With just over a week left until mid-term elections, races for the many governorships and Congressional seats at stake are kicking into high gear. In races that are particularly close, the campaigning is getting savage and expensive, with huge media buys being carried out by both parties. Really, this is nothing new for election-time, but the intensity with which it’s all happening make this mid-term, essentially, a vote of no confidence on healthcare reform and perhaps to a lesser extent on financial services reform. It is certainly a no confidence vote on record, trajectory and future plans of the Obama administration and the Democrat-held Congress, and frankly, that’s a good thing. Any time that much power gets concentrated within a single party, you have the chance for huge things to get done. But huge accomplishments by our federal government aren’t always a good thing, and at the very least, it merits vigorous debate, criticism and detraction. After all, if a legislative majority as lopsided as our current federal scene cannot withstand the energy of its harshest critics, then it never deserved its power in the first place.

With years of implementation left to go for both healthcare and financial services reform, we really don’t know how these sweeping initiatives will affect our day to day, especially on the business side of things. Already, however, we can see that big changes are afoot; the advent of the Federal Insurance Office, the Financial Stability Oversight Council, the requirements for medical loss ratios, and the fiduciary standard are all evidence of that.

That only fuels the deep sense of uncertainty that is keeping our economy in the doldrums and the increasing dissent among voters that the boys and girls in Washington should have had more to show for their efforts than what they currently have. To be fair, they have been busy on the Beltway, but there are more than a few people (read: tens of millions) who strongly feel that Congress hasn’t just been wasting it’s time, it’s been doing worse: making a full court press to create bad law.

Dictionary Series - Politics: impeach

With that in mind, is it really so surprising that the Tea Party is figuring so prominently in these upcoming elections? Hated by liberals and even by a good number of moderates and old school Republicans, the fiery Tea Partiers exemplify the kind of reaction I think we’d find whenever our government is seriously dominated by a single party and manages to enact huge legislation as a result of it. Frankly, we saw much the same during the Bush years, though it was even more grass roots, in the form of Internet dissent, political satire (ala The Daily Show and the Colbert Report) and the polarization of media brands (MSNBC, perhaps?) that, having been branded as liberal sympathizers for so long by Capitol Hill conservatives and FOX News, that they decided to chuck any pretense for objectivity and become officially partisan. With the Tea Party, the big difference was that the Republican party was genuinely stunned by its reversal of fortune in 2008, and there was a party-wide, collective bit of navel-gazing that went on. How the hell did Obama get into the White House? How did we lose control of all of Washington? Mix in with that a lot of popular indignation over Obama’s election, and the Tea Party was born. I think the reason why there was never a Democrat version of the Tea Party is only because the Democrats are so used to shooting themselves in the foot, even when on the verge of victory, that when they lose big, they just shrug and accept it like the losers that they so often are.

And so we come back to next week’s mid-terms, which will be historic, no matter how they turn out. If there is a big Republican stampede, then efforts to repeal healthcare reform will certainly pick up steam, though I suspect the repeal and replace movement won’t actually accomplish mush aside from a lot of screaming in Congress. (Although one hopes that Congress won’t descend into the anarchy we sometimes see in the Russian or South Korean parliaments.) Aside from repeal-and-replace, a wave of freshly minted Republican governors, Representatives and Senators could do much to slow down the implementation of reforms by way of initiatives and referendums, or by defunding reform so that it cannot accomplish what it set out to do.

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But what if the Republicans don’t win? Honestly, while races are narrowing, I still think that this midterm will be a large-scale GOP victory. But strange things do happen, and if the GOP cannot capitalize on the huge opportunity it has before it, then what will that mean to the party’s long-term power? Will the outrage over at least another two years of unfettered Democrat lawmaking cause the GOP base to splinter even further into other groups like the Tea Party? Who knows. It’s certainly too early to tell, but for those in the life & health insurance industry, which is an industry all about playing the long game, I am interested by what long-term strategies could be employed to make sure that Washington doesn’t gallop off in a direction that makes it impossible for the industry to prosper.

The one thing I keep returning to are initiatives and referendums. Most often, we hear about these when they are generating a huge stir of controversy, like how California’s Prop 187, the notorious “three strikes” rule, ended up sending people to prison for life because their third crime was something trivial, like shoplifting. More pointedly, the Economist once referred to ballot initiatives as “the crack cocaine of democracy,” particularly how they are used in California. But according to the Initiative and Referendum Institute, ballots and initiatives aren’t just a legislative option of the Left Coast. They got rolling during the Progressive era as a counter to the blatantly corrupt state legislatures of the era. By the time the direct democracy movement petered out in 1918, numerous states had created for themselves some kind of method for the voting public to bypass the larger legislative system. Today, nearly half of all states have some kind of initiative or referendum system in place, with the most activity in Oregon, California, Colorado, Arizona, North Dakota and Washington.

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Why do I mention all of this? Because one of the most enduring criticisms I have read in the many articles, papers, blogs and reports that go after the reform packages in general, but healthcare in particular, is that Congress ignored the will of the people by passing them in the first place. Now, this is a specious argument, since part of the contract of our system is that we give our representatives leverage to make laws on our behalf so we don’t have to be bothered with it. They’re supposed to be somewhat distanced from daily polls and spurts of populist outrage. But having said that, there’s something to the notion that Congress enacted reforms knowing that many of their constituents did not approve. The typical response is what we’re about to see next week, a mid-term election in which we get the chance to throw the bums out. But honestly, that won’t be enough. I doubt very much that a single Tea Party candidate who actually gets elected will maintain his or her grass roots fervor for more than a year before they either get ground down by our remarkably entrenched Washington system, or they simply give themselves over to the corrupting influence money plays in our upper levels of politics.

So what, then? Frankly, I think that for all of the political donations the insurance industry has to give, why not spend more time, money and energy getting a more robust initiative and referendum system in place? The NRA has been going after gun laws on a state-by-state basis, making Constitutional challenges along the way, and it has been successful with it. Maybe changing the way we vote could be something the insurance industry could start things moving on.

I am genuine about this. I hear the anger behind people who wish they had a bigger say in healthcare reform. It seems that if our system is out of whack, a failsafe needs to be in place to keep things from getting crazy. Ours is a system of checks and balances, but perhaps some more direct democracy in the system would provide more of a good thing. For those who felt healthcare reform was a good idea, but one horribly executed this time around, a direct form of popular input might be the thing to ensure the process gets done right the first time.

It sure wouldn’t make things more streamlined in Washington, and as we’re seeing on the state level, there is a push to make government simpler, not more complex. But what the heck…this is one of those ideas that’s so crazy, it just might work. Or would it? Were a robust form of direct democracy to get off the ground, the cure could worse than the disease. At least, that has always been the big fear with initiatives and referendums, and frankly, it is why our Republic was set up as a representational democracy rather than a direct one. There are those who would argue that a public more concerned with voting on American Idol than in presidential elections might not really have thought through the nation’s biggest issues before taking to the ballot box. If that’s so, then we’re just getting the democracy we deserve. But if nothing else, at least we will have resolved the problem of a government that is not beholden to its stakeholders, of representatives not obeying the will of the people, and of an entire industry being held accountable for reforms that many of its best and brightest insist are not only ill-conceived and unsustainable, but spit in the eye of public opinion. That’s worth considering.

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