Monday, November 10, 2008

No New Bureaucracies: Speaking for Galbraith I

This Friday, November 14, I shall be participating in a public forum at the Theresa Lang Student Center, New School University, 55 West 13th Street, Room 1202, 1203, that has been organized by James K. Galbraith, a senior Obama economics adviser, under the sponsorship of the Economists for Peace and Security, and entitled, "Financial Crisis, the US Economy, and International Security in the New Administration." Besides Galbraith and myself, a few of the other participants will include Joseph Stiglitz, Lord John Eatwell, Allen Sinai, Paul Davidson, Perry Mehrling, Ping Chen, and Dimitri Papadimitriou, among others. I will be on a panel devoted to proposing new regulations for the domestic financial system. I shall discuss what I intend to talk about in four postings here, this the first one.

So, my first remark will be to urge that there be no new regulatory bodies or other bureaucracies created. What is needed are better rules and better people in the relevant positions. There may be (and already have been) changes in the powers of particular bodies, but any effort to create some new, grand oversight body will be just a waste of time and effort. Unfortunately, Democrats sometimes like to d0 this. So, in the wake of 9/11 they were stronger advocates than most Republicans of creating the Department of Homeland Security to combat terrorism. This was supposed to centralize and simplify decisionmaking, but it simply made things more confused and worse. Burying FEMA in this body did not help with its ability to fight against hurricane disasters and damages. I see no reason for Obama to revive Clinton's National Economic Council either. What did it ever do that the CEA cannot do? And for that matter, do we really need the Comptroller of the Currency? Cannot its functions be taken over by the Fed? In this time in which government will necessarily be increasing its role in the economy, let us at least hold back on increasing its overblown bureaucracy. Keep it lean and clean and mean.


reason said...

No argument there. The quality of institutions is far more important the quantity of institutions. In fact, maybe the number could be reduced.

Anonymous said...

I think there might be good use for reconvening the Committee of Public Safety. As I recollect this agency was most efficient in dealing with official intrasigency
and private sector profligation, especially of the financial kind. Best of all the Committee requires only limited membership, with decision making being confined to a few devoted participants.

Let Mr. Galbraith know that I stand at the ready to act as Chair of the Committee of Publilc Safety,
and you can assure him that I will resist losing my head in the the process. One more dedicated public servant would not be excessive. said...


Oh, it would just go the way of yet all those other bureaucracies!

Jack said...

It is all a matter of intention. Given the right tools and a genuinely patriotic intention the true perpetrators of this financial imbroglio and the economic disaster it seems to have promoted can be identified and excised. Peace and prosperity may then return to the world, not as we know it, but as we might hope it to be.

It seems to be a truism that those with far too much have far greater desires for yet more than those with only a little, and that those with only a little are satisfied to have just enough. It's all in achieving the right balance that real prosperity might return to our unbalanced system. Legend has it, and I doubt she really uttered the words, Marie disparaged the misery of the ragged poor. If the government through its various agencies and bureaucracies doesn't take some steps to return the middle class to its position of prominence in our economic system
new and unique agencies come to the fore.

At the moment, BO doesn't seem to be setting up a team that we can expect great things from. Better than GB's group? That's hardly an adequate measure. It's shaping up to be a Clintonian office and that is obviously better than Darth Vader, but markedly worse than what Obama represented as a new hope.