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The US Bailout’s Undersized Oversight

The major political news in the US from last week concerned the coronavirus bailout bill eventually agreed by both parties and submitted for signing by President Donald Trump. One controversial part of the law focusing on helping businesses in distress drew the ire of Democrats, who worried that it could turn out to be Secretary of the Treasury Steven Mnuchin’s “slush fund.” Rather than addressing the needs of an economy in crisis, it would open the door to new forms of corruption and cronyism.


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The Washington Post described it as an “eye-popping $500 billion in corporate aid.” The New York Times, looking beyond the official figure cited in the bill, explained that, through an effect of leverage, the $454 billion left open for discretionary use by the Treasury amounted to “a $4 trillion booster shot for the United States economy.” In effect, the nature of the loan program opens the possibility of leveraging as much as 10 times the amount designated in the bill. That puts a lot of power in the hands of one decision-maker in the executive branch of government.

The Democrats deemed that a bill with
such a large amount earmarked for corporate aid, at a time when the mass of the
population is not only suffering but disoriented by a pandemic, reflected
mistaken priorities. House majority leader Nancy Pelosi said, “Things like a
$500 billion slush fund was really insulting.” 

Pelosi and the Democrats apparently judged that the insult would be palatable if the Republicans agreed to some form of oversight. At the end of the week, CNBC could report the good news: “After criticisms from Democrats, Republicans agreed to add on a congressional oversight committee and Inspector General as added control measures.” The Democrats got not just oversight, but a “congressional oversight committee.”

Here is today’s 3D definition:

Oversight:

The power of noticing what has already happened, which as often as not includes the powerlessness to do anything about it

Contextual Note

Another hyper-literal definition of
oversight might be: the sight
of something that’s already over
and done. In other words, what one has the power to oversee is something that
can’t be changed or called into question. The French have an expression for
that, which long ago entered the English language: fait accompli.

New York’s Democratic Senator Kirsten Gillibrand, speaking to Yahoo Finance, expressed her tepid satisfaction with the compromise: “We have some oversight. It’s not everything I would have wanted, but it’s at least the beginning of oversight.” For her and the rest of the Democrats, the business of rescuing the economy threatened by the novel coronavirus can now officially begin.

But that was before Trump had the bill on his desk for signing on March 27. Using the presidential prerogative of appending a “signing statement” to a bill proposed by Congress, Trump made it clear that oversight, in his eyes, was a relative term. Signing statements allows presidents to append their “interpretation” of the meaning of a law. It turns out that the oversight written into the law may never be allowed to occur. Trump wrote: “I do not understand, and my Administration will not treat, this provision as permitting the [the Inspector General] to issue reports to the Congress without the presidential supervision.”

Pelosi wasn’t about to give up,
though how she expects it to play out is unclear. She insisted that oversight
will happen, whether Trump attempts to block it or not. “Congress will exercise
its oversight — and we will have our panel appointed by the House to, in
real-time, make sure we know where those funds are being expended,” Pelosi
said.

The back and forth between Trump and
Pelosi sounds more like the prelude to a televised wrestling match designed to
build suspense for a dramatic encounter than the politics of a democracy based
on the principle of checks and balances. This may be just another indication
that Washington’s politics and professional wrestling have both become models
of a hyperreal sporting event.

Even if the Democrats manage to snoop
into the affairs of Mnuchin and Trump, it’s far from sure what that might produce.
In theory, oversight permits adjustment when something aberrant takes place. In
a system that thrives on the notion of checks and balances, it represents the
possibility of correcting mistakes as they’re taking place or even, if handled
scrupulously, before they are implemented. But when cleverly managed by those
who have the power of discretionary decision-making, oversight tends to be
little more than the possibility for the overseers to observe actions that have
already produced an effect and report on them after the fact. It opens the door
to government not by the people and their representatives, but by the fait accomplis of the decision-makers
in the executive branch.

Historical Note

Americans have always expressed their
pride in the work of the founding fathers who had the wisdom to draft a
Constitution built on the principle of checks and balances. The interplay
between the legislative, executive and judicial branches defined a federal
government that would respect the dynamics of a complex democracy, with the people
and state governments at the base and a full range of varied interests working
together at the highest level in Washington, DC, to ensure that national
policies reflected the will and of the interests of the people (including slave
owners, of course, but not including slaves, an oversight that was corrected
four score and eight years later with the 13th Amendment).

