Submitted by Lune
(N.B.: this post, and a subsequent Part II regarding the legislative process, are focused on the political processes of DC rather than economics per se. However, to the extent that the future of the financial world is now being determined in Washington, I figured there might be some value for Naked Capitalism’s readers in better understanding the processes that are reshaping the economy and the financial industry.)
As the government becomes increasingly involved in the financial world, finance- and economics-types have by now become well acquainted with America’s answer to Japanese Kabuki: the Congressional hearing. Just as Kabuki is famed for its focus on dramatic poses and stylized maneuvers over story or plot, so the modern Congressional hearing now appears to be nothing but a set of ritualized maneuvers and poses (such as the Feigned Outrage, the Somber Gravitas, and the occasional Sleepy Grandfather), performed for the audiences, followed by a quick exeunt with little insight gleaned into the topic at hand.
While both can be highly valued for their entertainment value, Congressional hearings are supposed to have a higher purpose. That hearings have degraded so egregiously is indeed troubling. Yet to really understand the problem, one must place hearings within the context of the larger issue of how Congress informs itself about the issues of the day and uses that information to create policy. In that context, the Congress of today is doing both better and worse than the Congresses of before.
But first to answer the pressing question of the day: are hearings today really so much worse than hearings of yesteryear? Yes. At least the ones we’re interested in. And that’s primarily for two reasons:
1) C-SPAN: Hearings used to be about allowing Congress to gather information from experts / relevant sources so as to inform a committee’s actions; and in the absence of any means to score direct points with the public, that’s what most hearings used to be. But with the intense media coverage that important hearings get these days, they’ve turned into nothing more than scripted media events, with witnesses called not for their ability to illuminate an issue but to make political points, and questions and opening statements all crafted beforehand by staff and fed to the Congressperson for recitation (with appropriate Kabuki-esque melodrama) in front of the cameras.
That said, even today, not all hearings are that bad, for the simple matter that the vast majority of hearings get almost no media attention. Congress holds probably a dozen hearings a day when in session, most of which get dutifully taped by CSPAN and filed away in archives with nary a viewer or listener outside the beltway. You can get the schedule for any given day on THOMAS (and yes most of the hearings are as painfully boring as their titles imply…). In my experience, the hearings with the least amount of public interest tended to be closest to the ideal. While the topic may be mundane or arcane, without the pressure of media attention, there’s usually much more of a focus on gaining information. Unfortunately, this means that the most pressing issues of the day, generating the most public interest, tend to get the worst kabuki-type hearings, while the ones of least public interest are conducted in a more worthy fashion.
2) To counterbalance this tendency, however, Congress now has immeasurably better ways of gaining information than conducting hearings. Hearings were a relic of a time before telephones and rapid transit, when no piece of information traveled faster than a horse, and when just getting the experts together for a frank and spontaneous exchange was no small feat. These days, if a Senator wishes to speak with a panel of economists, he could get them on a conference call, if not have them fly in for an impromptu private discussion (not to mention he could read all their papers without having to meet them at all). In other words, part of the reason hearings have become so worthless for their original purpose is because their original purpose is often better served with more modern methods of information gathering.
A useful analogy is to the Library of Congress: originally the LoC was chartered to serve as a central repository of all the world’s information so as to make it easily available to Congress. At the time of the LoC’s founding, if a Congressperson was interested in an issue and wanted to learn how it affected both California and New York, and also read about how France and Britain addressed the same problem, he could write letters to a dozen libraries and government archives around the world, then wait six months as the requested materials slowly arrived, all the while hoping that there wasn’t some critical source that he didn’t know about and consequently didn’t request. Thanks to the LoC, he could instead send one request, and the LoC would search its extensive holdings that it had already painstakingly gathered, and send back an extensive (and frequently exhaustive) package of materials within a few days.
But now, when much of the world’s information can be looked up instantaneously on the internet, a Senator’s access to Google and LexisNexis is far more valuable. Yes, the LoC is still unbeatable when you need to hunt down some obscure or ancient source, but for the important issues of the day, the LoC is no longer needed.
On balance, the volume and quality of information available to Congress now, when all sources are taken into account, are vastly better than they were decades ago. It’s just that hearings are the public face of that information-gathering process, and they have degraded as they’ve become less useful.
So to answer our original question: are hearings useless these days? For the important issues of the day? Yes. But to address the broader point, does Congress have better or worse access to information than before? Undoubtedly better.
And now for a more subtle question: for all this extra information, is Congress actually better informed than before? Not necessarily. And that brings up the final wrinkle in Congress’s information gathering process.
As information has become more voluminous, specialized, and complicated, Congress very rarely uses primary research, since most elected officials and their staff are not academics or able to keep current with nor understand academic research. Conversely, as the process of legislating has become more complex, fewer researchers have a feel for how to translate their findings into policy proposals.
