Government Reform

Voters to Congress: Fix Congress!

Gallup: “After returns from Tuesday’s midterm elections confirmed that the Republicans will maintain control of the House and take control of the Senate, attention now turns to what actions the new Congress should take. Nearly a third of Americans, 31%, say their newly elected representatives should not focus on a specific issue, but rather on fixing the way Congress operates, including paying more attention to constituents, compromising and getting things done.”

Americans' Priorities for the New Congress

Americans Undecided on Government’s Role

Gallup: “Americans continue to divide almost evenly when asked to rate their preference for government activity on a 1-to-5 scale. Currently, 35% rate themselves a ‘1’ or ‘2,’ indicating that they favor a limited government that ‘provides only the most basic government functions.’ Meanwhile, 32% rate themselves a ‘4’ or ‘5,’ tending to prefer a government that ‘takes active steps in every area it can to try and improve the lives of its citizens.’ The remaining one-third of Americans fall in the middle.”

“Substantial percentages of each party’s supporters — 38% of Democrats and 26% of Republicans — place themselves in the middle on the 5-point scale. And one in six Republicans say they favor a more active government, while one in 10 Democrats favor a less active one.”

“The divided preferences on government activity do not give elected leaders clear direction in deciding whether to rely on government or nongovernment solutions to the nation’s biggest problems. To some degree this may help explain why the president and Congress have had difficulty in addressing some of the major issues facing the country in recent years.”

Trend: Preferences Regarding Federal Government's Role

Credit Ratings ‘Shopping’ by Banks Still a Risk

Matt O’Brien of the Washington Post reports that credit rating agencies are still allowing banks to shop for the most favorable ratings on questionable bonds.

“‘Ratings shopping,’ of course, gives credit rating agencies good reason—i.e.,  their bottom lines—to give banks the ratings they want.”

“Dodd-Frank didn’t fix this, and now it’s coming back … The Financial Times reports that banks are once again asking around to get AAA ratings on dubious bonds. One way to tell is that Fitch has only ‘been hired for four of the 29 subprime auto ABS deals this year, after telling issuers that the vast majority of bonds did not deserve AAA ratings.’ … We haven’t gotten rid of the credit rating agencies’ perverse incentives to rate bonds better than they deserve just to drum up business.”

“It was dumb enough to create a system that encourages the credit rating agencies to take a Panglossian view of the bonds they’re supposedly rating. It’d be even dumber to leave it in place after we’ve seen what a disaster it is.”

America’s Trust in Government at New Low

Gallup: “Americans’ trust in each of the three branches of the federal government is at or near the lows in Gallup’s trends, dating back to the early 1970s. Americans’ trust in the legislative branch fell six percentage points this year to a new low of 28%. Trust in the executive branch dropped eight points, to 43%, and trust in the judicial branch, at 61%, is also the lowest measured to date.”

“Although trust in the executive branch was lower during the Watergate era, the erosion of trust at that time was limited to that branch. Today, less than a majority trust the executive and legislative branches, and judicial trust, though still high on a relative basis, is the lowest Gallup has measured.”

Trend: Americans' Trust in the Three Branches of the Federal Government

The Myth That Small Government is Good Government

Jonathan Chait contends that the real problem is not “Big Government” but “what you might call Big Small Government.”

“In very different ways, both right and left have exhibited forms of this mental block.”

On the right there is the “axiomatic belief … that bad government equals big government, and big government equals centralized government … This has frequently left conservatives in the odd position of neglecting to tout powerful cases where their anti-government formula has a genuinely useful application.”

“It may seem intuitive that physical proximity makes a government more accountable. This is the image small-­government acolytes conjure when they praise the virtues of local government against the distant capital. But even if it was once true that geographic space inhibited representation … it is certainly no longer. Who do you know more about: your senator or your state legislator? How about your city council member?”

“Left and right alike use small and local as terms of approbation, big and bureaucratic as terms of abuse. None of us is equipped to see that the government that actually oppresses us is that which is closest to us.”

It’s Time for a National Carbon Tax

In the face of uncertainty over the accessibility of shale oil and gas, the Bloomberg Editors make the case for a national carbon tax.

“This uncertainty [can] hinder the development of renewable power. Investors find it hard to look ahead to see whether green power sources will be squeezed out by cheap oil and gas or be in great demand because the price of oil and gas is so high.”

“So how to encourage … the development of advanced biofuels and electric vehicles, as well as wind, solar and geothermal power? … The most efficient strategy is to put a predictable, long-term price on carbon, through a national carbon tax.”

“Ideally, such a tax would make sure the price for emitting a ton of carbon was equal to society’s cost of dealing with that carbon. With the environmental costs of greenhouse-gas pollution thus factored into the cost of oil and gas, the market can better determine which renewable-energy projects make sense.”

What is the Least Corrupt State in the Nation?

Reid Wilson: “In Oregon, strong oversight and audit rules ensure that state officials keep their hands out of the cookie jar. Data from the Justice Department, compiled by political scientists at Indiana University at Bloomington and the City University of Hong Kong, show that, over a period of 32 years, there were fewer corruption convictions in Oregon than in any other state, when controlling for the number of state workers.”

“Oregon registered 1.28 corruption convictions per 100,000 public employees between 1976 and 2008. Washington, Minnesota, Nebraska and Iowa also had fewer than two convictions per 100,000 employees.”

