Terms of Office in a Representative Democracy: Greek Austerity

In September 2012, the E.U. state of Greece was in the process of working out a 11.5 euro austerity plan that would involve forced retirements in public sector and pension cuts so the E.U. would approve another installment of the bailout to the state. One resident remarked at the time, “Mark my words. In the coming months, there will be a revolution, and this government will fall.”[1] This sounds a bit like “buyer’s remorse” concerning the election the previous June  in which the anti-bailout/austerity party barely lost. What about all the Greeks who voted for Samaras, the pro-bailout/austerity leader? It cannot be assumed that they, too, had buyer's remorse even as the additional cuts went into effect. Even if the electorate shifted in the direction of anti-austerity as the forced retirements and pension cuts occurred, the ingrediants of representative democracy includes terms of office to protect the elected officials by giving time for their policies to work. Representative democracy does not reduce to the momentary passion of the masses. According to Plato, mob rule is the bad form of democracy. 
What if conditions significantly deteriorate and the representatives elected to office refuse to change course? Does this justify truncating the term? The German-led “austerity-only” approach to the Greek debt crisis clearly exacerbated the Greek fiscal condition. Austerity cuts resulting in further contractions of the economy meant more unemployment payouts by the Greek government even as it had to cut spending. Had Samaras' voters anticipated this? Is this question even relevant? The failure to anticipate how a policy once enacted will affect the economy does not nullify the votes cast or justify depriving the office holder of his or her the full term. 

                                                                                   

Terms of office enable elected representatives to do the right thing even when the masses at the moment are exerting tremendous pressure on the representatives to do what is politically expedient but not in the people's best interest. This can be distinguished from stubborn office-holders who rigidly hold to their ideology at the expense of the people's best interest. Because the term-of-office protects both good and bad office holders, rather than rewarding the courageous representatives and penalizing the office-holders who use their term be able to go too far, the term element of representative democracy is not enough.  
In 2012, Samaras needed some time to do what might not match the momentary passions of the mob as retirements and pension cuts were being inflicted. Had the additional cuts triggered a meltdown in the state's economy with Samaras holding firm on the state budget cuts, a snap election could have been necessary not only to stop the meltdown, but also to prevent a revolution. 
Is it a good idea that representative democracies have terms of elected office? The answer can only be vague or indeterminate. In parliamentary systems, a legislative vote of no confidence can of course trigger an election. The term is truncated. Ideally, this is not due to office-holders withstanding political pressures that would put political expedience above the best interests of the state and its people. The problem is that we cannot be sure. 

See related: Skip Worden, Essays on the E.U. Political Economy: Federalism and the Debt Crisis.

1. Liz Alderman, “Greek Government and Public at Odds Over New Cuts,” The New York Times, September 6, 2012. 

A Teachable Moment for Americans: Solidarity as a Shared Value in European Identity

Speaking at the Schloss Bellevue palace in Berlin, President Joachim Gauck used a televised speech in February 2013 to make the case for more European integration. At the time, calling for “more Europe” in terms of shifting still more governmental sovereignty from the state governments to that of the Union was not a very popular task. Further limiting the power of his message is the fact that the German presidency is largely ceremonial , unlike the office of governor in an American state. Nevertheless, Gauck was determined to put the contemporary condition of the “European project” in favorable perspective. The most striking—and even effective—aspect of his speech is his repeated references to “European citizens.” Had he used “Germans” instead, he would have subtly undercut his own message. The prime minister of the E.U. state of Britain at the time would never have used the term, "European citizens." Nor would he have agreed with the E.U. value of solidarity and especially the ensuing social policy. The American media tended to follow suit, rather than covering the otherness of the other—the European Union as having a societal political value that has been very recessive in the United States. In this regard, I contend, the American media companies let down the American people, who would have stood to benefit from the wider perspective that would have enriched American political debates from the tyranny of the hegemonic value ensconced in American culture: that of the self-sustaining individual ideally in the state of nature, economically speaking. Reporting on the principle of solidarity would have given Americans the acccurate picture of the E.U. as being more than just a trading "bloc." This point in turn could have resulted in Americans coming to the realization that the E.U. is equivalent to the U.S.—both being empire-scale federal systems wherein governmental sovereignty is split.

