This is from Chapter 1:
A Republic flourished politically and culturally for centuries, until a slow corruption of public life by private concerns destroyed it. This republic sustained itself for as long as it did because of the moral habits of private men in their public roles, not because of the brilliance of individual leaders. Its decline, according to a famous interpreter, came from the power and increasing corruption o an elite group who had the power to remove its most powerful citizen. These guardians became increasingly involved in intrigue and abuse of power, lost a sense of civic virtue, and in so doing, lost the republic.
The republic was Rome, and the famous interpreter was Edward Gibbon, whose book The Decline and Fall of the Roman Empire was published in phases as the Founders worked on the constitution. Teachout tells us that they were well aware of Gibbon’s work, and tried to avoid the outcome he describes. It was an article of faith with the Founders that people could separate their private lives from their public responsibilities, that they could act in the interests of all rather than in the interest of themselves or their hidden sponsors. Of course, that is an ideal, not necessarily a real-world outcome, but they built in what they hoped were enough checks and balances that the system could withstand a few bad apples. For example, the House of Representatives has a large number of members from relatively small districts, so that if one or a few were to sell out, the rest would outvote them.
Teachout contrasts this view of corruption as using office for personal benefit rather than public benefit with the Supreme Court’s Citizens United decision where corruption is defined as bribery, as a quid pro quo of money for favors. Justice Kennedy says in the 5-4 decision: “For the reasons explained above, we now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.“ There is a huge body of work showing just how inane and foolish, or worse, this bizarre sentence is, some of which I reviewed here.
What the Supreme Conservatives are saying is that there is no such thing as public morality, no such thing as trying to act in the best interests of the nation. What they are saying is that there is a marketplace of ideas, and the best will emerge from the rough and tumble of private interests. That is, I think, a fair statement of the outward justification of the neoliberal state. Of course, the reality is that the ones with all the money can and do drown out everyone who disagrees with them on pretty much any given issue. And that is the hidden justification for the neoliberal state.
One obvious sign of the decay of public morality is the revolving door from Goldman Sachs to the New York Fed and the Federal Reserve, most recently in the news because one of the revolvees got caught with confidential Fed documents provided by someone at the NY Fed. Of course, if he had not gotten caught with documents, but limited himself to a private meeting where he took good notes, he would have been just fine.
The Supreme Conservatives would not consider this to be bribery, though, because there is no quid pro quo. The insider at the NY Fed who gave the documents to his buddy did not get paid, and wasn’t promised anything. It was just a friendly hand up for a good guy getting started in a new job. It wasn’t corrupt to Anthony Kennedy, just good business practice in the marketplace of ideas. In fact, it isn’t clear it’s a crime at all, according to the New York Times Dealbook story.
The Supreme Conservatives would obviously see no issue with the fact that the President of the NY Fed, William Dudley, is the former Chief Economist at Goldman Sachs. They wouldn’t care that bankers elect six of the nine directors of the NY Fed, and the other three are appointed by the Fed itself. In other words, the banks elect their own regulators. The Supreme Court wouldn’t have a problem with that either. As Dudley says, he’s a fire warden, not a cop on the beat. The Wall Street Journal quotes him explaining this bizarre idea:
“I don’t think our primary purpose as supervisors is a cop on the beat,” he said.
The New York Fed’s job is mainly about “ensuring the safety and soundness of the institutions that we supervise,” he said.
The Dodd-Frank financial regulation law gives the Fed much more regulatory responsibility, which they are exercising with the help of input from their friends in the banking business, when they bother to regulate at all. I know I feel a lot safer with Dudley uncorruptly making sure Goldman Sachs doesn’t set the financial world on fire.