Permit Me a Moment of Populist Rage...

A recent report by Neil Barofsky, Inspector General for the Troubled Assets Relief Program (TARP), found that the government bailout of financial institutions has actually made a future economic crisis more likely. The main reason for this is that the megabanks which embroiled the US economy in the crisis now have no incentive to reduce the risk they take on, because they know the government will bail them out again. Indeed, in testimony before the Financial Crisis Inquiry Commission in mid-January, the executives of major financial institutions—Bank of America, JP Morgan Chase and Morgan Stanley—made clear their belief that, should any of them risk failure, the government would step in.

In short, while TARP was necessary, and while it did provide the funds necessary to keep credit moving in the financial markets, the government has still done nothing to change the banking practices that created the crisis in the first place. That some financial institutions are considered “too big to fail” is a frightening—and absurd—fact.

The government must take steps to regulate particularly risky practices—such as credit-default swaps, derivatives trading (a practice so complicated, I'm still trying to figure out how it works), mortgage-backed securities, and short selling—and to break up the nation's largest banks, lest the taxpayers be forced to bear the brunt of more Wall Street irresponsibility. The government also ought to improve oversight of the financial system, such as implementing minimum capital requirements for banks that take on certain risks. There is no sense in the government waiting for a crisis in order to intervene; if it was justified intervening in autumn 2008 to prevent a complete fiscal meltdown, it is surely justified now, in order to proactively prevent such a catastrophe.

The recent reforms proposed by President Obama and Congress are a good step toward achieving this goal. Based on the substance of his reforms, it is apparent that the President has finally thrown his weight behind chief economic adviser Paul Volcker, who, since the inception of the crisis, has advocated for these and other reforms of the financial system. Volcker is a reformer, not a radical; he recognizes the importance of having robust financial institutions in today's complex, global economy. The goal of his reforms are not to exact vengeance on the banks, but to make sure they do business more responsibly. Should they not conduct themselves responsibly—should they take on risks which they cannot support—their downfall ought not to threaten the nation’s financial security.

It is this practical, proactive and realistic approach to financial reform that President Obama and Congress must keep in mind when shaping legislation in the coming months. Not only will it improve the health of financial institutions in the United States, but it will also sit well with voters, who will perceive him as taking a stand against the monied interests who caused the crisis.

The premise of these reforms must be twofold: firstly, egregious risk-taking on the part of Wall Street must be limited and regulated by the government. Secondly, Wall Street institutions must never be allowed to grow to the point where their failure would result in the collapse of the entire Western economy.

DAVID ZOPPO

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What Not to Wear

It may seem silly, but the French Government is currently considering a law that will affect how women dress. After President Nicolas Sarkozy’s comment last June that burqas are “not welcome” in France, the country is now considering legislation that would ban women from wearing a burqa or niqab in state venues such as hospitals, public buildings, and on trains and buses. The proposed law would not extend to the public streets, but it is expected that the legislation may lead to similar edicts in stores as well. This law could effectively make women who wear the veil prisoners in their own neighborhood.

This proposal follows the 2004 ban of “ostentatious religious wear” in French public schools. The ban forbids students to wear large crosses or Stars of David, and even prohibits Muslim girls from wearing headscarves. The law was mostly used against headscarves and consequently met with a large outcry from the country’s sizeable Muslim population; numbering an estimated 3.5 million, France’s Muslim population is the largest in Western Europe. The 2004 law, however, provided Muslim families with options. As the law only forbids headscarves and other religious wear in public schools, parents could choose to send their children to private school. The proposed burqa ban would give women who wear the veil no choice but to discard it or stay at home.

Many question the logic behind the ban. Legislators claim that it is a security risk to have one’s face covered. President Sarkozy has stated that, beyond the issue of security, the practice goes against Western culture. He says that the West is open and the burqa and niqab are inherently closed. Some supporters of the law say it will be a good thing; they believe that many women are forced to wear the burqa by their husband or by other male family members, and that it indicates female subservience. But women who wear the burqa disagree. They state that they choose to wear the veil, some even against their husband’s wishes.