Acknowledging the fiscal and structural imbalances that gave rise to the debt crisis in several E.U. states  and the problems entailed in “patching up” the problems by emergency measures, Gauck nonetheless pointed to non-economic elements of the European project that were also in crisis. “It is also a crisis of confidence in Europe as a political project. This is not just a struggle for our currency; we are struggling with an internal quandary too.”[1] This problem was predicated on the point that the strengthening of a European identity comes out of a recognition of shared values, rather than in differentiation from other cultures outside of Europe.

Too often, Europeans have artificially restricted their values to their particular state. Typically, Europeans would preface a self-referential remark with, “In my country,” only to describe a custom or value that is by no means limited to, distinctive in, one particular E.U. state. Even in saying “more Europe means a European Germany,” Gauck risked falling into this trap, at least in terms of keeping Europe as secondary. More in line with his thesis would have been the expression, more Europe means more European. More European in turn means more of a consciousness of values that European citizens (and residents) share, whether or not people in Africa, Asia, or America happen to esteem those values too. So the question facing European citizens is this: What values do you share?

From an American perspective, the salience of the value of solidarity held by Europeans would be so obvious, were it made transparent by the American media, because solidarity has been such a recessive value in the United States. Ironically, World War II was perhaps the last time solidarity in terms of “we’re all in it together” was explicitly pushed and acknowledged in America. Even then, the value was more in terms of sacrificing for a common purpose rather than seeing to it that the most vulnerable among us do not fall through the cracks in terms of sustenance. In Europe, solidarity has more of a social welfare quality.

Moreover, whereas Americans have tended to apply human rights only to the harm caused by tyrants abroad, Europeans have tended naturally to extend to the value to covering the basic sustenance rights of one’s own fellow citizens as well. The shift needed for a stronger European identity has included becoming aware of the duty to apply the value domestically to other Europeans rather than merely to people in one’s own state, or “country.” By implication, “European Germans” would feel solidarity with starving “European Greeks.” This element twas largely missing from the austerity response of E.U. finance ministers to the debt crisis from 2010 to 2012. So even in the E.U., the principle can succumb to greed and interstate clashes of economic interests. I submit, therefore, that “more Europe” involves not only a stronger value-fueled-identity, but also more fiscal redistribution at the federal, or E.U., level. Put another way, Europeans surely have more shared values than that of austerity. It is a pity that the American media failed to capture this point in reporting on Greek austerity, which more closely resonates with the values dominant in the U.S.

1. Ian Johnson, “German President Joachim Gauck Uses Major Speech to Call For “More Europe,” DW, February 22, 2013.

The Italian Election in 2013 Excessively Roiled Markets

With no party having gained sufficient seats in the upper house of the Italian legislature, analysts warned on February 25, 2013 of a “hung parliament,” which would make it even more difficult for structural and fiscal reforms to be passed. Even though the Democratic Party appeared to have gained a slim victory in the lower house, giving that party the majority of 340 seats out of 630, the upper and lower houses have equal law-making ability so even the possibility of a hung parliament roiled markets. I contend that this is yet another case of financial analysts over-reacting to political uncertainty. 

“It was the worst possible outcome, feared by market participants and European policy-makers alike. Italy is facing Greek-style political gridlock and possibly new elections,” Tobias Blattner said at Daiwa Capital Markets.[1] The Wall Street Journal observed at the time, “Italy’s growth prospects are tepid at best, and the election result demonstrates in spades that its fractious politics has not been masters.”[2] Generally speaking, the parties protesting the fiscal reforms demanded by the E.U. did well, suggesting that Italy could find itself at odds with the federal government in how to resolve the state’s debt crisis.

Italy’s bench market index, the FTSE MIB, traded down 4.62 percent on February 26^th and the euro sank close to a seven-week low against the dollar, trading at $1.31. Yields on 10-year Italian bonds jumped 0.45 percentage point to 4.81 percent. Bonds of Spain, Portugal and Greece were hit too. In America, the Dow fell nearly 300 points on February 25^th, the market’s worst day in almost four months. Markets in the E.U. were down around 2 percent, but futures indexes there and in the U.S. were up the following day.[3]

The optimistic showing of the futures indexes on the day after the election hints that the market on both sides of the Atlantic over-reacted to the anticipated gridlock and possible new election. To an extent, the results are within the range of what can be expected from a multi-party system of parliamentary democracy. Indeed, the states of Britain and Germany had had to form coalition governments just a few years before, and even the problematic Greek elections ended with a government. In fact, that government ended up ratifying the additional austerity.

