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The Candidates and the Crisis--Skeel

I wasn't among those who were disturbed about the increasingly trivial bickering between Senators McCain and Obama until the tumultuous events in the financial services markets over the past several days. I'm now greatly disturbed, because I fear that a great opportunity for better government may be lost.

When Franklin D. Roosevelt campaigned for the presidency in 1932, he promised to do whatever it took to counteract the financial effects of the Depression. When he came to Washington, many of the best minds of the generation came with him or advised him. (Hard as it may be to imagine now, this included numerous law professors, people like Felix Frankfurter, James Landis, William Douglas, and others). They experimented with many different forms of regulation, at times contradicting themselves, but emerged with the securities and banking framework that governed the markets for the next seventy years, as well as our social security system.

In my view, we are in an increasingly similar position now.

It's clear that we need, among other things, a new regulatory framework to handle the dramatic recent changes in financial services, where lending is now done as much by hedge funds and through derivatives transactions as with traditional bank loans. But no one has a silver bullet for just what the regulation should look like. The best hope, in my view, lies not so much in any particular proposal, as in a general climate in which many of our brightest young minds feel a call to go to Washington, to work in our regulatory agencies and other government positions in the hope of helping in some small way as we try to come up with solutions.

This is not the ethos that prevails now, at least judging from the law students I see at my school and other schools. The government is just about the last place most of my best students think about going, not the first. There are many reasons for this, but one of them, in my view, is the absence of an ethos of government service.

Of the two candidates, McCain seems less likely to me to be the source of a call for change in this respect. Although he deeply believes that we should put our country before our individual interests, McCain's emphasis has always been on attacking entrenched interests in government, rather than building up a higher quality of government servant. But even if he were inclined to issue a call to serve in Washington, the politics of the moment make this very difficult. Obama would immediately link this to the Bush administration, and insist that a McCain presidency would mean four more years of ideological governmental hiring.

A call to government service is a much closer fit with Obama's political inclinations, but I worry that the politics of the moment will prevent him too from issuing such a call. The danger for Obama is that a call to Washington would be attacked by McCain as simply further evidence of Obama's elitism. McCain would frame the call as putting eggheads in charge of Washington so that they can make the rules for ordinary, hardworking Americans.

During the New Deal (and during the generation before, with the Progressive movement in the early 1900s), the emphasis on regulatory expertise, and bringing the brightest experts to Washington) did too often smack of elitism. The experts' view of ordinary Americans was patronizing at times, sometimes astonishingly and unselfconsciously so. But overall, the business and financial regulation they achieved was, in my view at least, a remarkably successful achievement. Creating a new ethos of government service now wouldn't guarantee success, but I think it would make success much more likely.

At the moment, at least, it's hard to imagine such an ethos emerging. I hope I'm wrong. McCain and Obama agreed to a ceasefire on September 11, in order to honor those who died in the tragedy. Perhaps they could agree to a similar ceasefire on the issue of Washington service, agreeing to disagree about the best solutions to our ever-deepening financial crisis, while speaking with one voice about the need for our brightest young people to consider spending time in the nation's capital.


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Comments ( 5 )

Bravo on your call for a government ethos, but on what will the ethos be based? Certainly not on one's confidence in government or those who advocate bigger government. Jonah Goldberg's "Liberal Fascism" seems to make a compelling case that New Deal type intervention is contrary to the best interests of our democratic republic.
One other question - what sort of ethics courses do law schools offer?

Fair questions. I don't think that good government necessarily means more government, although I think the reality is that we won't be getting lots less under any president in the next few years. FDR's world was quite different than ours in that substantial federal intervention was new in his era. Like it or not, we have it now and most of it isn't likely to go away. The question is what to do to make a very flawed regulatory system better. I don't think any one has the answers at this point. My hope is that many of the best young minds we have will seriously consider participating directly in the effort to find some, and simply to improve the quality of our governmental agencies.

On ethics, law schools require their students to take a professional responsibility course, and many of us try to include ethics in our other courses. But I'll be the first to admit, I don't do nearly enough.

Regarding the ethos of government service (or lack thereof) in today's law schools, it might be worth pointing out that Joel Seligman's book "The High Citadel" noted this trend back in the 1970s. He lays much of the blame (as I recall) on the changing priorities at the elite schools. Blame aside - it seems this trend has been in the works for a while.

Coming out of U. Penn., going in to government service would be a lot easier if the cost of attending Penn. didn't add over a $100k in debt to any given student.

A good country leader is said to be characterizing of having a strong public relations, idealistic in his political agenda and a heart that is caring for the wellness of the community and society.

Do you think America is better off in 2008 than in 1932? It depends who you ask.
In 1932, Franklin Delano Roosevelt was elected president, and took over during a time when the economy was nose diving into a recession. FDR introduced his “New Deal,” which drastically changed the government’s approach towards the U.S. economy. The government’s new role in the economy was much more involved than it had been previous to FDR. Roosevelt's “deal” revitalized the economy in the short run, but some argue the negative repercussions can still be felt today. In this Wall Street Journal article, Paul Rubin writes that although the present U.S. economy is not identical to the economy of 1932, there are many parallels: the stock market is faltering, credit markets are locking down, and a popular Democratic presidential candidate – Barack Obama – is advocating for increased government regulations in the economy. If Obama becomes president and the Senate is controlled by democrats, our country will face the most liberal agenda in its history. Free market economists are concerned with Obama’s “hands-on” policies and fear they steer the American economy off-course in the long run.

Proponents of capitalism will disagree that we’re better off today than in 1932. On the contrary, they would most likely tell you that America is in for more of the same – a “New, New Deal.”