A most satisfactory and philosophically interesting week in the United States.

The startling Scott Brown victory in the Massachusetts election for the ex-Kennedy seat in the US Senate has prompted an avalanche of analysis. Obviously it was an unqualified calamity for the Democrats.

But what conclusions do Democrats and Republicans alike draw from the evident groundswell of voter anger at the complacent Big Government tendencies exhibited by both parties?

The Democrats, having heavy majorities in both House and Senate, have the harder task in working this out. Better to be even more radical before it is too late eg to cram through their vision of new healthcare reforms? Or a lot less radical?

Charles Krauthammer makes a good point about grassroots ‘tea party’ protesters:

You would think lefties could discern a proletarian vanguard when they see one.  

OK, Scott Brown’s surge is unlikely to be sustained across the States. But what if it were?

Michael Barone runs some numbers. Any district which did not vote as strongly 64% for Obama could be vulnerable to falling to the Republicans. Which in turn means that some 155 of 256 House Democrats could be waving goodbye to their terms in office. This is tending to make them, hem, cautious about ploughing on with their unpopular healthcare agenda. 

Is a key lesson that in the USA a version of broad ‘libertarian’ thinking – socially liberal, fiscally conservative – is starting to lead independent opinion?

And that any party which taps into that is going to find its fortunes looking up? And that the establishment Democrats as currently constituted are so bogged down in the tar-pit of their leftish Huge Government instincts that they are unable to manoeuvre successfully? 

One can but hope so. More please, and some for us over here too.

Meanwhile non-US readers may have missed the powerful Supreme Court ruling which knocks away great slabs of legislation controlling freedom of speech, especially during election campaigns.

These laws, driven in good part by outright leftist opposition to business (which seems to disappear when politicians are being generously lobbied after they are elected) have spawned ridiculous and oppressive bureaucracy edging the USA towards some sort of banana republic approach to freedom :

The majority said that "Campaign finance regulations now impose ‘unique and complex rules’ on ’71 distinct entities.’ These entities are subject to separate rules for 33 different types of political speech. The FEC has adopted 568 pages of regulations, 1,278 pages of explanations and justifications for those regulations, and 1,771 advisory opinions since 1975. 

This excellent analysis at Future of Capitalism is well worth reading since it covers in some detail the arguments of the Supreme Court judges who ended up in the minority on this one. But even though President Obama is warning of a strong response to the Court’s decision, it is hard not to agree with the majority:

These onerous restrictions thus function as the equivalent of prior restraint by giving the FEC power analogous to licensing laws implemented in 16th- and 17th-century England, laws and governmental practices of the sort that the First Amendment was drawn to prohibit.

Matt Welch wisely reminds us of the issue in the case concerned. A documentary film critical of Hillary Clinton was not allowed to be aired on TV!?

And he argues that the massed networked power of individuals is now more than enough counterweight to see off murky ‘corporate interests’:

It has never been easier for groups of citizens to swarm together and flow money through the Internet toward campaigns and candidates who excite them. Ask Ron Paul — or more relevantly, Barack Obama — what’s more powerful: $10 million from Dr. Evil Industries, or $10 each from 1 million people who can actually vote?

Exactly.

Finally, the new moves proposed by President Obama to recalibrate risk-management by banks may have rattled stock markets round the world, but the President wins praise for his approach in the WSJ:

In calling for an end to proprietary trading at firms with a federal safety net, the President showed that he now understands an important principle: Risk-taking in the capital markets is incompatible with a taxpayer guarantee…

Yesterday’s announcement is a critical departure from the reform plan Mr. Obama introduced last year—largely incorporated in the House and Senate bills written by Barney Frank and Chris Dodd. Those plans all sought to expand the universe of too-big-to-fail companies eligible for taxpayer rescue.

Mr. Obama has at last joined the most important policy discussion: How to eliminate the moral hazard now embedded in the U.S. financial system. Political assaults on banker compensation have done nothing to address this core problem that enables gargantuan bonuses.

Quite right. Let’s get rid of the too-big-to-fail approach.

If senior business people think that however outlandishly they behave, the taxpayer will foot the bill, are we more likely to get better or worse behaviour?

Yet beyond that is the definitive moral hazard in government itself: how to stop greedy and stupid politicians plundering taxpayers to bribe their friends?

Not easy.

But as Scott Brown’s magnificent election shows, the threat of a tidal wave of voter anger may help a little.