Moreover, the immediate reaction of the markets seems antiquated to me in the sense that market participants had not adjusted their mindsets to the contemporary European context. In particular, the participants treated Italy as though it were a sovereign state, rather than a state in the E.U. There being a federal level mitigates the importance of state elections even though the states hold more power in the E.U. than the American states hold in the United States. Put another way, the E.U. would surely pressure Italian officials to end the gridlock. Even if the resulting state government were antagonistic to the austerity approach, negotiations would doubtless occur between the state and federal levels. The result would not be as stark or extreme as perhaps market participants presumed in their immediate reactions to the news.

Moreover, such overreactions to political instability may also be due to a projection of relative business certainty onto political turf, which is inherently uncertain even though engrained institutions and constitutions can buffer the turbulence as political dynamics naturally shift and even erupt. Business analysts and investors used to being able to hedge financial and market risk inhabit the business world, which generally does not produce such instability as does the world of politics. In other words, a legislature is generally more rambunctious than is a corporate board meeting. Uncertainty is even in just looking at that other world, as it is so different. This uncertainty, plus novice judgement in political affairs, can explain why political risk analysis may overstate political uncertainty even though it is more than business uncertainty.

1. Charles Forelle, “Italian Election Outcome Sparks Selloff,” The Wall Street Journal, February 26, 2013.

2. Ibid.

3. Alessandra Galloni and Giada Zampano, “Messy Italian Election Shakes World Markets,” Febraury 26, 2013; Katy Barnato, “US Stock Futures Rebound; Italy, Bernanke in Focus,” cnbc.com, February 26, 2013.

American Federalism: Christianity as the Official Religion in North Carolina

“Congress shall make no law respecting an establishment of religion, or preventing the free exercise thereof.” Congress. The writers of the First Amendment of the U.S. federal Constitution were obviously excluding the state governments. Even so, the U.S. Supreme Court has established that the amendment applies to the states as well as Congress. From Lemon v. Kurtzman (1971), the Court gave us what is known as the Lemon test. State funding for parochial schools (e.g., Catholic schools) must have a secular legislative purpose (e.g., education), neither advance nor inhibit religion in its consequences, and not foster “an excessive government entanglement with religion.” Yet the leap in claiming that the amendment bears on the states must deal with the explicit language that “Congress shall make no law.” Even so, it did not seem constitutional to many people in 1913 when the North Carolina legislature tried to make Christianity the republic's official religion. Even so, because the United States is essentially a federal empire of fifty republics, care ought to be taken when applying a one-size-fits-all approach as it does not take into account interstate political, religious, and cultural differences. Much is made of these in the European Union, but not in the United States.  
When the 13 original American states that formed the United States had been colonies, Calvinism was the “state religion” in all of the New England Confederation, which excluded Rhode Island on account of its freedom of religion. Pennsylvania was known as the Quaker experiment. Maryland was heavily Catholic. Virginia was Anglican. New Jersey split in two for a few decades in the late seventeenth century, with the Calvinists taking East New Jersey and the Quakers taking West New Jersey. Even by the time the U.S. Constitution was being considered, the notion of a state religion in a particular state would have been familiar to most Americans. The U.S. Supreme Court’s precedent seems artificial in comparison.
Even so, the North Carolina General Assembly would have gone too far had it passed the bill in 2013 stating in part that the North Carolina General Assembly “does not recognize federal court rulings which prohibit and otherwise regulate the State of North Carolina, its public schools or any political subdivisions.”[1] The bill also states that the U.S. Constitution does not prohibit states from making laws respecting an establishment of religion. While this assertion is probably correct in theory, the precedent set down by the U.S. Supreme Court makes the prohibition the law of the land. Refusing to recognize the U.S. Supreme Court as bearing on the states harkens back to the Nullification Crisis centered on South Carolina. President Andrew Jackson pointed out in 1831 that the Union would not long last if the states could decide for themselves whether they would be bound by federal law.

Rep. Carl Ford of the NC Assembly. He proposed the bill that would have sidelined the U.S. Supreme Court and paved the way for Christianity as the state's official religion. 