The founders hadn’t anticipated
either the emergence of two powerful political parties or the lobbyists who so
generously serve the legislators. Neither had they anticipated globalized
industrial capitalism and the financialized economy that emerged and took form
two centuries later. How short-sighted of them! But that hasn’t stopped modern
admirers of the US Constitution from celebrating the document’s infallible
wisdom and assuming that its principles are still scrupulously applied. If the Constitution
says checks and balances exist, then they must exist, if only to validate our
pride in their existence.

To a great extent, and despite the growing influence of parties and lobbies over the past two centuries, the system of checks and balances worked reasonably well for a long time. Lucid observers in recent decades not infected by a commitment to historical ideology have, nevertheless, noticed an accelerating deterioration of the practice of checks and balances in the federal government.

First came the growth of the
military-industrial complex after World War II. This turned the Washington political
machine (with its three branches) into a global PR operation for an imperial
project, conducted in the name of peace and founded on the principle — proven
by the outcome of two world wars — that the US was committed to ending wars
started by Europeans and equipped to carry out the task.

Then came the Ronald Reagan
revolution in the 1980s, which put private financial interest and the profit
motive at the heart of not just the economy’s but also the government’s logic.
The already existing and continually expanding military-industrial complex
provided the infrastructure of defense that supported the armies of
imperialistic-minded businesses, whose operating procedures and ethics were
liberated from the constraint of national laws.

This produced a network of influence
that wasn’t necessarily limited to US firms, but was piloted from Washington
and New York. With that arrangement, the still officially installed checks and
balances in Washington had no effect on the network’s capacity to govern the
world economy. The neoliberal system turned out to be not only the most
effective way of managing the global economy but also of governing people, even
if, in principle, it contradicts the very idea of democracy.

The third major
development was 9/11. Under President George W. Bush, this traumatic event in
2001 conveniently inaugurated a new phase in the concentration of authoritarian
executive control over the nation and the globe. The US dominated the world’s
economy through the combined force of the dollar as the global reserve
currency, its military bases and operations across the face of the planet, its
technological domination based in Silicon Valley (itself an emanation of
defense spending), and the dominant cultural influence that accompanied the
spread of American technological standards.

Over a period of 20 years, three presidents — Ronald Reagan, George H.W. Bush and Bill Clinton — conducted a foreign policy that consolidated and developed the combined force of those factors. The scope and concentrated power of such a global system inevitably required reinforcing executive power, which meant weakening the very idea of checks and balances. With 9/11, George W. Bush — celebrated as the first CEO president of the US — had the perfect pretext for concentrating even more of the effective power of the federal government in the executive’s hands. Mass surveillance, theoretically aimed at enemies overseas but perfectly adapted to domestic control, became a precious tool of the executive. And because the whole notion of intelligence was focused on national security, Congress fell into the role of after-the-fact overseer, at best.

The trauma
created by Bush’s interminable Middle Eastern wars and the collapse of the
banking system in his final year in office led to a populist desire to return
to a more democratic, less authoritarian mode of government. In his 2008 presidential
campaign, Barack Obama promised a return to a government of the people that
would theoretically restore checks and balances. But once in office, he
continued Bush’s foreign policy and even intensified it in various ways. In so
doing, Obama aggravated the trend toward ever more concentrated executive
privilege.

When a second
CEO president — the blustering Donald Trump — was elected in 2016, it became
clear that a good portion of the electorate now approved the idea of a dominant
executive. Part of the reason was that the voters were disgusted with a
Congress dominated by two parties who bickered and accomplished nothing (partly
in knowing complicity with the historical trend of transferring power to the
executive). At the same time, the taste for authoritarianism had grown among a
populace that increasingly witnesses the diminishing coherence of every aspect
of their economic and social lives. 

The idea that a
strong personality in the White House should have the power to get things done
has diluted beyond recognition the doctrine of checks and balances. It has been
replaced, at best, by the much weaker notion of oversight. But as it has now
become evident, having a delayed sight of a system that has no levers of
control outside the executive branch turns politics itself into a spectator
sport.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]

The views expressed in this article
are the author’s own and do not necessarily reflect Fair Observer’s editorial
policy.


Source: World Politics - fairobserver.com


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