“Those states score well because of robust transparency laws, according to ethics watchdogs.”

“At the bottom of the list, Mississippi, Louisiana and Tennessee all registered more than four times more convictions than the least-corrupt states.”

How to End the Second Term Curse

Larry Summers: “Would the U.S. government function better if presidents were limited to one term, perhaps of six years? The unfortunate, bipartisan experience with second terms suggests the issue is worthy of debate. The historical record helps makes the case for change.”

“Why the record is not dispositive, however, is suggested by the term ‘lame duck.’ As the phrase suggests, leaders nearing the end of their time in office lose the ability to influence other actors by offering future rewards and punishments or by making deals in which they commit to future actions. If this is the main reason second terms are difficult, then removing the possibility of reelection could simply pull the problems forward into first terms.”

“This is why many scholars regard the current constitutional limit of two presidential terms as problematic. However, reviewing the fairly dismal experience of second terms, my guess is that problems caused by lame-duck effects are much smaller than those caused by a toxic combination of hubris and exhaustion after the extraordinary effort that a president and his team must exert to achieve reelection.”

Financial Reform: Another Obama Success

Paul Krugman highlights the Obama administration’s success with its “other big push, financial reform.”

“The Dodd-Frank reform bill has, if anything, received even worse press than Obamacare, derided by the right as anti-business and by the left as hopelessly inadequate. And like Obamacare, it’s certainly not the reform you would have devised in the absence of political constraints.”

Dodd-Frank gives regulators Ordinary Liquidation Authority “so that in the next crisis we can save ‘systemically important’ banks and other institutions without bailing out the bankers.”

“Bankers, of course, hate this idea; and Republican leaders like Mitch McConnell tried to help their friends with the Orwellian claim that resolution authority was actually a gift to Wall Street, a form of corporate welfare, because it would grease the skids for future bailouts.”

“Did reform go far enough? No … But Wall Street and its allies wouldn’t be screaming so loudly, and spending so much money in an effort to gut the law, if it weren’t an important step in the right direction. For all its limitations, financial reform is a success story.”

Abandoning Ex-Im Impairs U.S. Companies’ Ability to Compete

Joe Nocera reacts to the movement against reauthorization of the Ex-Im Bank.

“I continue to find it mind-boggling that anyone in Washington would want to pursue a path that is so clearly destructive to the economy. But that is exactly what is happening. Conservative organizations like Heritage Action for America and Americans for Prosperity (financed by the Koch brothers) have made killing the Ex-Im Bank their cause.

“Most of the arguments made against the Ex-Im Bank revolve around its help to the big companies, not the small ones … That’s true, but it’s the customers, not the companies, that are pushing for export credit guarantees.

“Other countries have no interest in walking away from export assistance; indeed, countries like China and Japan are far more wedded to this kind of assistance than the U.S. is.”

“In its editorial on Monday, The Journal mocked the phrase ‘unilateral disarmament’ in regards to the Export-Import Bank. But that is what it would be. There are times when we have to accept the world as it is, rather than how we wish it would be.”

Don’t Use the VA Scandal to Derail Health Reform

Paul Krugman cautions that the Veterans Affairs scandal “could cause us to lose sight of a much bigger scandal: the almost surreal inefficiency and injustice of the American health care system as a whole. And it’s important to understand that the Veterans Affairs scandal, while real, is being hyped out of proportion by people whose real goal is to block reform of the larger system.”

“As you might guess, conservatives don’t like the observation that American health care performs worse than other countries’ systems because it relies too much on the private sector and the profit motive. So whenever someone points out the obvious, there is a chorus of denial, of attempts to claim that America does, too, offer better care. It turns out, however, that such claims invariably end up relying on zombie arguments — that is, arguments that have been proved wrong, should be dead, but keep shambling along because they serve a political purpose.”

“So here’s what you need to know: It’s still true that Veterans Affairs provides excellent care, at low cost … but Congress has provided neither clear guidelines on who is entitled to coverage, nor sufficient resources to cover all applicants.”

“A scandal is a scandal, and wrongdoing must be punished. But beware of people trying to use the veterans’ care scandal to derail health reform.”

Faith in Congress Hits Historic Low

Gallup: “Americans’ confidence in Congress has sunk to a new low. Seven percent of Americans say they have “a great deal” or “quite a lot” of confidence in Congress as an American institution, down from the previous low of 10% in 2013. This confidence is starkly different from the 42% in 1973, the first year Gallup began asking the question.”

Confidence in Congress since 1973

A Lackluster Congress

Derek Willis for The New York Times writes that “this House is on track to produce the lowest number of legislative proposals since the Clinton administration. Through mid-May, representatives introduced 18 percent fewer bills compared with the same point in the previous Congress. That’s the largest drop between Congresses in the period beginning in 1995 … The number of lawmakers who have introduced at least 25 proposals has fallen by nearly two-thirds compared with the previous Congress. The number who have produced five or fewer pieces of legislation has jumped 81 percent.”

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There are a few theories for the low numbers: “politicians aren’t seeing any electoral benefit from introducing bills, … the decline of the committees, [and] ‘there are a number of Republicans that see their job as stopping Barack Obama,’ rather than passing (or even proposing) laws.”