The challenge is to get back to the wording, “Congress shall make no law,” without throwing out the U.S. Supreme Court. Proposing state laws, whether on religion or abortion, that are obviously unconstitutional under the Court’s rulings makes a state body look foolish. Rather than having selective amnesia, state representatives could seek to reverse the Court’s precedent either through the consent power of U.S. senators or by proposing a federal constitutional amendment. The first route may require state governments to have greater sway over the senators. Originally, they were to represent their respective states by representing the governments.
In terms of an official religion at the state level, Utah would obviously be Morman, but not every state has such a concentration of one particular denomination. Nor is religion itself equally strong in every state. Not every state would want to institute an official religion. All of this suggests that the United States would be a richer quilt to the extent that states can differ on religion as a phenomenon and with respect to the particular religions. Put another way, the U.S., being imperial in scale, is innately more diverse than can be seen by the extent of one-size-fits-all Congressional action. Allowing the states to fulfill their particularities more fully would make the U.S. itself a richer tapestry and thus a strong union.
If some of the American republics in the U.S. were to have established state religions, a person in the minority in one of those states might feel more like an outsider in one’s own town. Being a non-Mormon in Utah would be even harder were Mormonism the official state religion.  However, is it not already awkward for atheists in the small towns of several states, such as Alabama and Mississippi? Is there really so much difference between an overwhelmingly Christian population and making Christianity the official state religion? It would not be as though the heretics could legally be burned alive. To counter any unfairness more generally, equal protection under the law and due process could be used in a non-Christian’s defense.  
I would even say that it should not be the case that the typical American feels equally at home in every state, for that would mean that the one-size-fits-all approach of Congress has effectively homogenized an empire that is inherently diverse.[2] In terms of historical political theory, an empire is “different in kind” (i.e., qualitatively) than the kingdom-level on the next scale down. It is not only that an empire is larger than a kingdom (i.e., quantitatively). Whereas a kingdom is only large enough that it may or may not be diverse within, an empire by definition consists of kingdom-level polities and is thus inherently diverse because kingdoms are different. From the beginning, the American colonies/states were mapped on the scale of the then-extant early-modern kingdoms in Europe. The European countries and American republics generally are comparable. France is a bit smaller than Texas, Germany is roughly the size of Montana, Spain matches Arizona and Italy is the size of California. Among the respective smaller states, Malta, Luxemburg, and Cyprus cluster with Rhode Island, Delaware, and New Jersey. Belgium and Maryland are both mid-sized states in their respective unions. To compare the U.S. and France or the E.U. and Texas thus evinces a category mistake. Flawed conclusions should be expected.
The United States altogether thus form an empire, which is composed of kingdom-level polities/cultures/territories.[3] We should not be surprised to find that the culture in Texas differs from that of Massachusetts, for example. One of the benefits of living in the U.S. is that one can live in a republic that fits one’s ideology or lifestyle. For example, a gay person can move to a culture such as Massachusetts or California in which greater acceptance exists. People in the majority cultures in Oklahoma and Arkansas would not have to be pushed into changing their respective cultures into accepting homosexuality, though the marriages made in the other states would have to be recognized due to the full faith and credit clause of the U.S. Constitution.  A fuller happiness for both gays and traditionalists/Biblicalists would result if each can find a fitting environment than would be the case were Congress to pass an empire-wide one-size-fits-all “solution.”  Were it made under one giant compromise, U.S.-wide, it is likely that the result is not a fit for any American. Moreover, to suppose that every state should be virtually the same just because the U.S. is recognized as “a” country ignores the intrinsic diversity that exists within an empire-scale complex-polity. Even the poll finding that roughly a third of Americans want Christianity to be the official religion in their own state cannot be generalized using a broad brush across the United States. I suspect that a much higher percentage of Arkansans than New Yorkers or Californians want Christianity to be their official religion.
In short, the establishment of state religions in some of the states even as strong majorities in other states prefer their respective cultures (and governments) to remain primarily secular would provide a closer fit for not only the people involved, but also the diversity that exists anyway within an empire that is composed of kingdoms and/or republics. To treat an empire as though it were synonymous with one of its republics or kingdoms evinces a category mistake. The benefits of diversity that can be enjoyed within an empire are threatened when Congress makes the mistake by acting like a state legislature. Put another way, the United States would be stronger were the strictures relaxed such that they could more fully manifest their uniqueness. Seeing a strip-mall with a McDonalds restaurant in every town from coast to coast is appreciably more bland. “Sameness” multiplied across a continent is not only tiring; it fails to take advantage of the inherent diversity that springs from distance and more than one government. One need only look at the E.U. states to get a sense of how little distance is necessary for culture to differ. Even though the North Carolina’s General Assembly was pursuing a foolish strategy in proposing a bill that would have the government ignore the U.S. Supreme Court when convenient, the presumed article of separation between church and state at the state level can and should be re-considered.

