I know a thing or two about “states of emergency.” Over the years I’ve traveled to — and lived in — several countries where laws have been suspended, liberties curtailed and the executive branch of government has taken direct control over society and economy.
Usually a state of emergency is declared when there is widespread civil unrest, a threatening insurgency or a collapse of government processes. We’ve seen them in recent years in Thailand, Ukraine and other hotspots. They involve troops on the streets, curfews and myriad restrictions on liberty and freedom of movement. They are usually employed by corrupt and unpopular governments to squash popular resistance.
Recently, ex-Federal Reserve chairman Bernard Bernanke proposed that the power to declare “economic emergencies” should be granted to the U.S. president. That is an ominous development … one that should worry you greatly.
Un-Separating the Powers
At The Sovereign Investor, we warn regularly of the threat of “wealth confiscation” by hopelessly-indebted governments. Unlike some other publications who are content just to scare you, we approach this matter seriously. Bob Bauman, a lawyer and ex-Congressman, consistently makes the point that unlike other countries, the robust U.S. congressional system makes a sudden move to take your wealth to pay government debts unlikely. U.S. voters would punish politicians who voted for such a thing severely.
But no such restrictions would apply to a U.S. president with emergency powers, particularly in a lame-duck second term. His or her party might suffer in the next election, of course, but a messianic president might well decide it would be worth it in order to “save” the country.
That’s why Bernanke’s proposal is so alarming. The only thing the U.S. political system has going for it — paradoxically perhaps — is its capacity for gridlock, based on the separation of powers among the three branches of government: legislative, executive and judicial. It’s bad that Congress can’t agree on anything at all, but at least it prevents government from adding more insanity to the legal and regulatory madhouse we inhabit. By giving the president, head of the executive branch, the power to intervene in the economy unilaterally, Bernanke’s proposals would eliminate democratic accountability altogether.
Look Closely: It Gets Worse
Losing Congressional oversight of economic matters to presidential emergency powers would be a bad thing. I doubt that Congress would ever approve of it — at least not willingly. But to my mind Bernanke’s proposal indicates something just as threatening: The increasing arrogance and undeserved self-assurance of our country’s political and economic elite.
Bernanke is basically saying that U.S. democratic systems (as corrupted as they are) can’t be trusted to manage our economic affairs in difficult situations. Instead, he is saying, we should grant king-like powers to the presidency, so that the occupant of the office can exercise his or her independent judgment, free from the interference of the ignorant hoi polloi.
This is a constant refrain in our political culture, and a bipartisan one at that. Many Republicans (and some Democrats) want the president to have similar powers when it comes to foreign wars (except when they don’t: e.g. Libya). For example, as activist Bill Curry has said of Hillary Clinton’s email problems:
“When Clinton does what no other cabinet officer dared do and then offers an excuse as flimsy and annoying as her convenience, she plays into an image that could be her undoing. It’s not the shadowy, secretive Clinton narrative the media loves to push. It’s the true story of the new American oligarchs who play by separate rules; who live privileged lives to which they feel entitled and who condescend to the less educated and prosperous whose expressions of democratic will they trust far less than their own expert knowledge.”
Exactly. If democratic accountability is inconvenient, say Bernanke and others, just go around it. After all, President Obama has done so repeatedly, getting away with it each time.
Not a Bug — a Feature
The truth, of course, is that democratic accountability is supposed to be inconvenient. It’s supposed to make it difficult or impossible for individuals or small groups within government to impose their will on the rest of us. It may appear to be a hassle for technocrats who think they know what’s best for everyone at all times, but for the rest of us, it’s an essential component of our liberty.
So even though Bernanke’s proposal isn’t likely to be enacted anytime soon, the sentiment underlying it is already in play, and it’s dangerous. If anything will lead to wealth confiscation it’ll be this — the substitution of democratic process by individual whim.
It may be closer than anyone thinks.
Offshore and Asset Protection Editor