Celebrity Culture

The endless blare of the reality show of politics turns our leaders into mere celebrities. As such, their heads appear to swell to the size of a Stalin, Hitler, Mao, a Kim, Castro, or Hugo Chavez.

Management is essentially paternalist. It is stewardship. In theory it is best accomplished by trustworthy functionaries with no personal agenda. Personality, style, and delivery have little to do with good governance, only with appearance to the public and thus the public’s confidence. We rely on political parties to distinguish the real mensches from the jerks. But how trustworthy are these people? How knowledgeable? Who will Dear Leader delegate to? How trustworthy or knowledgeable are they? Today these individuals all seem to be cogs in a big machine in which no one is ever held accountable for their failures.

Caligula thought his horse was so beautiful, it should be ruler. We seem to pick our political leaders the same way. When Jacques Barzun wrote “From Dawn to Decadence,” he wasn’t kidding about our decadence.

Government has certain responsibilities. It is supposed to administer justice and enforce market integrity. It can’t prevent all evil, but it can punish proven instances of it. Government is supposed to try to maintain competitive market conditions. It is supposed to assist caveat emptor. To this end there are rules of full disclosure to try to counteract deceit, of full and fair disclosure of all material facts, of avoidance of conflicts of interest, bargaining at arm’s length, and the like. But law can’t do everything. It can’t prevent all lemmings from herding off the cliff or following a Pied Piper or bubbles from forming.

The government does not “run the economy.” Nor does the Fed. Congress inevitably affects the economy in the laws that it writes, but it is not supposed to rig or interfere with private choices of capitalist markets. Subsidies should be limited and temporary. Subsidy creates dependency and distorts markets. Good management can sometimes correct for the agency problem of economics in big organizations. But delegation of responsibility cannot go on forever without damaging accountability. Job tenure for life is only sometimes an optimal arrangement; in some contexts it breeds negligence, sloth, and system failure.

The Fed is a macroeconomics research institution, a kind of think tank. It is supposed to be apolitical. In the end all it does is expand or contract money supply. It does not “run the US economy,” as too many journalists and politicians seem to think. Fairness is an attribute of law, not of economics. Economic fairness is a matter of individual consent among market actors. If you write loads of law and constantly swap out the rules of the game, it raises the costs of doing business, favoring big, established businesses and disfavoring competitive upstarts. This is the opposite of fairness.

Our leaders accept ever less responsibility for anything. They are mere figureheads. Electing a new one every 2-4-6-8 years seems to change little.

Government privatized its national insurance monopoly in 1968. LBJ wanted the GSEs off the government’s books when paying for Vietnam and the Great Society. Back then, they seemed like liabilities. In doing this, the government ignored the basics. It abdicated a lucrative monopoly mortgage packaging operation to Wall St. It might have been fine had the GSEs’ rules stayed in place. Instead, Democrats pressured private banks to lend to deadbeats. “We gave you this rich cash cow, so now you pay us back in this form.” They set switches in reverse, bargaining with Wall St. when they had no business doing that. This made the financial crisis inevitable. It was predictable and preventable, but no one took responsibility for the big picture. Handing a government monopoly to a set of oligarchs is a cartel, not market competition. Sure, it can work, but it needs to obey a few rules.

So government was to blame for the 2008 financial crisis. We know how to avert fraud and they should have attended to it, but didn’t. In a 40 year long screw-up, no one person can be legally blamed. Pinning that degree of mens rea down is hard.

Presidents are hamstrung from doing any real management. They thus can’t act as a true executive. This grinds checks and balances to a halt.

The government is too large and too unaccountable. It is incompetent and ill managed. Too many laws create regulatory tangles and economic gridlock. Marketing dominates politics at the expense of substance. Increasingly, there is rising contempt for law itself.  Hired gun sophists take dog eat dog adversarialism to extremes and argue over nonsense if it might pay. Extremes exist on both right and left.

The only cure for nonsensical hyper-regulation is to ignore it.

We have an epidemic of bureaucrats who Peter Principle to the level of their incompetence. The role of the law in manipulating economic effects is supposed to be secondary to the national good. But the “sophisticated” social science trend of the day is to view the effect of law on economics with glee as a means of making money for oneself.

The Constitution envisioned a separation of powers in a division of labor—distinct governmental corporate functions “checking and balancing” each other. The size of government breeds hyper-specialization and stovepiping, and deters management. No one is able to see the forest for the trees, nor has any one person the power to change the course of government, even if they do. Government actors are unaccountable for bad performance. Leaders over-promise to get elected, then over-legislate in office, just to pretend to the electorate that they’re working “for them.” This leads to ever more socialism from which only the corporate and political class benefit. Loads of bad law then breeds disrespect for all law, leading to a decline in morals. People become accustomed to evading law, and soon that includes the important laws, as well as the folderol. Meanwhile the courts are underfunded because Congress is focused only on fads d’jour. Justice is increasingly unavailable to anyone who is not rich.

It is not a happy state of affairs.

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