Still others suggest that the law stems from “Islamophobia,” with the knee-jerk association of Islam with terrorism. Many see a direct correlation between the full veil and extremism, and from there it’s not a far jump to terrorism. In France, however, this seems unfounded. Many of the 1,900 French women (approximately 0.038% of the French Muslin population) who wear the burqa or niqab are refugees who fled from the extremism in their home country.

So does the French government have the right to ban the burqa? Should the French government be able to dictate what women can and cannot wear, and to force citizens to alter their religious practices? It hardly seems either right or constitutional. The preamble of the French constitution affirms La Déclaration des droits de l'Homme et du Citoyen, or the Declaration of Rights of Man and Citizen, which defines the “natural and imprescriptible rights of man" as "liberty, property, security and resistance to oppression.” It would seem, therefore, that women should have the freedom to wear a burqa if they choose. And whether or not Muslim women are wearing the burqa by choice or by order of their husband, well…that’s hardly something for the government to decide.

Should the French ban the burqa and niqab and deprive women of the right to practice their religion as they see fit, especially when they are not harming anyone else? Unless the French are willing to ignore what they themselves decreed as the natural rights of man, the burqa ban should not go into effect. France may be the fashion capital of the world, but the government should stay out of decision making in regards to what not to wear.

SARAH WENTZ

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He's Not Dead Yet

It is one year after the inauguration of President Obama, and his approval ratings have taken a severe hit. But does that mean his number is up? Are his hopes for re-election dead before he even begins campaigning?

Recent Gallup daily approval polls show that fewer than half of Americans approve of President Obama’s performance since he took office one year ago. Given the long-standing trend of a decrease in approval ratings through the second year of presidential terms, the future looks cloudy for President Obama. But there have been exceptions to the trend of falling approval ratings. Among recent presidents, both President George H.W. Bush and President George W. Bush actually saw a rise in their ratings during their second year. Many political analysts, however, do not believe that President Obama can do the same.

In light of the recent special election in Massachusetts, the media has suggested that the defeat of the Democratic candidate is due to dissatisfaction with President Obama and the Democratic Party as a whole. But that election is a whole different issue best left alone for the moment. Scott Brown’s election is noteworthy, however, as many claim that this Democratic defeat forecasts even bigger losses in the 2012 presidential election.

But not everyone is so quick to write off President Obama. Confidence in President Obama’s abilities to turn things around came from a surprising source: Mike Huckabee. The former Republican candidate suggested that the Massachusetts election signifies “the beginning of the end of the Democratic domination of Congress,” but he also says that it signifies “the beginning of the re-election of Barack Obama.” Huckabee makes a good point: in reaction to the special election, President Obama will have to change his course, a change that more than likely put him in a better place come 2012. It is a change he might not have made had the Democrats won Massachusetts and thus kept their filibuster-proof Senate majority

But I digress. The question remains: do low poll numbers now indicate a future Obama defeat? Perhaps. They’re certainly not a good sign, and they do forecast a difficult re-election. Yet his election to his current office was no easy feat either. Two years ago today, he had been discounted as a candidate for the Democratic nomination, let alone as a candidate in the general election. So can he do it…again? Can President Obama overcome the poor approval ratings and the political analysts who say he hasn’t a chance? Maybe. He certainly has a fair shot. After all, a lot can happen in two and a half years.

SARAH WENTZ

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The Ignorance of the Supreme Court

In the Supreme Court's recent ruling in Citizens United v. FEC, the Court struck down campaign finance laws that banned corporate political spending on candidates in federal elections. Both the right and left have expressed outrage at the ruling, which, it is believed, will drastically increase the amount of money that corporations, unions and other interest groups spend to support or criticize federal candidates.

But despite all the outrage, one must ask: will the ruling really change anything? Though a great deal of campaign finance reform has taken place in America since the 1940s, the political system remains distorted in favor of elites, who have significantly more leverage than does the average American. Indeed, it could be said that the provision at issue in Citizens United did little to reduce the influence that corporations and special interests have in federal elections.

What we saw with Max Baucus during the health care debate is a perfect example: he received millions of dollars from insurance companies and hospitals to tailor the legislation to their benefit, while ignoring the demands of center-left and progressive Democrats for more radical changes like the public option. Campaign finance reform has done little to change the fundamental flaw in the democratic electoral system: namely, that those with the most money have the loudest voice.

