Of Presidents and Derelicts

Barack Obama is no fan of the Constitution. He has been known to criticize it for its focus on limiting government, for telling governments what they can and cannot do. He prefers a Constitution that focuses more on telling governments what they should do, at least telling governments to do what he would like, including seeing to the “redistribution of wealth,” or what he calls elsewhere “redistributive change.”

Of course, that is a mischaracterization. Not a mischaracterization of Obama’s views but of what the Constitution says. It does limit government, but it also gives government specific responsibilities and the power to exercise those responsibilities. Article I, Section 8 provides a very clear list of the federal government’s duties. It is noteworthy that those enumerated responsibilities and powers are in the Article that establishes the Congress. The list includes such things as providing for the common defense, borrowing and paying government debts, regulating foreign and interstate commerce, establishing standards for weights and measures, and so forth.

There are plenty of other provisions that limit the powers of the government and how it operates. The Constitution is a balance of governmental duties within a structure intended carefully to limit the government. As a limited government our Republic has prospered. It has struggled either when its duties were neglected (as in the days of President Buchanan, who did nothing while he watched state after state rebel from the Union) or when the limitations have been eroded (as we have witnessed through much of the twentieth century and in the first 14 years of the twenty-first).

The President has specific powers and duties, too, nearly all of which are carefully linked with the role of the Congress. For example, while the President does not make the laws—Article I, Section 1 gives “All legislative Powers” exclusively to the Congress—the President is authorized to make proposals to Congress and has the authority to veto legislation (but not change it) that Congress has approved. Once an act of Congress becomes law, the President then has the explicit obligation to, “take Care that the Laws be fully executed” (Article II, Section 3).

Note the words, “fully executed”. The President takes an oath to fulfill those duties, and nowhere in oath or Constitution is the President authorized to execute the laws only as much as he likes or agrees with them. Once something has become a law, the President may not set aside this or that part of the law or decide that he will only enforce the law so far. His obligation is to take Care that the laws are fully executed.

Average Americans may not like this or that provision of law, but we are not at liberty to ignore any law that applies to us just because we do not like it. The President is not exempt from that common responsibility of all citizens, either. As the chief government executive, who sought to hold his high office of public responsibility, he is even more obligated not only to obey the laws but to execute them, fully. The President may not make the laws, he may not amend the laws, he may not change the laws, and he may not disregard the laws. His duty is to execute the laws, and when he does not he is derelict in his duties.

This is all in accordance with the important division of labor, the separation of powers that the Founders put into the very structure of the Constitution to combat the tendency of all humans to abuse power once it comes into their hands. By dividing the power of government among three separate but coequal branches, dividing legislative power even further between House and Senate, and yet again separating government power between federal and state governments, the Founders went to clear and elaborate lengths to create checks and balances.

Under the American system of government no branch, no person, no group of people in government, are to be able to do very much on their own without getting the other elements of government to go along. Where they are not able to agree, where there is no consensus, for the safety of our freedoms government is prevented by constitutional law from moving forward unless substantial consensus among the different branches can be reached. Those checks and balances again and again, throughout the more than two centuries of our Constitution, have forced the very human people in government to revisit their differences and come to terms with one another, however much they may disagree and be disagreeable. There is safety for you and me in that. And it helps keep our Union together, repeatedly forcing our leaders (and the parts of the nation that they represent and whose authority they exercise) to work with one another, like it or not.

Recently, President Obama has expressed impatience with the Constitution’s checks and balances. After all, he personally, in and of himself, embodies an entire branch of government. The other branches, Congress and the courts, have many different people with a messy variety of ideas. President Obama complains that Congress cannot decide what it wants to do as quickly as he can. In his view, why wait?

By design, Congress of course has something of a multiple personality. It is a gathering of elected representatives, reflecting the diversity of views among the people of the nation. Appropriately, it takes time to build a consensus that accommodates those views, as it should. But President Obama cannot wait. He sees the need to accommodate no ideas other than his own. He has decided that on this issue or that—today it is immigration laws—there is a limit, defined by himself, as to how much time Congress can take to consider things. When time is up, he, the executive branch, will take the matter into his own hands, and pretend to the authority to do it.

His tool of choice today is to abjure his duty to execute the laws fully and instead to execute them partially, just to the extent and manner that suit his own desires, as he engages in another round of redistributive change. That he is endeavoring to violate rather than execute our national, founding law, and his constitutional oath of office, apparently does not trouble him. It is the Constitution itself that troubles him.

