Bureaucrat, Indict Thyself

The lesson; the basic value; the fundamental is simple – tend to your own defects; do not deflect to the defects of others. There is another way of saying the same thing – many would rather point out the speck in their neighbor’s eye and ignore the log in their own.

Let us state very clearly, upfront, at the beginning of this essay, that TheFundamentals has no truck with the shenanigans of Goldman Sachs or any other banking or investment/insurance firm that is proven to have engaged in either the violation of accepted lending standards or in the marketing and/or sale of any flawed investment products without full disclosure. TheFundamentals further has no issue with the demise of insolvent banking and or investment/insurance companies due to excessive debt; too much leverage; the accumulation of too many crappy assets or, as seems to be the case behind most of the private sector losses, just plain bad management. But what about the endless examples of terrible bureaucratic management and regulation and no consequences? No discipline/terminations/indictments?

Which bureaucracies does TheFundamentals suggest warrant an overdue extended period of self examination and introspection coupled with some real house cleaning?  If there is negligence, who indicts the negligent bureaucrat? Let’s take a look at two huge, failed bureaucracies.

First, here are the stated objectives of the Securities and Exchange Commission. The mission of the U.S. Securities and Exchange Commission is to:

• protect investors,

• maintain fair, orderly, and efficient markets, and

• facilitate capital formation.

The commission has failed its mission. Who indicts the commission? Who indicts the employees of the commission? Who terminates those who failed to do their job? Do they lose wages and benefits and pensions as a consequence of their failure? Do they face indictment for either civil or criminal negligence as a consequence of their failure? Does anyone discipline the failed commissioners and employees? The people elect representatives and senators and a president to oversee this bureaucracy. If they do not fulfill this responsibility, what happens? Can they be indicted?

Second, here are the stated duties of the Federal Reserve System. Today, the Federal Reserve’s duties fall into four general areas:

• conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employ¬ment, stable prices, and moderate long-term interest rates

• supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers

• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets

• providing financial services to depository institutions, the U.S. gov¬ernment, and foreign official institutions, including playing a major role in operating the nation’s payments system

The Federal Reserve System has failed in its duties. Who indicts the system? Who indicts the employees of the system? Who terminates those who failed to do their job? Do they lose wages and benefits and pensions as a consequence of their failure? Do they face indictment for either civil or criminal negligence as a consequence of their failure? Does anyone discipline the failed board members and employees? The people elect representatives and senators and a president to oversee this bureaucracy. If they do not fulfill this responsibility, what happens? Can they be indicted?

Do not hold your breath awaiting any indictments of the commission or The Federal Reserve. Obama says we need reforms to avoid a repeat of the current mess. Do not expect Obama to implement any “reforms” that would hold the management of these bureaucracies responsible for their failures or negligence. Do not expect Obama to ask Justice to indict those responsible at the commission and the system. Everyone agrees that the bureaucracies and regulatory agencies failed over and over again in doing their job. Just don’t expect anyone to ever insist that performance standards be set for government workers with consequences for failure. There are no consequences for government failure; only finger pointing and indictments elsewhere.

TheFundamentals has pointed out the problem in a representative democracy without term limits is the embedded tenure of the long serving representatives and senators in high positions who are shielded in very safe electoral states and districts. The same deterioration of quality government service is repeated when bureaucrats are able to stay in positions for extended periods, 20 and 30 years in many cases, with no risk of termination and no discipline process or any jeopardy in the civil and criminal court systems.

This system must be changed. Bureaucrats must face discipline for their failings. Bureaucrats must face indictment for their negligence. Ask your congress person and senator to introduce, support and vote for a law setting measurable bureaucratic performance standards with civil and criminal penalties for failure or negligence. When asking doesn’t work, insist on it from new candidates. When a new candidate embraces this level of responsibility and accountability, then, and only then, consider voting for that person in November.   Ultimately, we the people are responsible for the quality of service we receive from those we pay to do a job.  They will not indict themselves.  Our elected officials have lost their way.  They refuse to oversee the bureaucracies they have created.  They are incapable of negotiating with the unions that represent the bureaucrats.  Their is no job performance standard.  There is no discipline.  All must go.