Saturday, October 11, 2008

Some Legal Commentary on the Bailout

I wish The Financial Crisis from the Viewpoint of a Constitutional Scholar: How Today's Debacle Recalls James Madison's Nightmare at the Founding that None Would Have the Virtue to Lead had more legal commentary to rank with its political commentary, but I think the following are some good points to ponder:
"To begin, I believe that the national frustration right now is due in no small part to the fact that the federal players are playing ill-fitting roles. The presidency was designed for emergencies. The Framers chose one person to run the executive branch because they knew there would be disasters, wars, and foreign dealings that would need quick, univocal action - the kind a legislature could never provide.

Accordingly, if this is an emergency - if we face nearly certain financial failure -- the Framers' teachings and the structure they created counsel that it should be the President's job. President Bush should have been moving, through his Cabinet and especially the Treasury, to take decisive action."


A president exists just for such emergencies; but the actions he (or she) takes can later be modified by congressional action. In other words, this was never an either-or situation. The President could have acted to shore up the credit crisis. Then, Congress could have -- after deliberation and consideration -- modified, reversed, or entrenched the President's actions.


Because the President (and his advisors) did not exercise executive power decisively, Congress rushed in to fill the void. The way the members of Congress tell it, they were invited in. Perhaps, but it's certain that they wasted no time setting up the first press conference to announce that they would be taking over the situation.

The difficulty here, though, is that Congress was constructed to be a lumbering, slow-moving, deliberative giant, utterly incapable of acting as a single individual can. It is not just a truism that what Congress generates is sausage, not beauty. In haste, Congress was incapable of producing a plan to tackle this very difficult situation that could generate enough confidence in either the American people or its own members.

Neither Senator McCain nor Senator Obama, nor the House leadership was capable of delivering. Predictably - but perhaps most disappointingly, because of her preeminent leadership role -- House Speaker Nancy Pelosi acted out of the self-interest that James Madison and the Framers feared would be the death of the representative scheme they designed: She took the floor on Monday to issue a political screed against the Bush Administration, rather than pointing toward the larger good she and her fellow Representatives were elected to serve.
Now, I missed exactly what Pelosi had to say on that fateful day, but I got to agree with Barney Frank: if that speech hurt Republican feelings then they are too tender-hearted to put national interests ahead of national interests.

Too little Madison and too bad for it, for there is some interesting points about our governmental structure not really being up to this problem.

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