Liberal Democracy Is Not Too Big to Fail

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Tim Kowal

Tim Kowal is a husband, father, and attorney in Orange County, California, Vice President of the Orange County Federalist Society, commissioner on the OC Human Relations Commission, and Treasurer of Huntington Beach Tomorrow. The views expressed on this blog are his own. You can follow this blog via RSS, Facebook, or Twitter. Email is welcome at timkowal at gmail.com.

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39 Responses

  1. Avatar Roger
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    says:

    Great post, Tim

    The below Mercatus study estimates that over regulation, free riding and rent seeking has an annual cost anywhere from seven to twenty two percent of GNP. This amounts to trillions of dollars of lost prosperity, and doesn’t even include the greater impacts of lower growth and innovation over time.

    http://mercatus.org/sites/default/files/The-Pathology-of-Privilege-Final_2.pdfReport

  2. Avatar Jaybird
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    says:

    Excellent post, Tim. One of the things that bugs me more and more and more is the sheer number of agencies such as the Consumer Financial Protection Bureau that have nothing to do with who gets elected and will not change no matter what happens in the Congress, Senate, or White House.

    There is literally nothing The People can do if they want to get rid of the Consumer Financial Protection Bureau. Nothing.

    (And if you, dear reader, don’t like the example of the Consumer Financial Protection Bureau, please feel free to swap it out with another Bureau. I think you’ll find that the sheer number of Bureaus you can swap in there without changing the truth value of the sentence is dismaying.)Report

    • Avatar Fnord in reply to Jaybird
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      says:

      Let’s not go overboard here.

      If The People actually (near-)universally hated a hypothetical Bureau That People Hate, and removing it was their primary priority at the polls, it wouldn’t last long. Politicians could and would score political points by getting rid of it. And if they wouldn’t, other people would run against them with “Abolish the BTPH” as their platform. To assert that every politician in the country would act against the will of their voters is conspiracy theory.

      Controversial and unpopular bits of bureaucracy persist because:
      1) The People don’t actually care that much. Sure, ask people straight up what they think about taxi protectionism, and they might not like it. But that’s not the issue that decides their vote or gets them to donate money.
      2) Not everyone hates them, and those who don’t are often more committed than those who do. Existing medallion holders are very much in favor of taxi protectionism. You put a disclaimer allowing people to pick whatever bureau they personally dislike. Sure, everyone has a bureau they personally dislike, but if there really was a bureau that The People as a whole disliked, it wouldn’t need a disclaimer at all.Report

      • Avatar Roger in reply to Fnord
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        says:

        The point is that when benefits are concentrated and costs are diffuse or opaque or transferred to non voters (future generations), then democracies accumulate rent seekers and bureaucracies like dogs attract fleas. It doesn’t take a conspiracy, just rationality on the part of all parties. We all cheat to get our concentrated gains, and all lose overall.Report

      • Avatar James Hanley in reply to Fnord
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        says:

        Controversial and unpopular bits of bureaucracy persist because… Not everyone hates them, and those who don’t are often more committed than those who do. Existing medallion holders are very much in favor of taxi protectionism.

        But that’s pretty much the problem we’re complaining about. It doesn’t ameliorate the problem, because it is the problem. (Or at least one of them.)Report

        • Avatar Fnord in reply to James Hanley
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          says:

          That’s a different problem than Jaybird was complaining about. Elected officials are just as susceptible to capture as bureaucrats, which is how these stupid laws get passed in the first place.Report

          • Avatar James Hanley in reply to Fnord
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            says:

            OK, but I’m not sure Jaybird really has argued differently. Ever.Report

            • Avatar Fnord in reply to James Hanley
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              says:

              I’m not sure Jaybird is arguing about regulatory capture at all. But he does seem to take issue with bureaucrats specifically as somehow a bigger problem than elected officials.Report

              • Avatar Jaybird in reply to Fnord
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                says:

                Let’s say that I wanted (elected official) to be replaced. What would I need to do?

                I’m sure we could come up with a list of things. Some of them might even work!

