Reich: Our Incredibly Shrinking Democracy

In his latest column for the Huffington Post, Robert Reich declares:

I wish conservatives would stop complaining about big government and start worrying about the real problem — small democracy.

What exactly does Reich mean by "small democracy"?  He explains:

It seems as if more and more decisions that should be made democratically are being shunted off somewhere to a few people who make them in back rooms. Which programs should be cut, which entitlements pared back, and what taxes raised in order to reduce the long-term budget deficit? Hmmm. Let’s convene a commission and have them decide.

Commissions are a default mechanism when politicians want to hand off difficult issues to "experts." But reducing the long-term budget deficit has almost nothing to do with expertise. It’s about our nations’ values and priorities. Nothing could be more central to the democratic process.  (Emphasis added)

Democracy requires at least three things: (1) Important decisions are made in the open. (2) The public and its representatives have an opportunity to debate them, so the decisions can be revised in light of what the public discovers and wants. And (3) those who make the big decisions are accountable to voters.

Reich notes that the problem extends far beyond the proposed independent deficit reduction committee.  We are witnessing an alarming lack of transparency with some of the very largest government programs and initiatives.

Among the most egregious examples Reich lists:

  • TARP –“The notorious Troubled Assets Relief Program (TARP) began with a virtual blank check from Congress. Treasury officials then secretly decided which companies were to receive hundreds of billions of dollars.”
  • The Fed — "The Federal Reserve, meanwhile, has gone far beyond its traditional role of setting short-term interest rates. It has bought up massive amounts of debt — mortgage debt, Treasury bills, and debt instruments emanating several public agencies, many of them supporting a wide range of private entities. No one outside the Fed knows the ultimate beneficiaries of all this government backing, the criteria used by the Fed for making these commitments, or even how much debt the Fed is buying.

Reich’s point is not to debate whether the expanded role of Treasury and the Fed was necessary.  Rather, Reich questions the bizarre cloak of secrecy under which Treasury and the Fed are permitted to spend hundreds of billions of dollars.

Reich appropriately observes:

Even if the economic emergency justified such secrecy — and it’s hard to see exactly why it would — the emergency is over, and yet closed-door decision making continues. Will Treasury use what’s left of TARP to help stimulate more jobs and, if so, how? Will the Fed stop buying mortgage-backed securities? No one knows.

 

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