Well I'll be damned; the WSJ finally published a piece on this.
No one doubts that the coming election will be the most important referendum on the size and nature of government in a generation. But another issue is nearly as important and has gotten far less attention: our crumbling commitment to the rule of law.
The notion that we are governed by rules that are transparent and enacted through the legislative process—not by the whims of our leaders—is at the heart of that commitment. If legislators exceed their authority under the Constitution, or if otherwise legitimate laws are misused, courts must step in to prevent or remedy the potential harm.
During the 2008 financial crisis, the government repeatedly violated these principles.
Mr. Skeel goes on to argue that the 2008 crisis was where these problems reared their head.
He's right that these issues become more serious in 2008, but he's dead wrong that this excuse -- that "in a crisis you do what has to be done, law be damned" began this series of abuses.
Leverage in fact contains an entire chapter on this subject in the second half of the book ("A Way Forward") entitled, appropriately enough, "The Rule of Law." In it just some of the myriad abuses that were rampant not only during but prior to the 2008 panic are laid out in a fair bit of detail. The Market Ticker has chronicled many more.
Some of the worst abuses are found in what the government claims are laws but are in fact suggestions, as there is no penalty. Let's simply take The Federal Reserve Act which mandates, among other things, that The Fed shall conduct monetary policy so as to produce stable prices.
The word "stable" is a common English word. It is not a matter of interpretation, it is a matter of a factual condition that either exists -- or it does not.
For 100 continuous years The Fed has violated this mandate -- a black-letter law.
It has never been held to account and not one candidate for President -- not Obama, Romney or Johnson has come out and said "these alleged laws, such as The Federal Reserve Act, which contain no penalty for non-performance or indeed intentional violations must have violations enforced and penalties must be added to these statutes.
Is it not proof of actual intent to not enforce the law when you enact a so-called "law" without a penalty for its violation? Is it not proof positive that you intended no such law be in force at all when you willfully and intentionally ignore one hundred sequential years of violation of the very law you pass?
This isn't complicated folks -- there is no intent by our government at any level -- federal, state or local -- to actually follow and enforce the law on an even, honest and level basis.
Oh yes, it's gotten much worse in the last four or five years, but do not kid yourself -- this is not a new problem. Passing alleged "laws" that are supposed to proscribe conduct for everyone and then ignoring them when the government wants to is nothing new. We have run drugs in both the United States and abroad -- our government -- for decades and we're still doing it today. We ran over a thousand guns to Mexican Drug Cartels -- intentionally -- in "Fast and Furious" (otherwise known as "Operation Gunwalker") and not one BATFE or other Federal employee has been indicted or jailed for doing so.
Not one bankster went to prison when Wachovia laundered money for Mexican drug cartels -- and they admitted it (in exchange for a fine and a "deferred prosecution agreement.) Multiple banks ran money for Iran and intentionally altered transaction data to obscure who the transfers were for -- yet at most they've been fined and nobody has gone to jail. In Jefferson County Alabama the residents are still paying radically-jacked-up sewer and water bills and will be forever, despite the fact that a few municipal employees went to jail for bribery-related crimes on those transactions. The number of banksters jailed? Zero. Last time I checked in order to receive a bribe someone must make one. Isn't it funny how only certain people got prosecuted and imprisoned?
I'm glad to see the WSJ publish this opinion piece, but Mr. Skeel needs to widen his lens a bit and look at the problem from more than simply a "crisis-mode" intervention issue, because it most-certainly was not and is not today.