1. John Celock, “North Carolina House Speaker Kills Bill to Create State Religion,” The Huffington Post, April 4, 2013. See also Emily Swanson, “Christianity As State Religion Supported By One-Third of Americans, Poll Finds,” The Huffington Post, April 6, 2013.
2. Skip Worden, British Colonies Forge an American Empire. Available at Amazon.
3. Ibid.

The E.U. as Peace-Maker: Bringing in Serbia and Kosovo

Serbia and Kosovo reached an agreement on April 19, 2013 bearing on how much autonomy Kosovo would allow Serb cities in return Serbia’s recognition of Kosovo’s remaining authority in the cities.[1] Kosovo had seceded from Serbia in 2008, and the ensuing conflict kept both states from joining the European Union. As it turned out, the prospect of accession gave both Serbia and Kosovo enough incentive to reach an agreement. Indeed, only a few days after the agreement had been reached, the governments of Serbia and Kosovo approved it. Such swiftness indicates how strong of an incentive accession can be for belligerent republics in Europe. The E.U.’s deployment of this “carrot” is fully in line with the main objective of the European Union: to prevent war in Europe. According to the New York Times, the accord is thus “an important victory” for the E.U.[2] An even further victory in line with the E.U.'s most important purposes would be to internalize both Serbia and Kosovo so any future interstate conflicts could be peacibly resolved. 

In the wake of World War II, the European Coal and Steel Cooperative was formed in order to keep an eye on Germany’s use of iron, should the Germans seek to re-militarize. The EEC was also formed to obviate war in Europe, and the E.U. inherited this central aim. Accordingly, it is fitting and proper that, as Kosovo’s deputy minister of foreign affairs, Petrit Selimi put it, “The incentive of joining the E.U. played a huge role in clinching an agreement.”[3] The E.U. thus played a role in forging greater peace in Europe. In fact, the negotiations took place in Brussels, according to Catherine Ashton, the E.U.’s secretary of state. “It is very important,” she told reporters, “that now what we are seeing is a step away from the past and, for both [Kosovo and Serbia], a step closer to Europe.”[4] Days after the agreement was signed, the European Commission recommended to the European Council  that talks start on Serbia’s accession. Belgrade had “taken very significant steps and sustainable improvement in relations with Kosovo,” the Commission announced. The Commission also noted that as Kosovo had met all its “short-term priorities,” talks toward a Stabilization and Association Agreement, a precursor to Kosovo gaining statehood, should commence.
Bringing both Serbia and Kosovo into the Union would represent a more permanent means of forestalling war in Europe. As this depends too on how much power the E.U. has in reconciling conflicts between the states, giving the federal government sufficient competencies in this regard would also represent a step toward sustained peace in Europe. While the prospect of accession has been shown to be enough of an incentive for a meaningful agreement to be reached, better still is the incorporation of trouble spots into the European Union, where more pressure can be brought to bear on any bellicose states such that any nascent conflicts between them can be peaceably resolved. Indeed, the E.U.’s competency, or enumerated power, to remove state obstacles to a common market is in part geared to forestalling potential conflict between discriminating states. This is also a reason behind the interstate commerce clause in the American system.
Lest a fixation on any of the contemporary crises hitting the E.U. inculcates a pessimism that is destructive to the Union and thus ruinous to its more basic purposes, it should be helpful to keep an eye raised to one of those fundamental aims of the project. Given the two major wars in Europe during the first half of the twentieth century, it is wise to keep perspective regarding the role of the E.U., both directly and indirectly, in obviating war.

1. Dan Bilefsky, “Serbia and Kosovo Reach Agreement on Power-Sharing,” The New York Times, April 20, 2013.
2. Ibid.
3. Vanessa Mock and Gordon Fairclough, “Serbia Ready for EU Accession Talks,” The Wall Street Journal, April 22, 2013.
4. Ibid.

The British Pound Reacts to Secession

When the E.U. state of Britain held a vote in 2016 on whether to secede from the union, the British currency plummeted. On the day of the December 2019 statewide election in the U.K., that currency initially jumped and held on the day after as official results confirmed that the conservatives had won a majority and thus would be able to see the secession through. I submit that uncertainty itself was a major factor in both swings, and that the market put too much emphasis on the matter of uncertainty at the expense of the substantive economic effects of secession.