But from where does he think he gets his authority to do anything. When he breaks the Constitution, does he not break his very authority to act in the office that the Constitution created?

Of Unbanked and “Underbanked”

Speaking of banks, as I did on this page a short time ago, there are those who are concerned that too many people in the United States are “unbanked” or “underbanked.” By the former they seem to mean those who do not use any banking services, particularly who do not have any bank accounts. By the former, they mean those who obtain some banking services from businesses that are not banks. The very existence of the terms, and the way that they are used by those who use them, implies that being “unbanked” or “underbanked” is a bad thing.

I will here disclose that I have worked for banks for nearly 10 years and for all I know may continue to do so for some time into the future. Whatever bias or color to my views that this condition provides I will nevertheless try to comment from a fair and factual point of view.

My first point, therefore, is that I am not prepared to assert that absolutely everyone should have a bank account. I can easily envision the value of a bank account for most if not all people, but I concede that they should be allowed to choose for themselves and that it would be terribly wrong to force people into banks. I acknowledge that there are some alternative providers of financial services who seem to please their customers, and I do not deny that banks can benefit from good competition. Banks have a long history of drawing upon the ideas and innovations of non-banks, just as non-banks have been eager to try their hand at successful new products and services that banks have pioneered. Bank customers have benefited the most from that process, as the variety and value of financial products have expanded, and the United States has led the world in the discovery of new and useful financial services.

Having said that, the nation cannot do well without a strong, vibrant, and prosperous banking industry. Our nation and people grow as we save financial resources and invest them in improvements for the future, whether new homes, new factories, or new ideas of how to do and make things better, faster, and cheaper. That is a major part of what banks do and are all about.

Moreover, there are a lot of things we do and a lot of places we go because we know that our ability to pay and get paid—to exchange things we value less for things that we value more (the reason we buy and sell things and use money to do it)—is secure, reliable, accurate, and relatively quick. That is our payments system, and banks created it and are at the center of it.

Americans also like the idea of becoming wealthier and expect to do so. If that seems a commonplace to you, recognize that it is not so in all parts of the world, where getting by from day to day is about the most to which people can aspire, for whom poverty is a way of life that they expect to bequeath to their children. To the extent that this miserable condition is becoming less the case in much of the world, that more people are beginning to believe that they can build and improve their wellbeing for themselves and their posterity, this new-found hope for accumulating wealth is attributable to the dispersion of principles of freedom and prosperity that Americans take for granted but which are new to much of the world. The global adoption of many American principles of prosperity has been a major contribution of the New World to the Old World and to all mankind.

Now get ready for the bold but true statement: you cannot get there and stay there without banks and the services that banks provide. Banks gather wealth, safeguard wealth, allow it to be used efficiently, and apply it to building the future. That is why governments pay so much attention to banks, and also why it is so harmful when governments try to capture banks and channel their services to the personal gain of themselves and their cronies. That is also why misguided bank regulations are harmful—even if in subtle but powerful ways—to the nation and its people.

Which brings us back to the agenda of the “unbanked” and the “underbanked.” In the United States, chief causes for people remaining “unbanked” are regulations that make banking more difficult and services more expensive; cultural barriers for people who come from societies where personal banking is either unknown or where the experience has been one of banks used by local governments to harvest wealth from people to enrich the governing elites and their cronies (much of Latin America, for example); and people who for whatever reason just do not prefer to use banks. The first cause regulators can solve but have largely been resistant to solving; the second can be overcome by time and experience and is showing signs of that; and the third cause is no more of a problem than people who prefer to rent rather than own their home, to eat eggs without grits, or who do not like the New York Yankees. I do not have to understand the personal preference to acknowledge it.

The concept of “underbanked” (that government needs to help banks figure out how to serve people who may get some banking services outside of banks) I fear may be a political device to harness American banks to serve the cronies of the “underbanked” advocates. We have already seen this game with the Community Reinvestment Act (CRA) regulations, adopted ostensibly to ensure that banks lend to their local communities (as if bankers, unlike other businessmen, need government regulation to notice business opportunities right under their own nose). In practice, CRA has been used to coerce banks into providing loans and even grants to and through poverty advocacy agencies that tend to prosper more than the people whom they claim to be helping. The folks who fret about the “underbanked” have marvelous formulas and plans for other people’s money to solve problems about which the people to be helped seem little concerned. I have never heard of any truly “underbanked” people themselves calling for the firm hand of government to get them into the banking system; if they want banking services, they just go and get them.

