The Administrative State and the United States

The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.  Were the federal Constitution, therefore, really chargeable with the accumulation of power, or with a mixture of powers, having a dangerous tendency to such an accumulation, no further arguments would be necessary to inspire a universal reprobation of the system.

James Madison wrote those words in Federalist No 47.  And yet we have exactly this threat clear and present in the Regulatory State that’s been a-building since FDR’s time in power.  Chief Justice William Howard Taft, in his eulogy to Chief Justice Edward White, said without a trace of irony,

[T]he inevitable progress in exigencies of government and the utter inability of Congress to give the time and attention indispensable to the exercise of powers in detail forced the modification of the rule [held from our birth for the succeeding 140 years that no legislative powers can be delegated].  Similar necessity caused Congress to create other bodies with analogous relations to the existing legislative, executive, and judicial machinery of the Federal Government, and these in due course came under the examination of this court.  Here was a new field of administrative law which needed a knowledge of government and an experienced understanding of our institutions safely to define and declare.

We have, indeed, that whole branch of our judiciary—Administrative Law Judges—created specifically to specialize in interpreting and applying (their interpretation of) the regulations created by our Executive Branch’s Cabinets and Independent Agencies.  The foundation of the belief that they are necessary is illustrated by the explosion of the Federal Register, the government’s primary listing of these regulations, from 2,600 pages in 1936, as FDR was just getting started with his New Deal, to over 80,000 pages by 2010, and with an additional 6,300 regulations (not pages of regulations) finalized by the end of 2012.

The current, wholly out of control state of lawmaking masquerading as rulemaking is illustrated by the byzantine (and at times wholly hidden) rules and rules-in-the-making that enact the Patient Protection and Affordable Care Act and by the Dodd–Frank Wall Street Reform and Consumer Protection Act, of which the Consumer Financial Protection Bureau is described by Todd Zywicki this way:

A centerpiece of the Dodd-Frank financial reform legislation was the creation of a new Federal Consumer Financial Protection Bureau (“CFPB”) within the Federal Reserve.  Few bureaucratic agencies in American history, if any, have combined the vast power and lack of public accountability of the CFPB.  It is an independent agency inside another independent agency, presided over by a single director who is insulated from presidential removal.  Additionally, the Board is outside of the congressional appropriations process.  Finally, its actions are unreviewable by the Federal Reserve….

Proponents of the CFPB argue that extreme independence is justified to insulate it from political pressures.

The plethora of laws that a Progressive government thinks is necessary to guide and direct men’s lives and businesses drives the imperative to generate regulations in order to give flesh and “clarity” to those laws.  But these regulations, these rules, are enacted [sic] by men in sections of government whose placement wholly isolates them from effective oversight by government’s employers—us.  This unaccountability and lack of control over functional lawmaking in which these men engage is an even greater threat to the very freedoms which we hire this government to protect and to facilitate than are that plethora of laws itself.

Keep in mind that lawmaking is properly and wholly a political matter; it must be subject to what those CFPB proponents fear: “political pressures.”  Making law is the task of We the People through our elected representatives in the Congress.  Regulations and rules are a subset of law, and so these must be dealt with by us and our representatives, not by the Executive Branch, whose sole function in this context is to enforce the law, not make new ones or modify or “clarify” existing ones.

Neither can the judiciary have any role in lawmaking; its sole function in this context has exactly two parts: first to decide whether the law before a judge is legitimate, that is, Constitutional (and if not to strike it down), and second if it is legitimate, to apply it as it is written, and not as that judge thinks it ought to have been written or as that judge creatively “interprets” it in order to “update” it for his (understanding of the) times.

Even could the argument be made that regulations are a separate class of lawmaking, wholly different from the statutory lawmaking that We make through our representatives, We have identified lawmaking, in the Constitution which We ratified, as the sole province of us and our Congress.

To solve this, aside from withdrawing the vast majority of regulations currently on the books (an entirely necessary endeavor) we must, which Taft failed to understand, rescind that excess of laws, and we must sharply curtail, if not withdraw entirely, Congress’ delegation of rule-making authority to the Executive Branch.

Full Stop.

Another Thought on Economic Mobility

Gerald Auten and Geoffrey Gee wrote about “Income Mobility in the United States: New Evidence from Income Tax Data.”  It’s an extensive paper; I’m abstracting a couple of points in this post [emphasis added].

  • More than half of taxpayers…moved to a different income quintile over this period [1996-2005]. About half…of those in the bottom income quintile in 1996 moved to a higher income group by 2005.
  • Median incomes of taxpayers in the sample increased by 24% after adjusting for inflation. The real incomes of two–thirds of all taxpayers increased over this period.  Furthermore, the median incomes of those initially in the lowest income groups increased more in per centage terms than the median incomes of those in the higher income groups.  In contrast, the real median incomes of taxpayers who were in the highest income groups in 1996 declined by 2005.
  • The composition of the very top income groups changed dramatically over time.  Less than half…of those in the top 1% in 1996 were still in the top 1% in 2005.  Less than one–fourth of the individuals in the top 1/100th% in 1996 remained in that group in 2005.

Those evil 1%-ers not only had trouble staying in the 1%, a significant fraction of them were erstwhile bottom%-ers.

Taking economic mobility—income changes—relative to all taxpayers, Auten and Gee found this:

  • About 56% of taxpayers…in the lowest income quintile in 1996 had moved to a higher quintile by 2005.  While 29% moved up to the second quintile, nearly as many (27.4%) moved up two or more quintiles and 4.5% moved all the way to the top quintile.
  • More than twice as many middle–income taxpayers moved up to a higher income quintile…as dropped to a lower one[.]

Thomas Sowell had this comment on the matter three years ago:

Only by focusing on the income brackets, instead of the actual people moving between those brackets, have the intelligentsia been able to verbally create a “problem” for which a “solution” is necessary.  They have created a powerful vision of “classes” with “disparities” and “inequities” in income, caused by “barriers” created by “society.”  But the routine rise of millions of people out of the lowest quintile over time makes a mockery of the “barriers” assumed by many, if not most, of the intelligentsia.

And now comes President Barack Obama and his Democratic Party colleagues decrying exactly that static income inequality folderol in the middle of their failed economic recovery and the outcomes of their failed social control policies.  Truly, they are desperate to change the subject in this election year.