According to The New York Times, the British pound plummeted after the referendum vote in 2016 due to “agitation over the economic and financial disruption that seemed to lie ahead.”[1] Such disruption would be an interim matter, rather than ongoing, because a new equilibrium would doubtless take hold. The agitation was thus about change, and more specifically about the uncertainty that is in any change. Alternatively, the drop in the currency could have been to analysts having determined that the British economy would not be as strong after the change. In other words, the drop could have been prompted by analyses of the new equilibrium more so than the uncertainty during the change. I submit that such a rationale would have been better, for it would have reflected economic fundamentals rather than merely an aversion to change.

The state’s general election in December 2019 took place after a long period of governmental stalemate on the matter of secession. Prime Minister Boris Johnson had secured an agreement with federal officials on a secession plan, but his own state legislature balked. The achievement of an outright majority in the House of Commons in the election meant that Johnson’s plan could finally be passed. The high probability of secession taking place at the end of the next month (and with a trade deal) removed the uncertainty concerning even whether the state would secede. According to Lee Hardman at MUFG, the election outcome “gives you more clarity over the direction of Brexit.”[2] Clarity, rather than how the state’s economy would be post-secession, involves a decrease of uncertainty.

To be sure, the governmental stalemate and the related uncertainty had been difficult on British businesses. Some even moved their headquarters to other states. That Johnson would be able to push his secession deal through his legislature means that the market could anticipate even less uncertainty. So it makes sense that the decrease in uncertainty would be a factor in the currency markets. Even so, what about how the state’s economy would be like after the transition? That the UK would secede with a deal suggested that the state’s economy would not only suffer less uncertainty, but also be stronger, with continuing trade with the E.U.’s states. How would the UK economy look? This, I submit, is what the currency markets could (and should) have reflected to a significant degree relative to the matter of uncertainty and transition.

---

1. Amie Tsang and Matt Phillips, “Brexit Once Meant a Weaker British Pound, But Not Anymore,” The New York Times, December 12, 2019.

2. Ibid.

Oligarchs in Ukraine Decide the E.U./Russia Question: Big Business on Top of Democracy?

One of the many lessons shimmering in the sunlight from stars such as Gandhi and Mandela is the possibility that popular political protest really can matter after all. Alternatively, managing (or manipulating) the crowd could be a mere front dwarfed in influence by that of a rich and power elite. Although the Ukraine will serve as our case study, democracy itself is under the microscope here.
As 2013 was losing steam and heading into the history books, the people of the independent state of the Ukraine were poised to turn back east or aim toward statehood in the European Union. The matter of who in the republic would decide was at the time obscured by the appearance of power in the pro-Europe protests in the capital city. Peeling off this veneer, the New York Times provides us with a more revealing look.
"Protesters may be occupying government buildings and staging loud rallies calling for the government to step down, but behind the scenes an equally fierce — and perhaps more decisive — tug of war is being waged among a very small and very rich group of oligarchical clans here, some of whom see their future with Europe and others with Russia. That conflict was ignited, along with the street protests, by Mr. Yanukovich’s decision to halt free trade talks with the European Union” in November, 2013.[1] In other words, very wealthy businessmen were very active politically in setting the course of the ship of state.

Petro Poroshenko is a Ukrainian oligarch who sees more money for his conglomerate and himself in greater ties with the E.U. Does it matter what the majority of the Ukrainian people want? NYT

Although blocking government buildings makes excellent news copy, all that visible strife may have been diverting attention from the dark corridors of power in search of a deal that would set a much larger course. To be an independent state between two contending empires is not the safest place to be. If finally moving one way or the other hinges on a certain constellation of wealthy and business interests coalescing enough to pull the strings of state, what the people think really does not matter. As put by the New York Times, “In this battle of the titans, the street becomes a weapon, but only one of many.”[2] Put another way, what the titans do with their arsenals of wealth and power is the decisive point, not what the people in the streets happen to think.
The implications for representative democracy are stunning, if not dire, and for the illusion, utterly deflating. Does not adulthood involve the recognition that something taken hitherto as real is in actuality an illusion? Perhaps it is high time that Toto pull the curtain open to reveal the Wizard as the person pulling the levers for billowing smoke and bursts of flames to divert our attention from his existence, not to mention his manipulation and power.