                Let’s say that I wanted the undersecretary to the assistant executive director’s assistant manager to be replaced.

                What would I need to do? Write a letter?Report

              • Avatar Fnord in reply to Jaybird
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                says:

                The important part (and the hard part), in either case, is convincing a bunch of other people to agree with you. You, all by yourself, are not The People, and you’re not going to get rid of anyone, directly elected or not.

                I’m not saying that bureaucrats aren’t somewhat more insulated from the democratic process than elected officials. But “literally nothing The People can do” is a gross overstatement. It’s hardly unheard of for an unelected bureaucrat to be fired or asked to resign over negative public attention.

                Nor am I convinced that such insulation is always and everywhere a bad thing, compared to the alternatives. Did you have a specific undersecretary to the assistant executive director’s assistant manager in mind? Overly broad election of officers has practical problems for the same reason direct democracy on the issues does. Everyone following this discussion is a veritable political junkie by the standards of an average voter, but even for us, it’s simply not practical to know how a specific undersecretary to the assistant executive director’s assistant manager is doing, much less how all of them are doing.Report

      • Avatar Jaybird in reply to Fnord
        Ignored
        says:

        Here’s a fun question: how many bureaus are there that 99% of The People have never heard of?

        Let’s go to 98% and see what happens to that number… does it double? Triple?

        96%?

        We have so many parts and pieces of our government that are opaque to the governed that many of them (24 out of 25) have no idea that there actually is a Bureau of Policy, Planning, and Resources for Public Diplomacy and Public Affairs… let alone know what it does (“um… it plans public diplomacy?”).

        To point out that if the people really didn’t like it, it’d go away feels disingenuous when they were never given a voice in its creation before it was hidden (granted in plain sight) in the maze that is the Halls of Power.Report

        • Avatar Fnord in reply to Jaybird
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          says:

          How many close presidential advisers do 96% of the public know nothing about? Cabinet secretaries, even? Obviously that’s something that will change depending on who’s elected president. Hell, even among people they vote for directly, how many people know the name of their representative in their city council or state assembly?

          I get that voter ignorance is a problem. But I don’t get how voter ignorance about unelected bureaucrats is somehow worse than voter ignorance about people they actually vote for.Report

          • Avatar Roger in reply to Fnord
            Ignored
            says:

            Odd argument. We are saying that it is rational for voters to be unaware of and or unconcerned with rent seekers and that it is rational for the rent seekers and politicians and bureaucrats to respond to the concentrated benefits by extending them and you argue that it is also rational for voters to be unaware of their politicians. My only response is ….exactly.Report

            • Avatar Fnord in reply to Roger
              Ignored
              says:

              What I object to is singling out bureaucrats as particularly problematic, and the claim that the reason they’re particularly problematic is that they’re insulated from the will of The People.

              Bureaucracies don’t have a diffuse costs/concentrated benefits problem because they’re insulated from democratic forces. Indeed, it’s been a recurring theme of this symposium that the opposite is true: diffuse costs/concentrated benefits problems arise because of democracy.Report

          • Avatar Jaybird in reply to Fnord
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            says:

            I don’t get how voter ignorance about unelected bureaucrats is somehow worse than voter ignorance about people they actually vote for.

            You can fix voter ignorance with information, to some degree.Report

          • Avatar wardsmith in reply to Fnord
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            says:

            Fnord, we have a cabinet but what happens when they don’t have meetings? Of course I don’t blame him for not interrupting his golf and campaigning schedule to meet with his staff. I mean its not like there’s any problem with the economy, with Europe, the Middle East, joblessness, education, energy, everything is obviously just hunky dory. Luckily he’s a professional politician and not some amateur. 😉Report

            • Avatar James Hanley in reply to wardsmith
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              says:

              For the record, there’s absolutely no point in the Prez having cabinet meetings. The agencies’ jurisdictions are too divergent for it to make any sense.

              “Today we’re going to discuss Iran, make sure the Secretaries of Education and Interior are there!” (Hell, they’re not even cleared for the info that might be discussed in that meeting.)

