Tuesday August 3, 2010
Many Americans are concerned by the direction our political leaders are taking our country. This is not merely a recent concern. During the eight years of the Bush administration the growth of federal spending, two wars, and the doubling of the federal debt created dissatisfaction among many of us. Then came President Obama and the aggressive agenda of a Democratic controlled congress. Federal spending exploded and the growth of the budget deficit threatens to bankrupt America. However, while America faces great fiscal problems, another danger has been growing, and its consequences risk tyranny greater than any we have faced since our nation's founding. This danger is the growth of executive power.
By executive power, I mean the power of the executive branch of our federal government. Since the election of President Barak Obama, this expansion seems to have exploded, even though President Bush garnered a great deal of power under the guise of national security. I'm not suggesting that President Obama is any different from our last several presidents, per se. I think this growth of executive power has been occuring for quite some time. Still, I am concerned by the breadth of power that the executive branch has been accumulating since President Obama came to office, especially with the federal takeover of companies like AIG, Citibank, GM and Chrysler, as well as with such recent legislative monstrosities as the "America's Affordable Health Choices Act of 2009" and the "Restoring American Financial Stability Act of 2010."
The federal government now owns or controls several of the largest financial institutions in the U.S. (e.g., AIG), as well as the second largest car manufacturer in the world (GM). With the new health reform and financial reform laws, the executive branch effectively controls a large part of the means of production for the U.S. economy. Whether this is good or bad depends on one's point of view. But should we really be comfortable giving the executive branch so much power?
Let's just consider the recent financial reform bill that made its way into law. Indeed, I am surprised that few are paying attention to the dangers in this bill. First, the every member of the oversight council (the main financial oversight body established by the new law) is appointed directly by the President of the U.S. Second, the head of this council is the Secretary of the Treasury, who is not only appointed by the President, but also serves exclusively at the whim of the President. Essentially, this new law gives he President of the United States direct control over the entire financial sector of the U.S. because the Secretary of Treasury and most of the members of the new Financial Oversight Council are duty-bound to carry out the policy objectives of the President. Moreover, under this new law, while the Federal Reserve still maintains most of its power, the Treasury gains more direct power over the economic system, without any congressional limitations on making new economic policy. This is way too much power given to the President and the executive branch.
Second, the new financial reform law further erodes the ability of states to maintain jurisdiction over its local and state financial institutions. While local and state banks played NO ROLE in the crash of 2008, the federal government has taken this opportunity to expand its jurisdiction over areas traditionally left to the states.
Third, the new law extends federal -- and specifically executive branch -- power and jurisdiction over so-called 'non-bank' financial companies. The bill defines such companies (whether incorporated in the U.S. or outside the U.S.) as: any company that is "substantially engaged in activities in the United States that are financial in nature" (Sec. 102 a, 4). While a 1956 law establishes the basic parameters for what counts as "activities . . . that are financial in nature," both the original 1956 law and the new financial reform law of 2010 give the Treasury and the new oversight council complete authority to add to this list, without restriction. In other words, the new financial oversight council, which is entirely comprised of presidential appointees, has complete authority to determine what does and does not count as "activities that are financial in nature." Congress has no power to override the council's decisions. This potentially gives the President direct control over every business, and perhaps every economic transaction in the U.S.
I doubt that anyone is planning anything sinister with regard to these 'fine print' details. But, why give the President so much power in the first place? This is a bad law, and it has potential dangers for our future. What was congress thinking when they passed this thing? How can congress fail to see that they are paving the way for a super-powerful executive branch?
Clearly, there are a number of very good things in the new financial reform bill, just as there were many good things in the health insurance reform bill. But my complaint is not about the beneficial items in these bills. My complaint is that these bills expand executive branch power to such an extent as to be dangerous.
If you haven't read these bills, I encourage you to do so. When you read the 'fine print,' you may become just as concerned as I am.
-- David Adcock, Managing Editor