1.Andrew Kramer, “Behind Scenes, Ukraine’s Rick and Powerful Battle Over the Future,” The New York Times, December 6, 2013

2. Ibid., emphasis added.

Two Sizes Fit All: America’s Two-Party-System Stranglehold

A Rasmussen Reports poll conducted in early August 2011 found that “just 17% of likely U.S. voters think that the federal government . . . has the consent of the governed,” while 69% “believe that the government does not have that consent.”[1] Yet an overwhelming number of Congressional incumbents is reelected. Is it that many Americans stay away from the polls on election day, or does the two-party system essentially force a choice? Voting for a third-party candidate risks the defeat of the candidate of the major party closest to one’s views. Such a vote is typically referred to as a protest or throw-away vote. Is it worth driving to the polls to do that?
A poll of 1,000 Americans conducted by Douglas E. Schoen LLC in April 2011 found that a solid majority of Americans were looking for alternatives to the two-party system. A majority of the respondents (57%) said there is a need for a third party. Nearly one-third of the respondents said that having a third party is very important. In the next month, 52% of respondents in a Gallup poll said there is a need for a third party. For the first time in Gallup’s history, a majority of Republicans said so. These readings point to more than simply a desire to vote against the closest major party without merely being a protest or throw-away vote.
Even as Republican and Democratic candidates were at the time in tune with their respective bases, these two segments of the population were becoming two legs of a three-leg stool, rather than remaining as the two defining pillars holding up the American republics. In fact, with the number of independents growing, the two bases combined no longer made up a majority of the citizens able to vote.
To be sure, the electoral systems of the American states and the federation itself have been rigged against  aspiring third parties. For example, a Green Party presence in the U.S. House of Representatives would require one of that party’s candidates to snag the highest percentage of the vote in one of the 435 legislative districts. Were fifteen percent of Floridians vote for Green Party candidates in every House district, Florida's delegation would still not include any Green Party presence. In terms of the Electoral College, many of the states have a winner-take-all system in selecting electors. Furthermore, a third-party candidate doing well in electoral votes could keep none of the candidates from getting a majority, in which case the U.S. House of Representatives would elect the U.S. President (each state delegation getting one vote). A third party would have to be dominant in that chamber, or at least in a few of the state delegations, to have any impact. The proverbial deck, ladies and gentlemen, is stacked against any third party, so merely getting one started is not apt to eventuate in much of anything, practically speaking. For fundamental reform, one must think (and act) structurally, and Americans are not very good at that, being more issue- and candidate-oriented.

The real elephant in the room is the fact that the two animals are the only ones allowed in the room. Image Source: Wikimedia Commons

If the American political order has indeed been deteriorating and disintegrating, its artificial and self-perpetuating parchment walls might be too rigid to allow the vacuum to be filled by anything less than whatever would naturally fill the power-void in a complete collapse. The two major political parties, jealously guarding their joint structural advantages, have doubtlessly been all too vigilant in buttressing the very walls that keep real reform—real change—from happening at the expense of the vested interests. As a result, the electorate may be convinced that it is not possible to venture outside of the political realities of the two major parties that stultify movement. If a majority of Americans want a third party, they would have to apply popular political pressure to the two major parties themselves to level the playing field. A huge mass of dispersed political energy would be necessary, however, given the tyranny of the status quo. Indeed, such a feat might require going against the natural laws of power in human affairs. If so, the already-hardened arteries will eventually result to the death of the "perpetual union." Sadly, the determinism is utterly contrived rather than set by the fates.

1. Patrick H. Caddell and Douglas E. Schoen, “Expect a Third-Party Candidate in 2012,” Wall Street Journal, August 25, 2011.

Obama and Goldman Sachs: A Quid Pro Quo?

U.S. President Obama nominated Timothy Geithner to be Secretary of the Treasury. While president of the New York Federal Reserve Bank, he had played a key role in forcing AIG to pay Goldman Sachs’ claims dollar for dollar. Put another way, Geithner, as well as Henry Paulson, Goldman’s ex-CEO serving as Secretary of the Treasury as the financial crisis unfolded, stopped AIG from using the leverage in its bankrupt condition to pay claimants much less than full value. At Treasury, Mark Patterson was Geithner’s chief of staff. Patterson had been a lobbyist for Goldman Sachs.
To head the Commodity Futures Trading Commission—the regulatory agency that Born had headed during the previous administration—Obama picked Gary Gensler, a former Goldman Sachs executive who had helped ban the regulation of derivatives in 1999. Born had pushed for the securities to be regulated, only to be bullied by Alan Greenspan (Chairman of the Federal Revere) and Larry Summers, whom Obama would have as his chief economic advisor. To head the SEC, Obama nominated Mary Shapiro, the former CEO of FINRA, the financial industry’s self-regulatory body.
In short, Obama stacked his financial appointees during his first term with people who had played a role in or at least benefitted financially from financial bubble that came crashing down in September 2008.[1] Put another way, Obama selected people who had taken down the barriers to spreading systemic risk to fix the problem. Why would he have done so? Could it have been part of the quid pro quo the president had agreed to when he accepted the $1 million campaign contribution from Goldman Sachs (the largest contribution to Obama in 2007)? Might Goldman’s executives have wanted to hedge their bets in case the Democrat wins. Getting Goldman alums in high positions of government would essentially make the U.S. Government a Wall Street Government—that is, a plutocracy with the outward look of a democracy. It is no accident, we can conclude, that the spiraling economic inequality increased during the Democrat’s first term of office.

