Our Incredible Shrinking Democracy

I wish conservatives would stop complaining about big government and start worrying about the real problem – small democracy. I wish we’d all worry more about our incredible shrinking democracy.

It seems as if more and more decisions that should be made democratically are being shunted off somewhere to a few people who make them in back rooms. Which programs should be cut, which entitlements pared back, and what taxes raised in order to reduce the long-term budget deficit? Hmmm. Let’s convene a commission and have them decide.

Commissions are a default mechanism when politicians want to hand off difficult issues to “experts.” But reducing the long-term budget deficit has almost nothing to do with expertise. It’s about our nations’ values and priorities. Nothing could be more central to the democratic process.

Democracy requires at least three things:

  • Important decisions are made in the open.
  • The public and its representatives have an opportunity to debate them, so the decisions can be revised in light of what the public discovers and wants.
  • And those who make the big decisions are accountable to voters.

But these principles are in retreat, and I say this not just because of the proposed deficit commission.

The notorious Troubled Assets Relief Program (TARP) began with a virtual blank check from Congress. Treasury officials then secretly decided which companies were to receive hundreds of billions of dollars. Why these particular entities were chosen and not others remains a mystery. For months, the Treasury didn’t even disclose the identities of the major banks that giant insurer AIG repaid with its bailout money – 100 cents on each dollar AIG owed them.

The Federal Reserve, meanwhile, has gone far beyond its traditional role of setting short-term interest rates. It has bought up massive amounts of debt – mortgage debt, Treasury bills, and debt instruments emanating several public agencies, many of them supporting a wide range of private entities. No one outside the Fed knows the ultimate beneficiaries of all this government backing, the criteria used by the Fed for making these commitments, or even how much debt the Fed is buying.

Even if the economic emergency justified such secrecy – and it’s hard to see exactly why it would – the emergency is over, and yet closed-door decision making continues. Will Treasury use what’s left of TARP to help stimulate more jobs and, if so, how? Will the Fed stop buying mortgage-backed securities? No one knows.

The same pattern is evident on other issues. Congress can’t decide whether or how to limit the pay of financial executives. So where does the issue end up? The Securities and Exchange Commission and the Fed both say they’re going to look at whether pay levels are appropriate. The House and Senate can’t agree on what to do about climate change. Who decides? The Environmental Protection Agency concludes it has authority to regulate carbon emissions under the Clean Air Act.

The debate over health-care reform looked like democratic deliberation until you realize the key negotiations that framed the deal occurred behind closed doors, between the White House and Big Pharma and Big Insurance. The Administration promised these industries some thirty million new paying customers. In return, they agreed not to oppose the plan. Big Pharma even placed a firm limit on how much it would cut its costs over the next ten years – $80 billion, and not a penny more. How do I know this? Not because this crucial deal was made in public, but because it was leaked to the press.

Personally, I want the government to limit the pay of financial executives, regulate greenhouse gases, and reform health care. And no one wanted a financial meltdown. But I’m appalled by the process that’s been used to reach these objectives.

A big piece of the problem is this: Washington is now so overrun by lobbyists representing moneyed interests that it’s become almost impossible to make policy in the open. If the Treasury and Fed tried to decide publicly which industries and firms should get hundreds of billions, they’d be inundated. Wall Street lobbyists are blocking real financial reform. The energy industry has filled the House’s cap-and-trade bill with special subsidies and exemptions. Big Pharma and Big Insurance would have killed off the health-care reform if they hadn’t been bought off. When it comes to the long-term deficit, Congress is incapable of acting because so many special interests have their hands out.

But the answer isn’t to give up on democracy. Back-room policy making can succumb to private interests just as easily as lobby-infested legislatures (much of the public suspects the Treasury of being too cozy with Wall Street as it is).


The real answer is to recommit ourselves to cleaning up democracy. Yes, I know: The Supreme Court’s recent grotesque Citizens United vs. Federal Election Commission, which decided corporations are people entitled to First Amendment protection, complicates this. But the goal is still possible to achieve with more public money for congressional and presidential candidates who refuse private funding, more constraints on lobbyists, tighter rules for who must register as a lobbyist, fuller disclosure, and tougher rules on the revolving door between public service and private gain. Yale’s Bruce Ackerman recently came up with another good idea: A $50 tax credit per person, which they can send to the candidate of their choosing.

