There is a general flush of optimism immediately after a Presidential election by the winners and their backers that is often shared by millions of voters. A new occupant in the White House intensifies these higher expectations. This invites new myths. Myth number one is that the new President can do much about the economy. First, our economy is overwhelmingly a private sector one whose performance shapes the quality and quantity of business activity. Yet, all the public pressure and responsibility is on the President who doesn’t have much to work with these days.
The federal government has tried to stimulate the economy in the past by spending, taxing and monetary policies. With a 400 billion dollar a year deficit, there is not much more spending that can be incurred, though its content can change (as from defense over to public works). With politicians falling over one another to take the oath of no new taxes, the public mood is more for spending cuts than tax increases, except around the margins.
Monetary policy is conducted by the secretive Federal Reserve which has driven interest rates to their lowest level in three decades. They cannot go down much farther and millions of small savers are becoming very upset at how little’income their savings deposits are providing them.
What is most startling is that with record spending deficits priming the pump, so to speak, and with very accommodating interest rates, the economy is still in the doldrums. Even the lowest corporate tax rates in nearly half a century do not seem to be helping.
There has been plenty of investment in the past twelve years by the private sector, but much of it has not been productive. For example, about one trillion dollars were invested in mergers, acquisitions and leveraged buyouts. These deals, for the most part, created no new wealth, no new jobs and in more than a few cases brought down what were quite healthy companies with the deal’s overloaded debt.
So unless there is less self-dealing greed and more productive, managerial improvement in the private sector to meet important market needs, rather than to seek government bailouts and other forms of corporate welfare, the new President will bear the onus for economic decline.
Another myth is that a new Congress, with possibly 150 new members, will surely perform more in the public interest. Its first test is whether the members will vote down yet another pay increase that they otherwise would receive in January.
Recovering the moral authority to govern means, in no small part, shedding the perks, privileges, immunities from federal laws and the giant 1989-1990 White House, Congressional Pay Grab.
Other obstacles to a truly new Congress remain. Newly elected members may want to change Congress but very soon after they get there, they learn the meaning of former House Speaker Sam Rayburn’s dicta: “You get along by going along.” Congressional newcomers learn to fear their Committee Chairpersons more than the wrath of the voters who sent them there. If they want a certain bill to move, a certain Subcommittee post, certain staff support or the help of a veteran member to raise funds for their next election, they obey Rayburn’s advice.
What is most neglected by politicians of different stripes is the need to strengthen our democracy at the roots. Much of our public problems, abuses and scandals come from too much power and money in too few hands. Every decade the people lose more control over their government and big business. Power becomes ever more concentrated and that spells trouble for justice and, of course, democracy.
People affect their political economy as voters, taxpayers, consumers, workers and shareholders. The tools that they have available for these tasks are not up to date and not attuned to the modern maneuvers of the power brokers.
For example, special interest, money in politics serves to nullify or undermine the voters’ message. People together own the great public lands, the $3 trillion in pension monies, the public air waves, company shares, and other giant assets. Yet they control very little of the wealth they own. Those who do control these assets are not only unaccountable to the owners but often use them against the interests and rights of the owners.
A new tool box for a strengthened democracy is needed. For a copy of such reforms, send a self-addressed, stamped envelope to “The Concord Principles”, P. 0. Box 19312, Washington, DC 20036.