Whatever the effect of the ruling, it's clear that the Court was not interested in addressing the problem; their arguments focused on the supposed “chilling” effect that the McCain-Feingold Act had on a corporation's free exercise of political speech. Their reasoning goes like this: according to the first amendment, the government does not have the authority to restrict speech based on the character of the speaker or the content of their speech; based on a long line of Supreme Court precedents, corporations are entitled to first amendment protection. As such, the Court concluded that McCain-Feingold's restrictions on corporate spending are unconstitutional because they restrict the ability of a certain class—big business—to express their political beliefs.

This is a stock argument against the ban; but read further into the Court's opinion, and you will note an important distinction that considerably weakens their reasoning. The ruling in Citizens United—that the government may not restrict corporate spending during campaigns—applies only to a corporation's independent expenditures on a candidate, not to their direct contributions to that same candidate. Corporations are still forbidden to directly contribute to candidates, but they may spend as much money as they like to promote or criticize said candidate. For instance, Blue Cross and Blue Shield cannot contribute to Harry Reid's opponent; but, after this ruling, they can spend as much as they like on their own ads criticizing Harry Reid and promoting his opponent.

The distinction between direct contributions and independent expenditures is crucial to the Court's argument. The Court admits that direct contributions from interest groups to political candidates fosters corruption, but when these groups make independent expenditures —for instance, a commercial for or against a candidate—there is somehow no threat or appearance of corruption. To quote Justice Anthony Kennedy's opinion, “simply because speakers may have influence over or access to elected officials does not mean that those officials are corrupt.”

Are you kidding me? What is an “independent expenditure” if not an indirect contribution to a candidate? The Court's argument rests on the fallacious assumption that only direct contributions from corporations to candidates foster corruption, and that any independent expenditures—though they have the same effect as direct contributions—do not create such a problem. Proponents of the Court's decision would argue that even after this ruling, campaign finance law remains the same: you still can’t buy a vote.

But the fact of the matter remains: it's not necessary for a corporation to provide direct financial support to a candidate in order for corruption to exist. Out of necessity, the relationship between interest groups and political figures has evolved beyond that point: not only is it illegal for politicians to receive direct contributions from these groups, but it's also unpopular among the American public. Americans have always despised the idea that someone should receive privileged treatment as a result of anything but their own hard work, and the populist rage against the elite—the banks, the politicians, the executives—reflects this attitude. So business and government have had to adapt their relationship to the point where a vote can be bought without even a penny being exchanged. The fundamental flaw in the Court's ruling is its frightening misunderstanding of the nature of corruption in contemporary American politics.

DAVID ZOPPO

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Two Cheers for Cronyism

Who can you trust? In politics, the answer increasingly seems to be "nobody." The newly-released book "Game Change," written by Mark Halperin and John Heilemann, is Exhibit A. Halperin and Heilemann's gossipy behind-the-scenes look at the 2008 election is loaded with juicy quotes plucked from "unnamed sources," "anonymous staffers," and "campaign higher-ups," each one desperately trying to spin the truth to their own advantage.

So how are politicians supposed to act when everything they say or do might eventually find its way into a tell-all memoir? Frank Bruni explores the issue in a though-provoking New York Times article.

The biggest problem, as Bruni rightly points out, is a lack of loyalty. In the past two decades we have seen the rise of a new political class, a gang of mercenary advisers who hop from candidate to candidate in search of the big score. True, they are not completely unprincipled; most work only one side of the political spectrum, for either Republicans or Democrats. But beyond that, they have no connection to their candidate other than a paycheck. Think of Steve Schmidt, brought in to advise John McCain, or Chris Lehane, formerly of the Edward campaign.

Maybe, then, cronyism isn't such a bad thing after all. Maybe a candidate should surround himself with close friends rather than hired guns. Yes, they might not look as flashy, and they also might cause a certain ideological cocooning. But at least the candidate's friends know his strengths and weaknesses. They won't try to make him something he's not. Plus, if a candidate is more comfortable with his advisers, he'll be more comfortable in general. Can you really share your feelings with a campaign manager you hired two weeks ago?

Two cheers for cronyism--at least the cronies are usually loyal.

WILL SCHULTZ

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