STATES RIGHT ON STATES’ RIGHTS
Topic: State and Local Government, Government in My Backyard (GIMBY), The Forum15. August 2008 |
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The phrase "states’ rights" is usually associated with the days of segregation, Jim Crow laws, and the Civil War. But states’ rights are assuming a whole new identity in the wake of the Bush administration’s anti-regulatory legacy. And when the states have more leeway to shape government, they often come up with solutions that can be good for the whole country. Folks down home often see things that Washington big shots miss — or don’t want to see in the first place. Michael Hirsh writes in a recent Newsweek about how former governor of the state of Georgia Roy Barnes foresaw the foreclosure epidemic and tried to stop it from happening in his own state. Barnes wanted to do something revolutionary: make lenders liable for issuing unethical or inappropriate loans. But then Fannie Mae and Freddie Mac started camping out in the governor’s office.
Representatives of the nation’s largest publicly-funded private corporations told Barnes that if he moved this legislation, Georgia would become a "financial pariah" and an "’island that has no credit.’" Barnes, for his part, told the bankers they were "’in for a crash here."
Barnes and others — Hirsh notes that California also tried to change lending standards — knew the dangers of subprime and mortgage securitization because people were already foreclosing at dangerous rates in the early 2000’s. State and local governments saw the suffering long before the national media and Washington politicians picked it up. But aggressive lobbying by Fannie and Freddie — not to mention government regulators — convinced the Georgia legislature to vote the reform legislation down. And the foreclosure rate started to go up.
What if Georgia had been allowed to take this risk and take the lead? It’s hard to believe that banks would have stopped issuing mortgages in the nation’s ninth largest state. What if the EPA had allowed California and sixteen other states to set their own clean air standards in 2007? Things would have been complicated, but the world would not have come to an end. So perhaps piecemeal change led by individual reformers should define "states’ rights" for the next generation.
Ned Hodgman
understandinggov.org
Another fascinating note. What indeed would happen if ’states rights’ became more of a reality? We’re so used to thinking of the phenomenon in intransigently negative terms…
comment at 24. August 2008
I feel like I missed something here. In all seriousness, if “states rights” are considered to be a bad thing, that phenomenon may not extend beyond the Beltway. States rights are why there are no self-serve gas stations in New Jersey, people of the same sex may marry in Massachusetts and one can essentially walk into a CVS and purchase a handgun in Texas. States rights are essential to harmonizing basic differences in this vast country.
States rights are also alive and well when it comes to the sale of securities and other financial instruments. It is unfortunate the Gov. Barnes lost his nerve and failed to follow his instincts. Had he successfully exercised these powers, Georgia would then have been illustrative of the wisdom and utility of the application of such rights and thereby benefited in a variety of ways. Conversely, not possessing the lawful right to pump one’s own gasoline at a filling station in New Jersey is probably not attracting many new residents to the Garden State.
comment at 11. September 2008
States’ rights were a buzzword used to describe opposition to civil rights reform in the 1950s and 1960s, and they’re a staple of debates in Congress on a host of issues. (Some historians say Reagan’s embrace of the phrase helped him win in the South and firmed up the Republican Party’s hold on that region). But I think states have had to lead the way in the last eight years (at least) with an intransigent Washington that often has no interest in executive action. The best example of where states’ rights (actually, 17 states and counting) are being stymied is in the California-led effort to press for stricter emissions controls on cars and trucks.
Guess not being able to pump your own gas really puts a bee in YOUR bonnet, eh, Ender?
comment at 11. September 2008
Jest if you will, but imagine a state without ATMs… that’s kind of what it feels like not to be able to pump one’s own gas. I wish I was better informed on this, but the Founders frequently touted the “laboratory” utility of states rights, and it is a very apt description. Is that term still in use, and if so, does anyone really understand it?
comment at 11. September 2008