Government-By-Spite: Trading Economic Pain for Political Gain

If you have the sneaking suspicion that there are a lot of politicians who aren’t too concerned about how the economy affects real people, you can find two great pieces of evidence today.

First, we head to the U.S. Senate, where Louisiana’s David Vitter is holding up nominees to the Federal Reserve, more or less just because he feels like it. Thanks to Vitter’s hold, the Democratic majority in the Senate can’t approve President Obama’s Fed nominees without getting past a filibuster. That has real consequences:

Leaving the central bank short-staffed deprives it of top-notch monetary policy and financial market expertise that could prove valuable given the stop-and-go nature of the U.S. recovery and economic threats coming from Europe.

It could also undermine the institution’s efforts to get up to speed on regulatory matters now that Congress has vastly expanded its responsibilities for ensuring financial stability.

The board has not been at its full seven-member strength since April 2006, and it could soon be depleted even further.

The Fed could, and should, be doing more to boost the economy, which is still in rough shape. Vitter is perfectly frank about the fact that he wants to prevent the Fed from engaging in the economy any more than it already is. By blocking the Fed nominees, Vitter gets two wins: he gets to frustrate and embarrass the President on policy, while the drag on the economy resulting from the Fed’s inability to act hurts the President politically. It’s a great deal for Vitter, but it works out terribly for the rest of us.

Next, we head to Loudon County, Virginia, where the county Board of Supervisors is poised to kill a major transit project. Washington Post columnist Steven Pearlstein aptly calls it “government by hijacking.” The project, an extension of the region’s Metro system to Dulles Airport, is a cooperative endeavor between federal, state and local governments. But the Loudon supervisors are angry that the rail extension might involve a project labor agreement with local unions (which makes sure that people working on the project get fair wages and benefits).

This decade-in-the-making project would create jobs and boost the local economy. Pearlstein notes that the rail extension was designed based on agreements on funding from governing bodies along the route—agreements that the Loudon supervisors are spiking because they don’t care for project labor agreements. The problem, Pearlstein says, is with “ideological zealots…who are constantly on the lookout for any opportunity to destroy the labor movement.”

In other words, the supervisors are willing to kill jobs and hurt property values for the people who elected them if it means they get to express their hatred of unions in the process. To be blunt about it, this is monumentally stupid, and shows a deep contempt for the people they represent.

We’ve seen this dynamic again and again—in the debt ceiling fight, the highway bill, the Consumer Financial Protection Board, the National Labor Relations Board, and more. Many Republican politicians are so hostile to the basic functions of governing that they’ll take actions that are directly harmful to the economy.

Maybe these politicians, whose salaries we pay, have the luxury of making ideological crusades and personal vendettas their top priority. The people we visit every day—people who are worried about keeping their jobs, staying in their homes, saving for retirement—aren’t so lucky.