Yves Smith draws attention to some of the machinations in DC occurring under the rubric of bank reform. Specifically in this case, a congresswoman from IL is trying to further erode state power in regulating banks in the name of efficiency -- hey ho. On a personal note of interest from long ago Southside politics, IL AG Lisa Madigan is castigating the idea, which puts me on the side of the Madigans. It really is a shame politics suck so badly in the country, as it really can be a sublimely engaging activity of amusing twists and turns.

Anyway, this issue begs discussion on the much greater issue of the architecture of American government. Separation of powers is one of the fundamental tenets of the American system. In the American federal system, the states provide balance to federal power. With the industrialization of America, power became increasingly concentrated in DC and our mega-corporations, away from the state and local economies. Of course this was a dynamic of necessity, as economic power could only be concentrated with a corresponding concentration of political power. In the American system as constituted in 1787, this meant a loss of power for local and state institutions and a gain for DC. In one of history's great misfortunes, states' power in the US became associated first with slavery and then segregation. So, over time as the Commerce Clause of the constitution, amongst other things, was used to institute mega-corporate control, states rights increasingly became a bad word.

Today, we need to rethink the American system using the basic tenets and principles of self-government instituted two-centuries ago, with the goal of making them relevant in the 21st century. For example, instead of a traditional hierarchical system, how is self-government implemented in a distributed network architecture? In an era dominated by electronic technology can't we create distributed nodes of government connected together in a web framework? What would be the equivalent of states' rights and separation of powers in such a system?

For those still thinking DC is going to offer any answers. I only point to the personification of all that is wrong with American politics -- Barney Frank. Mr. Frank is so conflicted on the banking issue, he couldn't give a straight answer if his life depended on it. As his committee puts forth their dreck of a bill on financial reform, Mr. Frank states about derivative swindling, “There was concern that a broad grant to ban abusive swaps would be unsettling.”(tx george washington) Isn't that the idea Barney?

If you have the stomach, politics does remain high comedy.

• Joe Costello's blog
• Add new comment