There’s been a lot of attention on the implementation of the Recovery Act. But it’s only half the action. We’ve recently published several reports on the implementation of the bailout provisions, which in some ways may have a longer-term effect on the U.S. governance system.
Our most recent report, “Governance Challenges and the Financial Crisis: Seven Key Questions,” by Terry Buss and Lois Fu, is based on a roundtable co-sponsored with the National Academy of Public Administration. It raises big questions triggered by both the financial meltdown and the federal government’s response:
- How should the terms of the social contract among government, business, civil society and the American people be redefined?
- What is the new global role for the United States in the wake of the economic crisis?
- What structural changes in the financial system should be made to foresee, prevent, and respond to future economic crises?
- What should be done to improve congressional oversight and expertise?
- Is it time to re-examine the distribution of roles, power, and authority among federal, state, and local governments in light of the financial crisis?
- How do we strengthen transparency and accountability?
- What is the government’s exit strategy from various sectors of the economy in which it has intervened in response to the financial crisis?
With respect to the last question, the IBM Center has sponsored two other reports:
“Strengthening Government’s Ability to Deal wit the Financial Crisis,” by Tom Stanton. This report examines how the financial crisis evolved and recommends a number of steps, including enhancing government’s institutional capacity to respond effectively. Steps include giving the Federal Reserve the responsibility for monitoring and addressing systemic risk, ensuring the Federal Housing Authority and Department of Education have the capacity to support their markets, and ensuring cross-agency coordinated actions via working groups.
“Managing a $700 Billion Bailout: Lessons from the Home Owner’s Loan Corporation and the Resolution Trust Corporation,” by Mark Cassell and Susan Hoffman. This report examines the strengths and shortfalls of these two organizations in order to frame the discussion of what operational capabilities the federal government may need to create to succeed in its current financial crisis. These include issues such as the type of organizational capabilities and expertise it may need to carry out new responsibilities. . . and then how do you unwind the government’s role and return responsibilities to the private sector once the crisis is over.
These reports help frame the Obama Administration’s next steps in responding to the current economic crisis – by looking beyond the policy implications to the governance implications.