1. Inside Job (2010).

Congress: Hitched to the Status Quo

To lead is to be out in front, pointing the jet’s nose one way rather than another. Leadership is not that which causes drag at the back of the plane. Leadership is not that which holds a society in place or protects the vested interests. Whether envisioning something new or a return to a better time, a leader is not oriented to the status quo. It is significant, therefore, that the Minority Leader of the U.S. House of Representatives, one of the two chambers in the American Congress, has stated publicly that the Congress is rigged to advantage the status quo. The stunning implication is that members of Congress are actually anti-leaders.

In an interview in 2013, Nancy Pelosi admitted, “This is an environment that is almost rigged, intentionally or not, wittingly or not, rigged so that the status quo just goes on.”[1] This amazing line can be read as confirmation that the fears of some of the American Founders has come true—namely, that the U.S. House would itself become an aristocratic body rivaling the U.S. Senate. With just 435 representatives for over 310 million people, George Washington’s plea on the last day of the Constitutional Convention that a minimum of 30,000 rather than 20,000 in a district would not be sufficiently democratic sounds trite, even antiquarian. With so few representatives relative to the total population, the U.S. House could not help but be aristocratic, each member being like a magnet to huge “gifts” from vested interests. “We have to kick open the door and make our own environment” in the Congress, Pelosi urged, “reduce the role of money [in campaigns], insist on the civility of debates, and bring more women here, and that’s a better reflection of our country.” In painting this picture for us, the Minority Leader was indeed leading, for she was intrepidly venturing out beyond the status quo. Nevertheless, the thrust of leadership is not always enough to counter the gravity of the vested interests grounded in the status quo.

For example, as long as so few representatives hold such power, the money of the vested interests will inevitably find its way to the campaigns and the Congressional bills will continue to be written by the vested interests themselves. In approaching this problem systemically, more is needed. One possibility is to sift the E.U.’s lower legislative chamber for possible solutions. 

The U.S. House of Representatives (top) and the European Parliament (bottom). 

At the beginning of 2012, European Parliament had a maximum of 751 representatives to cover a population of about 504 million, which works out to an average of 671,105 people in a district. Meanwhile, the U.S. House had 435 representatives to cover a population of about 313 million, which corresponds to an average of 719,540 people in a district. The difference is 48,435 people per district. To get down to 671,105 people per district, the U.S. House would need to add 31 seats. Were the House to have 751 representatives, the average number of people in a district would be 416,777. While more democratic than districts with an average population of 719,540, neither figure comes close to satisfying George Washington’s objection that 30,000 people in a given district is not sufficiently democratic (i.e., too many constituents for a given representative).

Therefore, in addition to increasing the number of seats—with the knowledge that 751 in a chamber can work—further reduction in the centralized power would be needed to reduce the money magnet’s power. One option would be returning more domestic policy areas to the state legislatures. At the time of Pelosi’s statement, the U.S. states had 7,382 state legislators altogether. [2] Spreading around additional powers, taken from the Congress, to so many more representatives would not only make American federalism more democratic, but also open up possibilities for real change beyond the grasp of the status quo. As a few examples even without the additional power, some states had legalized gay marriage, two had legalized pot, and one had achieved universal health-insurance. Admittedly, the status quo has a greater grip in some states (e.g., Kansas) than others (e.g., California). However, spreading out governmental power could perhaps be sufficient to give leadership a chance to outpace the moneyed interests in the status quo.     

1. Laura Bassett, “Nancy Pelosi: Congress Is ‘Rigged’ to Maintain the Status Quo,” The Huffington Post, June 5, 2013.

2. National Conference of State Legislatures, “Sizes of Legislatures,” 2013.