              “Today we’re going to discuss grazing permits on BLM land; I want the SecDef to weigh in on this.” (Like he’s got nothing more pressing on his plate.)

              Nah, no president regularly holds cabinet meetings. Carter, in his blessed ignorance, gave it a whirl and quickly gave it up as a bad job. When they’re held, it’s basically just a photo op.Report

      • Avatar Tim Kowal in reply to Fnord
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        says:

        It’s hard to find an agency, even among the thousands in the federal bureaucracy, that doesn’t have an objective that most Americans don’t basically agree with. The EPA is a terrible agency in practice, but no one objects to its stated objectives. The problem is the lack of any democratic oversight in what these agencies actually do.Report

        • Avatar Jaybird in reply to Tim Kowal
          Ignored
          says:

          Perhaps the TSA is a good thing, then.

          I mean, *EVERYBODY* agrees that we need to be safe when we fly. It’s just that nobody thinks that that means that Gramma gets to 2nd base for the first time since Grampa died.

          That we like to think about, anyway.

          It’s when it dawns on you that the FDA keeps food and drugs safe the same way that the TSA keeps people safe when they fly, that’s the moment that you might be able to plant some seeds.Report

          • Avatar Tim Kowal in reply to Jaybird
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            says:

            This is where, if I had the time, I’d write a follow up and really dig into this great “liberal democracy” issue along these lines: Let’s stipulate the TSA, for instance, is a good thing. But let’s also stipulate that it, like every just about every other agency in our “fourth branch” of government, is unacceptably unaccountable to democratic checks. So what’s the fix? Perhaps we hold elections for the secretaries of each agency, as well as the key rule makers. They are essentially mini-executives and mini-legislatures, after all. Let’s just assume one executive and one legislative democratically elected official for each agency. There are roughly 500 federal agencies. http://www.lib.lsu.edu/gov/faq.html. This means 1,000 new federally elected officials.

            What kind of burden does this put on the democratic process? How do we possibly vet all these people? And are we going to be much better at overseeing them than Congress or the President?

            But if the answer is no, then doesn’t that mean we’re rejecting democracy? It’s too hard, we complain, to discharge the civic duty to oversee such large and numerous democratic institutions. Better, we conclude, that they be undemocratic. If that’s so, then what are we still holding onto the fiction of democracy for? Indeed, we complain that the part of our government we still have to elect — Congress — is dysfunctionally gridlocked and can’t effectively govern. Notably, we don’t have this complaint about agencies — because they aren’t democratic! How many people who make this complaint even know the name of their own congressperson? Would they even care if he were appointed rather than elected?

            This is the truly sad part about this line of thinking. If we really wanted to be principled about it, we’d find a way to bring these necessary agencies into compliance with democratic ideals. But people can only take so much democracy. The reason we have all these agencies in the first place is because we’re lazy and want someone else, the government, to do many of the things agencies do. This reality betrays the conclusion that these agencies couldn’t be what they are if they aligned with democratic principles.Report

  3. Avatar James Hanley
    Ignored
    says:

    Already well into a distinguished career, the good professor had finally stumbled onto the basic truth that other Americans, unbedecked by college degrees, have always known.

    Well, that kind of thing is likely to happen when you get a law degree. 😉

    More seriously, though, good post. There are parts I could quibble with, but I’d rather emphasize my agreement with the problem of making policy our primary goal, to the point where we don’t see the Constitution as having any meaning outside of whether it helps us attain that policy or not.

    Why should the 14th Amendment’s equal protection clause be sacred if neither the commerce clause nor the 5th Amendment’s takings clause are?Report

  4. Nob Akimoto Nob Akimoto
    Ignored
    says:

    The financial industry is so enmeshed in every facet of our economy that literally no one had any good idea what would happen if one or more major firms defaulted.

    I’m going to pick on this a little because I find it emblematic of the entire post. We do in fact know precisely what happens when a major firm defaults and dies. The Lehman Brothers failure was in fact the domino that tipped the balance into a major recession and scared the bejesus out of the credit markets.