I have the haunting suspicion that the “underbanked” advocates would if they could use banks the same way found in the abandoned societies of the “unbanked,” where banking services came through the hands of people who knew better than others and always made sure to get their cut for their benevolence. That is not really banking, and that is symptomatic of why people flee those lands. The wealth creation of such captive banks seems to be for someone else. If it happens in America, where will the people go?

Of Hope and Just Getting By

Working in Washington, D.C., and living in the D.C. suburbs as I do, I am fond of saying that I eagerly accept opportunities to get away from the Capital region and spend time in real America. That has always been a bit of an overgeneralization, expressing a usually correct but not unerring description. Washington is not real America, but there are parts of this nation that have already gotten ahead of where the smart people of Washington have been able to take the nation. Those places are not what I mean when I refer to real America.

Our large, industrial states are examples of misrule by those who assume that their ability and right to rule, and the inexhaustibility of the wealth of their cities and states, are given and immutable. Wrong on all assumptions. These states, once beacons of progress, growth, and development, are wastelands of decline: economic, social, moral, and even demographic. Millions of people—those who could—have been leaving these states for decades.

The recent bankruptcy of Detroit is a prominent symbol of where this misrule leads. At its prime a bustling metropolitan center approaching two million in population, Detroit has been steadily falling from its prime to a dilapidated city of barely 700,000 who remain to wonder where have the productive people gone, and what is to be the future?

I recently returned from spending several days in such a place, mixing with, talking with, associating in the daily lives of the ordinary people living there, people with whom I had lived as a wide-eyed teenager a generation before. I am not referring to the urban center of the state. The region I visited has been for 150 years a mixture of industrial and rural economies, and as I recalled, a happy mix. Now the villages and towns are actually smaller than in my youth and shrinking. The number of productive enterprises is fewer and those that remain, smaller. The schools have remarkably fewer students and struggle with how to keep their programs going with declining enrollments. The largest employers are the instruments of government welfare services—as well as a couple of new state prisons—and the local hospital network.

The people were friendly and pleasant, yet something did not feel right. I understand the wisdom that “you can never go home” if you expect to find all the same. I expected change. New technologies were present, hand-held electronic devices ubiquitous, a fair number of new cars, if not the foreign luxury models so common in Washington. It was not, though, a happy place of happy people. Why?

It was only near the end of my stay that I recognized the ailment. The region has become a land of small hope, particularly small hope of progress. People there were not living their lives to get ahead, to advance, to build a better future (I cannot recall seeing a single new house in the several days of my visit, though the dump north of town is working on its third mound). Most of the people in these formerly vibrant communities, with what I remember as bright expectations for the future, were now living their lives to get by, just to get by, to get on from day to day, holding on to what they have.

Taxes are high, so it is not easy to keep what you earn. Regulation makes it hard to do anything new. For those reasons, businesses have been leaving, and so have the talented youth. Talk with the people about their daily lives, and not long into the conversation the problems of wrestling with this or that regulation or working with some officious government apparatchik will come up. And yet so many of the people expect the solution to their problems to come from some new government program or service rather than from their own effort.

I say “most” of the people are so ailing. There are a few exceptions, and interesting ones. Two religious groups seem to be growing—and not the establishment churches, whose places of worship, grand and beautiful buildings, eloquently testify to bygone days of prosperity but now show signs of neglect. The two groups are the Latter-day Saints, whose Church was founded in the area nearly two hundred years ago and whose membership is growing steadily, and the Amish/Mennonites, who in recent years have moved in strong numbers to take advantage of neglected farm land. There are also some very prosperous farm businessmen, also gathering up land and putting it into obvious productivity. Finally, I would mention the growth of mini-wineries, although this latter movement seems after about 25 years to be approaching maturity.

Hope is an essential ingredient in happiness. Hope comes from the belief that a desirable future is attainable, so much so that it draws out extra effort to realize its promise. Genuine hope in your own effort can be contagious, and those who have it can help revive communities. You cannot do much to give hope without that personal effort, but hope comes naturally with that effort and the opportunity to keep the fruits of one’s efforts. Our nation’s founders were filled with hope and with it created the greatest nation on earth.

There is no hope, though, in just getting by. In the end, you cannot get by if getting by is all there is to your hope. No future there, only decline. For hundreds of years people have been leaving their lands where they struggled to get by and have been coming to America, to them a land of hope and the freedom that feeds hope. When I leave Washington to look for America, that is what I am looking for. I hope to find it ever.

(First published July 20, 2013)