I’d assert that as a result, most staffers in DC get their policy ideas not from original academic work but from think tanks (a term I apply broadly to many foundations and public interest / advocacy groups). This isn’t because staffers don’t value academic work, but rather because it’s frequently difficult to translate academic findings and recommendations to fully fleshed out, politically viable solutions. And that’s frequently what think tanks do.
For example, an academic publishing a paper on the harmful effect of options volatility isn’t nearly as useful as an economist in a think tank who takes that paper and drafts a proposal for changing the CFTC guidelines to reduce that volatility. The academic economist usually doesn’t understand specific CFTC rules (although they probably understand the general regulatory environment), and the staffer usually doesn’t understand the arcana of Black-Scholes equations (although they probably understand the concept of options volatility and its side effects). The think tank economist can bridge that divide.
While this is all well and nice, lobbyists have figured out this weak link, and have taken advantage of it. While it’s fairly difficult for lobbyists to influence academic work (thanks to the long histories of most reputable departments, tenure, peer review, and the inbred nature of the ivory tower), it’s very easy to influence think tanks, and even set up whole think tanks for your own purposes. The conservative movement, for example, figured this out, and rather than fight for influence within “liberal” academic departments, created think tanks like the American Enterprise Institute, the Heritage Foundation, and the Cato Institute to bypass academia.
This hasn’t gone unnoticed by other lobbying firms. The most sophisticated lobbying efforts now center around surrounding policy makers within a world created and sustained by the lobbyists themselves. Thus, you have lobbyist-funded original research in academia, lobbyist-created think tanks translating that academic data into legislative proposals, lobbyist-sponsored mediagenic experts to go on TV / newspapers advocating those proposals and setting the terms of the debate, and lobbyist-generated astroturf (i.e. fake grassroots) campaigns to simulate voter approval and public pressure. Quite a far cry from when lobbyists literally just stood in the lobby of the Senate floor begging for a few minutes of the Senators’ time.
So in summary, hearings have become media non-events because they have been supplanted by more modern information gathering tools (while becoming more useful as PR thanks to CSPAN). The rise of those tools means Congress has access to more and better quality information than ever before. Yet the increasingly specialized and complicated nature of that information (and of the policy process) means there is a longer pipeline to digest that information and translate it to public policy. And finally, the longer that pipeline grows, the more vulnerable it has become to influence from lobbyists and other groups.
How this and other changes have affected the legislative process will be addressed in a subsequent post. Stay tuned!
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Congress has faster connections to lobby groups and then their PR people, who smooth over the bumps in the roads that snake towards progress.
See: "Earlier this week, a bipartisan group of 10 members of Congress sent a letter to Federal Reserve Chairman Ben Bernanke, questioning whether Goldman Sachs is being too lightly regulated and too generously backed by taxpayers.
An idea for taxing high-value health insurance plans has even become known on Capitol Hill as the "Goldman Sachs tax," after criticisms of its executives' $40,000 health plans. A Goldman Sachs spokesman declined to comment on the criticisms from Congress."
Lune – Thank you for the well-written and educational article on the Congressional hearings Kabuki. Very informative.
I have third pet peeves with the Congressional hearings. First, there seem to be too many committees with overlapping or redundant jurisdictions within each house (House and Senate) of Congress, resulting in duplicative hearings that waste time and waste resources for everyone involved. Then when the duplications of the House are added to the duplications in the Senate, the total waste is enormous. It would be nice to see the House and Senate each reduce its own duplication. Then, would it be wishful thinking that the House and Senate committee of jurisdiction would hold a joint House-Senate hearing?
Secondly, some House committee hearings look they have 20 or 30 or 40 members. This large number of members might be justified if the House did not have so many overlapping or redundant committees, but it does appear excessive when there are so many redundant committees. When each member is limited to 5 minutes or less to question panel members, it looks like a superficial rush job, not an in-depth deliberative process.
Thirdly, it is amazing how one or two or three committee members will ask the same basic question that panel members have answered repeatedly just a few minutes before. This indicates some committee members are 1) lost without staff notes, and can not think for themselves, or 2) not listening to the panels answers.
tom a taxpayer (auto sign in not working tonight; forgot my password)
Cheers Lune. I liked the way you brought in historical context.
Along with information flow, I hope you'll also address the people flow among congressional staff, regulatory agencies, think tanks, corporations, lobbyist firms, academia, and so on.
That was serendipitous. Check out the post I made on another blog yesterday:
"I had to do it. I went back through the news to try to find the first use of "Kabuki Theater." Suspected that it came out of the world of cloak and dagger, and it could very well have. The earliest use I can find was this:
http://www.time.com/time/magazine/article/0,9171,926603-14,00.html
So Robert McNamara's flunky, Les Aspin, might be the fellow that took this term public back in 1984. It really didn't hit its stride until the 90's. In 1989 a fellow used it in a WaPo article, but felt obligated to explain what he meant by it."
As far as the purity of academia — good one!
Follow the money — NBER, NSF, CEPR, etc. You'll be surprised where it leads. Or maybe you won't be.
During a televised interview Marshall McLuhan once remarked to his interviewer (Mike Wallace or someone like that) "If we turn off our microphones our relationship changes instantly."
