Policing the Elite

The U.S. ruling elite is out of control, but it can be policed. If informed citizens understand the constraints limiting our options, identify the core dynamics with which we must deal, and focus on core principles such as transparency, personal responsibility, rigorous regulation, and avoidance of moral hazard rather than endless debate over policy details, then society can gain traction over the corrupt and power-hungry—both within formal government and within the unofficial ruling elite—and thus have some hope of reversing the all-too-evident decline in the health of America.

To tick off a sobering list of negative trends characterizing the U.S. today takes little imagination; writing a scenario illustrating how the U.S. could decline is similarly easy; blaming it all on some group, especially groups such as “the rich” and “politicians” who go out of their way to take credit for everything, is child’s play. Unfortunately—for those who aspire to reverse the now very well known negative trends characterizing U.S. governance, customs, economics, global moral standing, and environmental situation, identifying points where we can significantly influence the direction in which we are headed is vastly more difficult.

For example, what portion of our economic malaise results from “the lazy poor,” from “class war by the super-rich,” or from long-term shifts in underlying global conditions over which even an educated, determined, united population guided by patriotic, far-sighted leaders could expect to have only marginal influence? What portion of the current tidal wave of greed and corruption that is overwhelming the elite and corroding democracy results from specific bad politicians or bad policies and what portion lies beyond our control as the political equivalent of the business cycle—a multi-generational fluctuation that happens to have placed U.S. society today in a position analogous to the 1920s?

Many U.S. policy mistakes appear to originate in overconfidence – the overconfidence of individual leaders in themselves, certainly; the overconfidence of Americans in their own superiority; and, sadly, overconfidence in our ability to do improve our own performance. Perhaps humans can learn to improve, though the ills of bad governance in ancient China and ancient Rome sound awfully familiar; given another 10,000 years, who knows, but over the mid-term, recognition of constraints would give society a much firmer grasp on reality than the current naïve overconfidence in our ability to improve, which only undermines essential follow-through. Over the mid-term:

  • We will not eliminate corruption from government;
  • We will not prevent elected leaders from trying to exploit violence to gain power;
  • We will not persuade the average American voter to make the necessary effort to understand the ever-more complicated and confusing world so as to be able to make accurate judgments about policy;
  • We will not persuade the average American voter to acquire sufficient education so as to gain the ability to understand how the world looks from the perspectives of major foreign social groups;
  • We will not manage to set up a system of government that will filter out incompetent, uneducated, immoral, unpatriotic candidates for high office;
  • We will not even figure out how to write regulatory rules with sufficient precision so as to be able to catch the crooks who exploit the system for private gain;
  • We will not devise a way to prevent the rich from exploiting the rest, but we will also not devise a way to prevent the mob from mistreating minorities or, indeed, from shooting itself in the foot;
  • We will not devise a form of government that we can simply plug in and forget;
  • We will not find leaders who can be trusted to take care of us while we all go out to play.

Even a marriage does not work very well when the partners put the relationship on automatic; why would anyone expect a government or a private corporation to do so?

Is the situation hopeless? Well, no, all sorts of regimes and corporations exist, and we can, with effort, influence the nature of ours. Recognizing what we are up against is just the first step. A second step might move past limitations to focus on dynamics. Every aspect of existence seems to possess a set of built-in dynamics: oceans have tides, the surface of the earth has plate tectonics, life has population dynamics (e.g., predator-prey). If we could identify the major dynamics of governance, we would have a significant tool for building a governmental system that would work. For example,

  • Power corrupts: no matter how wonderful I am, the more power I have, the more tempted I will be to misuse it.
  • An individual might (possibly) be a saint, but a group never will be: there is a built-in group dynamic that pulls group behavior toward the lowest common denominator, so that the longer a group exists, the greater the tendency of that group to lose the vision and energy that once made it shine.
  • Good and evil are abstractions; in reality, within all groups and even within all individuals, good and evil exist in a dynamic relationship amenable to influence.
  • People will pursue self-interest.

Each dynamic leads to a corrective measure. If power corrupts, it follows that transparency and regulation are essential. If groups lose their dedication, their virtue, their sense of direction, it follows that it makes no sense to put one’s trust in any group forever. If good and evil exist everywhere in a dynamic, i.e., unstable, relationship, then it follows that labeling a group or individual as either “good” or “evil” guarantees loss of opportunity. If people will pursue self-interest, then design laws and regulatory rules that encourage people to obey: to encourage people to work, make the income tax rate for earned income lower than the rate for unearned income; to minimize the likelihood of war, pay the CEOs of arms manufacturers minimum wage during wartime; to minimize bank fraud and the resultant economic disruption, make banks fund insurance against bank failure so that they foot the bill for their colleagues’ failures (an approach already in use by the FDIC and advocated by Sheila Baer for broader implementation); to encourage people to care for their own health, pay people to get regular check-ups and achieve health standards; to protect the environment, make corporations fund spill clean-up insurance and pay rewards to corporations that pass stiff inspections. Prohibit the revolving door from government regulatory agencies to the corporations regulated while rewarding civil servants with high salaries for staying in government and bonuses for identifying corporate fraud. Put the burden of proof on corporate officials to prove personal innocence when corporations they manage engage in fraud or pollute the environment; make non-criminal punishments (e.g., being fired and banned from the profession) automatic for officials in abusive corporations or government officials that engage in egregious deception (e.g., a president who lies about the reasons for launching a war, an intelligence chief who withholds information from Congressional oversight panels, a regulator who conceals corporate fraud).

These cautions apply regardless of race, religion, creed, party, or nationality. These cautions apply both to government and private corporations, to both local and national governments, to both religions and civil groups. These cautions apply to liberals, conservatives, and radicals. Your favorite organization is not immune…unless it excludes humans, limiting membership to angels.

Power corrupts; groups decline; good and evil both exist everywhere in a state of flux. Therefore, “trust but verify;” demand transparency; strengthen checks and balances; regulate clearly; avoid moral hazard and conflicts of interest like the plagues they are; write laws that are as simple as possible and that reward voluntary cooperation. That’s how to police the elite.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s