Thursday, January 28, 2010

Arizona politicians focus on jobs -- their own!

With the country in recession, our politicians' chief challenge is how to preserve jobs -- starting with their own. As incumbent reelection rates typically exceed 90%, the second worst thing that can happen to a politician is to have to leave their seat and face an open, competitive election for a new one. (The first worst thing, of course, would be to get a private sector job!)

And so, across the land, there is a wave of politicians seeking to overturn term limits. In Arizona, Missouri, California, Michigan, South Dakota and Florida, anti-term limits bills are pending. Most are simply trial balloons that will be shot down as soon as citizens are alerted to them. Politicians who do some polling or review recent ballot results will find out quickly that citizens desire term limits now more than ever.

Nonetheless, in Arizona one such bill to repeal term limits, sponsored by Carolyn Allen (R-Scottsdale), has just emerged from the Judiciary Committee on Jan. 19.

What are they thinking? Not about their constituents, you can be sure. Eight-year legislative term limits were originally enacted in 1992 when Arizonans voted with 74 percent of the vote to add them to the state’s constitution.

In response, U.S. Term Limits is running this 30-second television commercial on Arizona TV to let the people know what's going on. Stay tuned.

Wednesday, January 27, 2010

Would term limits improve Fed independence?

It is widely remarked that while there are numerous contributors to the current credit crisis, the primary cause -- without which the others would not have led to calamity or even occurred at all -- is the easy money policy of the Fed through much of the '00s.

Of course, Wall Street, the banking industry and politicians in both the White House and the Congress have historically pressured the Fed to keep the printing presses running. Easy money generally means low interest rates and expansion of the economy even if the actual savings patterns of Americans don't warrant it. Although bubbles and/or price inflation are the eventual result of such policies, historically the Fed has buckled to this political pressure. It continues to do so right now.

So how do we insulate the Fed chief from these powerful special interests? One Wall Street Journal blogger suggests term limits.

In his Jan. 26 post, Jon Hilsenrath points out that the chief of the European Central Bank has an eight-year limit and maybe Fed chairmen should too. After all, term limits "would insulate the Fed from political meddling because a chairman would know that there would be no point to pleasing political masters because the job runs out after eight years."

He suggests the Fed "became complacent during the latter years of [Alan Greenspan's 19-year] reign, keeping interest rates too low for too long ... and underestimating building risks in the financial system. Because the economy seemed to do so well for so long, it became harder over time to second-guess the approach championed by Mr. Greenspan."

Simon Gilchrist, a Boston University economist, agrees. “It would accomplish the goal of giving the public a greater sense of oversight without creating undue political influence ... It would also have the benefit of forcing the Fed to be more articulate about its specific goals and policies,” he said, because it would de-emphasize the power of single chairman.

Interesting. I confess I had never considered it, but I think he's right. Naturally, a central banking system in which interest rates and money supply are manipulated by political appointees can never be independent of politics. But term limits may reduce the special interest pressure.

Another point that Hilsenrath doesn't mention: Because of his failures Fed Chairman Ben Bernanke currently suffers from CYA Syndrome and presides over a highly secretive organization that aggravates this common political illness. New leadership would feel freer to 'fess up and share information, improving the transparency of the body as well.

Independence? Transparency? Bernanke promised both when he took the reins at the Fed. We didn't get them. Term limits may help.

Monday, January 18, 2010

Freudenthal: The Wyoming Caudillo?

According to the Associated Press, Gov. Dave Freudenthal of Wyoming is "still undecided whether he'll seek a third term next year." The problem is, like 35 other states, Wyoming has gubernatorial term limits. He is legally barred from running!

If he jumps in the race, he'll join a growing list of Third World chief executives who are defying their constitutions, not to mention their people, to retain power after their term limit expires. Over the last few years, Hugo Chavez in Venzuela, Evo Morales in Bolivia, Daniel Ortega in Nicaragua and Manuel Zelaya in the Honduras have cast off -- or tried to -- the shackles of term limits intended to guarantee rotation in office.

In the case of President Zelaya, his extra-legal ambitions actually led to a military coup and constitutional crisis last year. So you need to be careful how you do such things. "You need to have thought about kind of how you're going to structure it," the governor told the AP about his potential campaign.

Well, let's see. The governor can appeal to the people, as Wyoming does have a citizen initiative process. But there is not enough time. Plus, there's the pesky fact that approval of term limits in polls have hit all-time highs. No, that's right out.

The governor could go to the legislature and have them change Wyoming State Statute Title 22, Chapter 5, which limits him to serving only eight out of any 16 years. But the Republican legislature is unlikely to ditch a popular law to further the personal ambitions of a Democratic governor. No can do.

Well, there's always the courts. It didn't work for President Zelaya, whose final straw was his standoff with the Honduran Supreme Court. But with the right legal team, a friendly judge and a little flexing of his gubernatorial muscles, maybe he could get the law shot down on technicalities. After all, the legislature pulled off this trick back in 2004, nixing a citizen referendum on term limits that had passed with 77 percent of the vote.

Yes, maybe he could get away with it. But he shouldn't try. In the United States, we take for granted equality under the law and the peaceful and legal transfer of power election after election. In respect for these traditions, Gov. Freudenthal should stand down, thank Wyoming citizens for his opportunity to serve them ... and move on.