    And this goes into a deeper problem with the post in general. It’s not that policy is superceding the constitution as claimed, but rather that regulatory state apparatus are a response to problems and not something that exist in a vacuum to evilly destroy economic liberty.Report

    • Avatar Roger in reply to Nob Akimoto
      Ignored
      says:

      I am sure taxi medallions, ethanol subsidies, import tariffs, football stadium subsidies, birth control coverage requirements, barriers to entry for hairstylists, and so on are a response to some kind of problem. They destroy economic liberty and prosperity just the same. Even worse, they create problems which new regulations are then introduced to fix. The whole thing spins out of control and the growth rate of the economy is choked. A trillion dollars lost here and a trillion lost there…Report

    • Avatar Tim Kowal in reply to Nob Akimoto
      Ignored
      says:

      Nob,

      Sure it is. But note that i don’t presume we had a free market until the New Deal came along, or anything like that. The free market is a fiction on the order of the state of nature. We always had government involvement. The apparatus that created the banks and financial stem that the right wants left alone is part of the same economic planning regime as the regulatory state. My argument is not simply “get the government out.” It is, if the government is going to be in, we need to revisit the rules by which it is going to do so.Report

      • Avatar Liberty60 in reply to Tim Kowal
        Ignored
        says:

        Of all the ills that are mentioned here- overregulation, rentseeking, and cronyism; which ones would be solved by voting in a solid conservative majority government? Or a libertarian one?Report

        • Avatar Mad Rocket Scientist in reply to Liberty60
          Ignored
          says:

          Conservatives – None
          Libertarians – A lot of them. Problem is finding enough libertarians willing to run for office to constitute a majority.Report

          • Avatar Tim Kowal in reply to Mad Rocket Scientist
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            says:

            When you say “conservatives,” I think you are referring to “Republicans.” In the realm of economic liberty, there’s typically very little daylight between conservative and libertarian principles.Report

            • Avatar BlaiseP in reply to Tim Kowal
              Ignored
              says:

              Well, the Libertarians at least understand the pernicious effects of corporatism on democracy. I see none of that from either Conservatives or Republicans.Report

              • Avatar Tim Kowal in reply to BlaiseP
                Ignored
                says:

                Blaise — Is that a descriptive or definitional statement? I mean, do libertarians just happen to understand those effects and conservatives just happen to not? Or is there something about libertarianism and conservatism such that the former understands and accounts for those effects and the latter doesn’t?

                I haven’t really thought about it that way, myself. But I happen to be a conservative and I am sensitive to the effects, sometimes pernicious, of corporatism. The OP lightly touches on this, and I’ll be discussing it at greater length in a long piece I’ve been working on for some time.Report

              • Avatar BlaiseP in reply to Tim Kowal
                Ignored
                says:

                As I’ve said before, in the abstract, Liberal and Conservative are nouns. In the real world, they’re demoted to adjectives. I chose the weasel phrase “I see none of that” for a reason: Conservatives are far too cuddlesome with manifestly undemocratic elements of American society. It’s a romance honest conservatives will come to regret in time.

                Libertarians are unique in their hatred of corrupted government. When I first came here, I really didn’t understand them very well and they were good enough to correct me. Conservatives hate corrupted government, too. They sorta look at it through the lenses of patronage politics, politics gone amok, Huey Long, that sort of thing. Liberals hate corrupted government, too, but we Liberals understand it from the perspective of how the poor are trampled underfoot as Corporatism corrupts the political process.

                It’s a huge blind spot in the Conservative field of view, one which only the Libertarians seem to grasp correctly: that government power and corporate power are usually the same thing and strive to the same ends, to bend society to their own ends. Wars of all sorts, the abominably Byzantine tax code, the furtive assignations with the well-connected over expensive dinners, the gradual erosion of civil liberties and the ever-expanding role of government in our lives, this is Libertarian gospel, to which the Conservatives have only paid lip service. We see what Conservatives actually do once in power: they are even worse than Liberals in their arrogation of state power to themselves.Report

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