Over a period of centuries as the English monarchy became less and less absolute, the English system of jurisprudence developed firm notions of personal liberty, equity, the right to confront one’s accusers, the presumption of innocence, and the right to trial by a jury of one’s peers.

Those sure principles were transported to the Colonies intact, or nearly so, and were exalted first in the Declaration of Independence, then in the Articles of Confederation, and then, particularly, in the first ten Amendments to the Constitution. One marvels at the sparseness of the writing. The authors understood the impossibility of covering every imaginable situation but nevertheless the necessity of setting forth principles broadly enough that the basics could stand without threat of defeat as the nation evolved. Only rarely, today, is there discussion beyond the sometimes thorny question “How does this principle apply to this situation?” to the perhaps deeper question “What did the authors intend that the words and the punctuation mean?,” such as the text which deals with the right to bear arms.

The outline of our system of Courts was largely carried over from England, too (except in Louisiana in matters of State interest, where some basic precepts descended from the Napoleonic Code). There were courts which handled matters of contract and matters of tort, and sometimes separate courts of equity, which dealt with hazier questions of right, wrong, and fundamental justice. In the latter day, courts of original general jurisdiction are now generally courts of equity, too.

I think that U.S. citizens have always possessed an innate sense of equity, or fairness, if you will. It’s in our bones. It may not spring directly from the language of the Constitution itself, but it may derive from the overall concepts (perhaps largely those of John Locke, as “translated” by Jefferson) which produced the words.

I think that a situation which involves, or appears to involve, or carries with it a suspicion of involving, a conflict of interest is particularly anathema to the American people. Lawyers, for example, are especially sensitive to a charge of conflict of interest. Such a charge, even if unproven, is deadly poisonous to his practice. So are real estate agents (they have to be; in some States, at least, the laws are very strict on the subject). It is truly unfortunate that there are so many current evidences of conflict of interest – or the appearance or even the suspicion of it – which continue to pop up. How repelled and distressed we are, upon hearing of kickbacks by drug companies to doctors in exchange for touting their products; or of the scandal involving two juvenile court judges taking kickbacks in exchange for sending teenage miscreants to a privately-owned detention center; or of a new “Abramoff” scandal possibly beginning to unfold in Washington; and yes – the inherent conflict of interest between promoters of financial instruments and the ratings agencies which bless those offerings well, in exchange for a fee paid by the promoters. So much about us these days simply does not pass the “smell test.”

Professor Joseph Stiglitz of Columbia University (Nobel in Economics; former Chairman of the Council of Economic Advisers) published an article on the Op-Ed page of The New York Times today (April 1) which is no April Fool joke. It should be Required Reading. It is a scathing commentary on the Geithner bailout plan. The article points out that the very people who are responsible for having created the current economic mess in the first place are those who will stand to win, while it is the taxpayer who stands to lose. “In other words, the Geithner plan works only if and when the taxpayer loses big time.” If Professor Stiglitz is correct in his analysis, why should it be that the banks are to be so generously treated at the expense of the taxpayer? Why should it be that the risk seems so one-sided? Which parties had a hand in writing the bailout proposal? Or were consulted about it? Or ventured their opinions about it? Are the people’s interests being properly cared for? Indeed, who is the spokesman for the taxpayer? Has anyone identified himself or herself as such? If Professor Stiglitz is correct in his analysis, Mr. Geithner could not very well do that, in view of the program’s apparent highly disproportionate allocations of risk. There appears to be a certain lack of transparency about it all. What we have here are grounds for suspicion of a conflict of interest and suspicion of lack of impartial representation for taxpayers’ interests.

Surely the former Editor of the Harvard Law Review (who subsequently became an instructor in Constitutional Law, and is now President) is knowledgeable in the development and application of common notions of fairness and of conflict of interest, and of the right to impartial representation.

I feel a deep sense of unfairness inherent in the President’s casting the Chairman of General Motors to the winds and, by the President’s own comments, enveloping the man or allowing him to be enveloped by the comments of others in the mantle of the ultimate “bad guy,” while at the same time the very people whose past actions are at the root of the economic crisis are not only left scot-loose but stand to become winners at public expense. Why should this be so? If Mr. Wagoner has been cashiered on the basis of failure of management skills, why should bankers (and their companies) be rewarded for failure of management skills? This does not pass the “smell test.”

William Kurtz
Candlewave