Yet nobody seems to be talking about these sorts of reforms. They don’t appear on Obama’s agenda. True, they don’t generate lots of public excitement or appreciation, and they’re murderously difficult to enact. But without them our democracy doesn’t stand a chance.

by Robert Reich

This article first appeared on Robert Reich’s Blog. Republished with permission


  1. Marshall says

    I agree with much of what you said. The TARP money paid back was by law going back into the pot to pay off the debt created by the give away and now someone wants to use that money for something else? Not good. Your thought that big government gives me bid democracy is I believe a false opinion. I believe the more government you have means the less democracy you have.

  2. Virginia Hoge says

    So true! our Democracy is shrinking! We have to fight back, to maintain the democracy that our Country was founded on. Keep up the fight, people!!

  3. in_awe says

    The more government expands into every corner of citizens’ lives and the economy, the more it reinforces the payoff for lobbying politicians and cutting special deals. Whether it involves corporations or SEIU, Wall Street executives or the NEA, money flows to where decisions are made.

    This administration exploded the number of places where money can be leveraged out of the public view through his appointment of non-elected, unvetted Czars and special administrators. Reid and Pelosi took the Obama victory in November 2008 as carte blanche to shut the doors of Congress to the Republicans and the media. Locked conference rooms and no CSPAN, “We won and you’ll just have to get used to it” statements aren’t conducive to doing the people’s work in the public’s interest.

    Obama praised a “green” window manufacturing company that received stimulus funds. No mention was made that it was owned by the husband of one of Obama’s senior green administrators. Cronyism and political favoritism wasn’t invented by Obama and the Democrats, but they certainly haven’t done anything to slow it down. Last weekend Congressional Democrats went to a retreat that included dozens of lobbyists. Guess they missed that part of SOTUS a few days earlier when the days of lobbyist influence were over.

    When blatant corruption is glossed over by Congressional leadership and the voters don’t respond by voting out the corrupt members AND THE LEADERSHIP, we will only see it become pervasive. As Pelosi elevates herself to regal status and insists on transporting her family (even her 46 year old son) and friends on dedicated military aircraft at thousands of dollars an hour as a perk of office, the position takes on a permanent aura of being above the “people”. This whole imperial attitude in DC (and Sacto) must be reversed.

    As to letting grassroots panels decide policy, I’d rather take my chances on a dart board. I live in an affluent area, surrounded by people with above average education and income. I am never surprised at how economically ignorant and politically unaware they are – dangerous enough for elections, but beyond scary for direct democracy.

  4. says

    Reich has identified the problem, but his ‘solution’ – though more radical than 99.9% of would-be ‘radical’ reformers – is too blinkered and will fail.

    Like all other USA vocal ‘reform’ proposals, his too simply calls for cleaner selection of our political oligarchs. The only hope of real solution is to end the constitutionally mandated oligarchy altogether, and replace it with real democracy, the likes of which we’ve never truly had or have even taken the trouble to discuss.

    Democracy gets ever less possible when there are ever more people being forced to delegate political power to the very same size small oligarchy. What’s been forcing this? Not hidden plutocrats (a la leftist dogma) nor leftists (a la rightist dogma) but the oligarchic provisions of the once-advanced but now hopelessly outdated US Federal Constitution and its copy-cat state constitutions

    In 1887, 100 years after the drafting of the constitution, Lord Acton (pithily and famously summarizing what was already known in ancient Athens) noted that ‘power tends to corrupt, and absolute power corrupts absolutely’.

    Precisely! The mechanism behind corruption – and indeed official dereliction of duty – problem is indeed the concentration of decision power: for 300 million Americans (including tens of millions of well-educated adult citizens ready to do their civic duty), just a few hundred in congress and high exec and judicial offices get to make all the decisions. Those few are the ordained gatekeepers over an extended time period, so of course it can be – and for some it is – worth big bucks to buy them.

    This is the case no matter how ‘clean’ are the campaign funds to elect them. Crime and other behaviors result, as well known, from motive + means + opportunity. With decisions centralized in a few long-term power-holders, corrupters as well as the power-holders themselves have plenty of motive, and power-holders have repeated means and opportunities to extort or anyhow invite being corrupted.

    The bigger our population and the better educated, the worse the discrepancy between all of us who could help decide – and the few who are given (by election or appointment) all the power to decide. We have far less democracy now in any one of our states or large cities than did the American colonies which in 1776 revolved against taxation without representation.

    Real democracy would cure most or all of this. It would decentralize decision power.

    For instance, instead of the same few hundred people, hundreds and thousands of different deliberative juries, comprising ordinary citizens recruited for manageable and limited time, would make federal decisions of law and policy – and ditto at state and local levels. And, for due precaution, yet other citizen juries would review each of the decisions, with power to affirm or veto.

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