Consider the effect of TV on political conventions: what were smoked-filled rooms and multiple ballots become crowning ceremonies.
The cameras and microphones change everything. Normal reality becomes reality TV, and all the world becomes a sound stage.
Such hearings are not meant to inform Congress and will not inform the public (most of which, sadly, has no interest in being informed), but will may give many a false impression of being informed.
"modern information gathering tools"
That might be the best definition ever for a lobbyist.
Boxes of hammers.
bob
This is just a result of the lack of a free market mechanism in politics.
You should be able to bid on votes.
There should be a tally for just how much money the banks are willing to spend to stave off more regulation.
The fed cannot place a floor.
I have always thought, from a purely profit prospective, that there is no better ROI than a good payoffs.
Congress persons are very cheap, the decisions they make are sold for 2 or 3 cents on the dollar at best. Inefficient market clearing.
The worst questioners on the planet are found in the House. They combine bone-ass ignorance with general dimwittedness to a degree that has to be experienced to be believed. The second worst are in the Senate where bombast is taken as some God given right.
Most Congressional hearings are not informative on the issues, but are in terms of those who participate in them, both witnesses and Congress members. Republicans are just as crazy as I expect them to be, but in many of the finance hearings they ask far better questions than the Democrats (trying to cover for Administration policy) do. Barney Frank and Chris Dodd cratered in my opinion when I heard them talk about finance.
Yes, Congress people have access to great resources. They have staffs and of course there are always the lobbyists. But to paraphrase, you can take a dumbass to an idea but you can't make him think it. Hearings often show that committee members don't know what they are talking about even in fields in which they are supposedly expert.
I suppose it would be easy to blame CSPAN. The reason, btw, that the same questions keep getting asked is often because members show up, ask their questions, and leave so they never hear what other members have asked. But to get back to my point, from the blogs I frequent, people who call and talk to staff and/or Congress members often relate that they are unaware about important parts of legislation or actions that have been taken or events or statements that relate to them. I am not talking arcana here but material that is widely known and discussed. So it really isn't CSPAN making them look uninformed. They often are uninformed. Realizing this, and that they are bought and paid for, explains a lot about why the Congress' main product is bad legislation.
I worked on the Hill for many years, having left about twenty years ago. My last boss told me, "Congress is like a bumble bee: Aerodynamically, it should not be able to fly, but somehow it does." I replied, "Agreed, but it certainly can sting." I used to arrange hearings in order to gather valuable information, but even then, many hearings were certainly arranged largely to touch the political bases. The real work (or crimes!?) of Congress takes place out of sight and out of mind of the public. Matt Taibbi recently wrote something indicating that "government no longer protects people from the interests, it protects interests from the people." Sad to say, it appears to be all too true. You know, folks constantly tout education as the most valuable investment we can make in our future. Well, Congress and the White House are certainly populated by perhaps one of the most "educated" classes in history. To me this simply disproves the theory of education's benefits. Unaccompanied by wisdom, which our society denigrates, all that educational experience in D.C. largely serves to construct illusions, not knowledge … which gets us back to where we started, the theater of congressional hearings.
"C-SPAN: Hearings used to be about allowing Congress to gather information from experts / relevant sources so as to inform a committee's actions; and in the absence of any means to score direct points with the public, that's what most hearings used to be"
I am chagrined – in my naive youth I thought C-SPAN was helping to inform the people. But complex issues are gray, and boring. C-SPAN does nothing for the serious, and gives blowhards a microphone.
Unintended consequences.
As a WDC area resident who has seen politics (especially on the Hill) up close & occasionally participated at the fringe, the Kabuki analogy is perfect and has been for at least a couple of decades.
It is all about appearances–especially for the voters back home, but maybe a national audience if one is trying to climb the Byzantine political ladder of Congress. One must appear thoughtful, knowledgeable, forceful, patriotic, partisan (big time!), even when one doesn't have a clue what's going on. This is especially true in legislating economic policies.
The only thing that saves us is that there are more than 500 of these fools on the Hill who, in the end, have to show something for all their blustering–or not get re-elected, which is their sole reason to exist.
I remember when Newton Minnow said that TV was a vast wasteland. Someone else said that TV is furniture. For those of citizens that are bedridden or those who choose, C-Span, CNN, CNBC etal are nothing more than venues for self appointed experts and nincompoops. The blogosphere is quite similar to TV, but here and there lie bits of cogent stuff worthy of consideration. Our poltroons have become such because we have asked them to. Want a better and less intrusive government, demand it! Our current financial distress is problem which in great and small ways was created by us all. It is true that larger culprits reside in the Congress and Financial Institutions; nonetheless, we have been largely willing participants. In the coming mid-term election we, the body politic, might be well advised to simply vote the current incumbents out. As to Kabuki, to compare the televised sessions of Congress and related Hearing to Kabuki is to insult Kabuki. Stylelized as it may be, kabuki is a legitimate divertisment.