Senator Lieberman Addresses Syms
The Syms School of Business community was fortunate to hear from Senator Joseph Lieberman on Tuesday November 17th, where the former Senator from Connecticut and current occupant of the Lieberman Chair of Public Policy and Public Service at Yeshiva University spoke on the topic of "Why American Business Needs a Strong Federal Government, But Not Too Strong.”
Syms Dean Dr. Moses Pava introduced the Senator and noted his years representing Connecticut in the U.S. Senate, and prior to that as a state Senator for, and Attorney General of, Connecticut. In describing Senator Lieberman, Dean Pava cited the words of Pirkei Avot that say, “In a place where there are no men, strive to be a man.” Pava concluded by remarking that on a personal level, Senator Lieberman is a true role model.
Senator Lieberman began his speech with a few light-hearted moments, remarking that the university created the Lieberman chair and then surprised the senator by choosing him for it—much like the way that Dick Cheney was running a committee that was tasked with finding a vice president for President Bush, and Cheney ended up choosing himself for the position. Senator Lieberman added that the university is maximizing his time at YU, allowing him to address different portions of the school in public lectures, and teach various classes.
Introducing his topic for the evening, Senator Lieberman emphasized that the government has an important, albeit limited role in our lives, and that this is something that the founders wanted. Since then, people have maintained a healthy skepticism about their leaders.
In another funny moment, Senator Lieberman relayed a joke initially told by President Reagan that the most terrifying words in the English language are “I’m from the government and I’m here to help.” To further prove this point about the limitations of government, Senator Lieberman cited a story about an official from the department of agriculture who saw his colleague crying. When he inquired why he was crying, the colleague replied that his farmer had died—implying that the man was only responsible for one actual farmer.
In today’s political climate, people have a lot of anger towards government, according to Senator Lieberman. While this is understandable, there’s also a risk that the anger will blind people from the benefits that the government provides, and the way it protects our freedom and economic prosperity. So while Republicans say we need more growth and Democrats say we need more government to keep Wall Street under control, Senator Lieberman believes that there are ways in which the government has reached too far and has hurt economic growth. That being said, the need for some amount of government is clear. Senator Lieberman quoted Rabbi Chaninah, “pray for the welfare of the government, for without fear of government, people would swallow each other alive,” and added that centuries later, Madison talked about this same idea in Federalist Papers 51, that “if men were angels, no government would be necessary.” Senator Lieberman concluded this thought by saying that the Jewish people were freed from Egypt to live under a system, not to be totally free.
Senator Lieberman then enumerated four ways that a strong American economy depends on a strong American government. First is the idea that our respect for the rule of law is a comparative advantage for our economy, since it provides the stability and predictability for those who want to begin a business or invest in a business, whether they’re from the U.S. or not. Our system of law gives people the confidence that a dispute will be adjudicated fairly by a court of law, and it gives investors in America confidence that the government will never nationalize businesses, something that happens in other countries.
The second way that a strong American economy depends on a strong government is that the government’s regulations help consumers. People would be hesitant to buy large quantities of items, or wouldn’t buy items at all, if the government didn’t set standards ensuring quality and safety in the marketplace. Additionally, people have the ability to sue the maker of a product if they feel that they were cheated. Third, is the establishment of a national marketplace by Commerce Clause in the Constitution, which was something that wasn’t guaranteed by the Articles of Confederation when states had their own marketplaces.
Lastly, is the global security and stability that the American military provides, allowing Americans to import, export, tax, and build. Over time, this has helped build the American middle class and has brought people out of poverty around the world. While one might think that in a day and age of amazing technological advancement global commerce is no longer conducted through actual shipping of goods, an enormous percentage of commerce is still global trade by ship. As a result, if the U.S. wasn’t able to keep the Straits of Hormuz or Malaka open, the consequences for the economy would literally be disastrous. On a more micro level, the U.S. military has at times had to help American merchants abroad. Marines were first brought into foreign engagement in 1801 when they went to Tripoli to free a crew of an American merchant vessel that had been taken by pirates.
Additionally, the U.S. has led global trade agreements, which have been critical in establishing world marketplace. By helping create the International Monetary Fund, the World Bank, and the World Trade Organization, the U.S. has created a world economic order of free trade.
Senator Lieberman went into great detail on this fourth reason why a strong economy is dependent on a strong government, remarking that while around election time how the U.S. might take advantage of trade can be controversial, he finds it very simple. The United States’ population is five percent of the world’s population, so we can’t just trade with ourselves; it’s imperative that we trade with others and have them trade with us, even if many of the countries that we trade with have higher trade barriers than us.
Up to now, Senator Lieberman presented compelling arguments as to the need for strong government. But, he also cautioned that strong government in moderation is ideal. Since people run the government and regulating the economy is a human exercise, there’s room for human error. Writing legislation is difficult, and people get the short end of the stick sometimes. Senator Lieberman provided three examples of regulatory imperfection.
The first is the well-known Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly known as Dodd-Frank. This act aimed to reform banking, and attempted to do so by stipulating what seemed like a logical requirement that banks had to have more money in reserve to back up what they were doing in their business. As a result though, banks have only been lending to the actually rich, which has hurt the economy since people need loans and banks haven’t been willing to give them. The second way that legislation has hurt the economy is through legislation that has dealt with ethanol, which has actually been worse for the environment than the recently rejected Keystone Pipeline would’ve been.
Finally, while the government is in charge of implementing laws and regulations based on the legislation and instruction that Congress gives them, they don’t always do such a great job. Congress themselves have come back to override or rewrite legislation that hasn’t shown its intended results, and though the courts have the right to review legislation, because of presumption of constitutionality, courts rarely overturn congressional legislation. As a result, the government’s laws and regulations sometimes didn’t accomplish their intended goal or were otherwise ineffective. In 1980, the government created an Office of Information and Regulatory Affairs (OIRA) to review regulations before they’re put into place, ensuring that the regulations are the best way to accomplish the goal set by Congress with its legislation.
Senator Lieberman closed his speech by quoting the same quote he used earlier from James Madison in the Federalist Papers, “If men were angels, no government would be necessary.” Senator Lieberman wanted to emphasize how critical government is both for the macro economy, as well as for all of us as consumers of goods.