those that choose to ignore how fundamentally flawed we, and they, all are.

More time under the TARP

Senatus reports that Assistant Secretary for Financial Stability Herbert M. Allison went to Capitol Hill and knocked 'em dead with his Hank Paulson impersonation:

The Treasury Department “is unlikely to discontinue its $700-billion relief program by the year’s end,” according to The Hill.

Lawmakers originally scheduled the Troubled Asset Relief Program (TARP) to conclude this December, but they also permitted Treasury Secretary Tim Geithner to extend the program until October if he felt he needed the extra time to rehabilitate struggling firms.

While lawmakers have recently signaled their dissatisfaction with that idea, Assistant Secretary for Financial Stability Herbert M. Allison suggested to the Senate Banking Committee on Thursday that an extension was still likely.

"Declining prices in the commercial real estate market could put additional pressure on bank balance sheets and capital positions, while continued downward pressure on housing prices could stall a nationwide recovery," he said during the hearing. "In this context, it is prudent to maintain capacity to address new developments. By bolstering confidence, having such capacity may actually reduce the need to use it." [E.A.]

You may recall that Paulson used this same logic in pushing the various bailout packages through Congress last fall. I believe his version revolved around not needing to use a "bazooka" as long as everyone knew you had it.

Well, it didn't work then and it won't work now. The Obama administration should drop this utterly senseless defense of the program. I'm not buying it and neither should any sane person.

The overwhelming message from various administration officials has been that the economy is recovering. If that is the case, why the need to continue the TARP?

The real answer is that once power is ceded to the government it is difficult to get it back. Ever. This is particularly the case when it comes to the federal government.

To be sure this is one area where Washington demonstrates the much ballyhooed bipartisanship. Therefore it is very important that voters think twice before we surrender any more power over our affairs to government at any level.

Petri/Kucinich Alliance?

OK, not really, but Open Congress reports they agreed on this:

During the House Education & Labor Committee’s mark-up of the health care bill (H.R. 3200) today, Rep. Dennis Kucinich [D, OH-10] proposed and passed an amendment that would remove legal barriers barring a state from creating a Medicare-like single-payer health care system to guarantee insurance for all of their citizens.

Thirteen Republicans voted with Kucinich, including Wisconsin's own Petri.

This would allow states to create their own single payer health care systems.

Recent debates have largely turned on the question of whether or not the federal government should get involved in what is largely private enterprise (autos, banks, health care). There is another question, though, that in my mind is just as important.

We have many other levels of government in this country, some of which might be better suited to address the concerns of the citizenry. Maybe sometimes there is a need for government intervention, that doesn't necessarily mean it has to be the federal government.

Can we govern out of ignorance?

Yglesias and others have highlighted a recent poll in which only 24 percent of respondents correctly identified the current 'cap & trade' proposal as having to do with the environment.

29 percent thought this phrase had to do with regulating Wall Street. I didn't dive into the poll results, but does this mean that people thought the New York Stock Exchange was going to require traders to wear hats while they worked?

This reminded me of a recent description I read of one our nation's political debates which the paper described as being marked by 'ignorance and enthusiasm.' This is no way to run a country. I've said it before (somewhere) but I will say it again: An ill-informed and uninterested electorate will always and everywhere result in bad governance.

There is something of a chicken and egg problem at work here. Is our government exceedingly complex in order to keep a majority of people ignorant and allow those in power to remain in power? Or has the complex bureaucratic apparatus sprung up to fill the void left by a disengaged and ignorant public?

Either way, the only options going forward are increased civic involvement to force a return to government by and for the people; or our continued enfeeblement at the hands of government and the inevitable enslavement that will result.

Geithner's performance reflects on him and us too.

Journalism outfit ProPublica and The Washington Post have an article out dealing with Tim Geithner's time as head of the New York Fed. The authors reach this conclusion:

Although Geithner repeatedly raised concerns about the failure of banks to understand their risks, including those taken through derivatives, he and the Federal Reserve system did not act with enough force to blunt the troubles that ensued [1]. That was largely because he and other regulators relied too much on assurances from senior banking executives that their firms were safe and sound, according to interviews and a review of documents by The Washington Post and the nonprofit journalism organization ProPublica.

While I don't know enough about Geithner's time at the Fed to provide a judgement as to his overall performance, there is nothing in this particular conclusion that would make me think anything less of the Secretary. But what about the notion that Geithner was too close to the big financial firms he was supposed to be watching? I believe this notion, and the conclusion of the ProPublica/Washington Post report, makes the mistake of confusing cause and symptom.

The root cause of Geithner's ineffectiveness as regulator, and the general ineffectiveness of the entire US regulatory regime, was the lack of political will to develop, maintain, and enforce effective regulation.

When I say political will, I am not talking about the 500 some odd people that make up the Congress and hold the office of the President. The real source of political will in a representative democracy is, of course, the voters.

An uninformed and uninterested electorate will always result in bad governance, regardless of the talents (or lack thereof) of specific officeholders.

What about the pernicious influence of special interests and money in politics? Both of these are corrosive to a healthy democracy, but both require a hothouse of voter apathy and ignorance in order to thrive.

What about the fact that the Fed is such an undemocratic institution? Again, this is a result, not a cause, of voter indifference. The Fed is a creation of our government and we are not powerless against it like some natural disaster. The Fed may be notionally insulated from political influence, but ultimate power still resides with the voters.

The fact of the matter is that neither Barack Obama nor Rush Limbaugh, Barney Frank nor Paul Ryan, Harry Reid nor Jim Demint, is going to come up with the one great idea that saves us from a repeat of the current crisis. Instituting an effective regulatory system that still allows for the kind of innovation and growth that powers the American economy is a necessary and difficult task that falls to the citizenry, not just those who happen to be in power at the time.

This is not meant to relieve Tim Geithner, or any other appointee or officeholder, from personal responsibility.

This is meant to note that the personal responsibility for good governance extends far beyond a few particular individuals to all those that hold the title of citizen. This is a responsibility that we neglect at our own peril.