Monday, September 29, 2008

Three Cheers for the U.S. House of Representatives

On this blog, I have often complained about the loss of balanced and limited government in the United States because of the failure of the U.S. Congress to challenge the President. But today, I can cheer the House of Representatives for rejecting the $700 billion bailout of Wall Street, and thus standing against the pressure from the White House to pass this without serious scrutiny.

Notice how this vindicates the institutional design of the constitutional framers. The design of the House of Representatives--particularly with a short term of two years--was meant to make the House closer to public opinion, while the Senate--with a six-year term--was expected to be more independent of public opinion. And, indeed, here we see that the House has been much more responsive than the Senate to public anger about the bailout, because all the House members have to face the voters in a few weeks.

There are many reasons why this bailout would be disastrous for the United States. But the most obvious is the foolish--and unconstitutional--delegation of virtually unlimited power to the Secretary of the Treasury.

In the original proposal a week ago, section 8 declared: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Read that sentence carefully and think about what it means that an American President would propose such absolute power vested in the hands of an unelected bureaucrat.

The proposal that was debated today has some checks on the Treasury Secretary's discretion. But he still has unlimited authority in deciding what he would buy and how much he would pay. He is not even required to seek the lowest possible price. Under some conditions, he would even have the power to bail out foreign central banks.

The Darwinian conservative accepts Lord Acton's famous maxim--"Power tends to corrupt, and absolute power corrupts absolutely"--because this follows from the imperfectibility of evolved human nature as driven by avarice and ambition. Anyone who takes this position could not support anything like the Bush bailout proposal.

We could be seeing here the first move towards a major political realignment in the United States. After all, the majority of the House has just voted against the leadership of the two major parties--including John McCain and Barack Obama. And they have voted on the side of Bob Barr (the Libertarian presidential candidate) and Ralph Nader. Barr has said: "We need to make Wall Street take the hit for its irresponsible investment decisions." Nader has denounced Bush's proposal as "a bailout for Wall Street crooks."

4 comments:

Anonymous said...

What the House did is insane. Most people are not aware why there is such urgency. The reason this bill has got to be passed is because the FDIC is OUT of money. Do you get it? For all your smug moral superiority about corrupt gov't (and I don't dispute this), if you have money in a bank, be very scared right now. You and thousands of others may be out their savings.

Something has got to shore up the system until better safeguards are in place.

MyTownTalks said...

I agree. This was the stupidest thing that could have been done. I don't agree with how we got here, but now is not the time for blame. We are all going to suffer. I wrote more about this at

http://www.mytowntalks.com/news/economy-news/nancy-pelosi-speech-sinks-bailout-bill.php

Anonymous said...

I am a widow living on money generated by my stock. I think this was the stupidest thing they have ever done. Wait until all those people who were demonstrating against this find out what the consequences are to them. I can't wait to see them screaming like I will be.

Anonymous said...

The Darwinian Conservative is going to be disappointed soon. Congress may have rejected the bill today, but it will pass another like it, except perhaps with a bit more pork, tomorrow. And "Constitutional principles" will have nothing to do with it, and especially not of the libertarian variety.