THE National Security Act of 1947, a reorganization of the foreign-policy and military apparatuses of the U.S. government, created what historians call “the national security state.” Critics complain that the national security state vastly empowered government and cut the executive branch loose from legislative accountability. It marked the beginning of a hyperactive interventionism abroad.
Domestically, all the same criticisms apply to the consequences of the Troubled Assets Relief Program, which marks a new era in American economic policy just as the 1947 act did in foreign policy.
Since last fall, we have seen the rise of the TARP state — characterized by sweeping interventions in the economy undertaken by the executive branch on its own authority or in defiance of the legislature….
Whatever he thinks of Obama’s policies, former Vice President Dick Cheney should be delighted as an advocate of executive power. Obama has pocketed, in fact or in theory, all the presidential war powers defended by President George W. Bush, while expanding with relish the executive’s role in the economy. In Obama, the national security state has met the TARP state.
The national security state is necessary given America’s pre-eminent global role. And some sort of rescue had to pass during last fall’s financial panic. But TARP has become a disgraceful transgression of democratic accountability and the wedge for a retrograde, highly politicized industrial policy. Nothing good can come from the TARP state.