Tag Archives: regulation

One Can Hope

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My post today comes almost entirely from an opinion supporting the DC Circuit Court of Appeals’ opinion upholding a lower court ruling denying a dairy farmer’s objection to milk price regulation as applied to his farms.  From the per curiam (i.e., from the court itself—the majority opinion is unsigned, although dissents and concurrences, if they exist, are signed) opinion in Hettinga v United States comes the summary of the farmer’s beef:

Plaintiff-appellants Hein and Ellen Hettinga appeal the dismissal of their constitutional challenges to two provisions of the Milk Regulatory Equity Act of 2005 (“MREA”), Pub. L. No. 109-215, 120 Stat. 328 (2006) (codified at 7 U.S.C. § 608c). The Hettingas alleged that the provisions, which subjected certain large producer-handlers of milk to contribution requirements applicable to all milk handlers, constituted a bill of attainder and violated the Equal Protection and Due Process Clauses.

The Hettingas’ dairy farms were the only farms in the United States that were affected by the MREA; however, the Appellate Court upheld the application of MREA over the Hettingas’ constitutionally grounded objections.

From Circuit Judge Janice Rogers Brown’s, with whom Chief Judge David B Sentelle agreed (forced) concurrence:

…their consternation at being confronted with the gap between the rhetoric of free markets and the reality of ubiquitous regulation. The Hettingas’ collision with the MREA—the latest iteration of the venerable AMAA—reveals an ugly truth: America’s cowboy capitalism was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers. And the courts, from which the victims of burdensome regulation sought protection, have been negotiating the terms of surrender since the 1930s.

More from her opinion:

As the dissent predicted in Nebbia, the judiciary’s refusal to consider the wisdom of legislative acts—at least to inquire whether its purpose and the means proposed are “within legislative power”—would lead to only one result: “[R]ights guaranteed by the Constitution [would] exist only so long as supposed public interest does not require their extinction.” In short order that baleful prophecy received the court’s imprimatur. In Carolene Products (yet another case involving protectionist legislation), the court ratified minimalist review of economic regulations, holding that a rational basis for economic legislation would be presumed and more searching inquiry would be reserved for intrusions on political rights.

The practical effect of rational basis review of economic regulation is the absence of any check on the group interests that all too often control the democratic process. It allows the legislature free rein to subjugate the common good and individual liberty to the electoral calculus of politicians, the whim of majorities, or the self-interest of factions.

She adds [her emphasis]:

…the Constitution created the countermajoritarian difficulty in order to thwart more potent threats to the Republic: the political temptation to exploit the public appetite for other people’s money—either by buying consent with broad-based entitlements or selling subsidies, licensing restrictions, tariffs, or price fixing regimes to benefit narrow special interests.

And

As another court has noted, federal regulation of milk pricing “is premised on dissatisfaction with the results of competition.” Alto Dairy v. Veneman, 336 F.3d 560, 562 (7th Cir. 2003). “M]ilk price discrimination is intended to redistribute wealth from consumers to producers of milk.” Id.

In the end, Judge Brown is quite blunt:

Civil society, “once it grows addicted to redistribution, changes its character and comes to require the state to ‘feed its habit.'”

Are we seeing a pattern begin to emerge?  Is not the Patient Protection and Affordable Care Act the outcome of a similar political temptation to…buy consent with a broad-based entitlement and subsidy?  Is not PPACA a similar attempt to redistribute wealth from healthy consumers to the unhealthy—or those who are timorous about their future after a lifetime of their own health-related choices?

And by extension is not all New Deal and later Commerce Clause regulation similar pandering and playing on dissatisfaction with competitive outcomes in order to preserve the status of incumbents?  After all, the Commerce Clause was intended to regularize the commerce of the several states among each other and to give Federal control over international trade.  And nothing more.

And Judge Brown also is right about the legal argument of “rational basis review.”  There’s nothing at all rational about it.  Arguments for or against any regulation, or any law, must proceed from how well that regulation or law preserves individual liberties and responsibilities, not from how well the regulation or law asserts dominance of any group over the individual.

 

h/t Power Line, and both a hat tip and a bow to DC Circuit Judge Janice Rogers Brown.

Banks and Governmental Reform

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The World Bank report, “China 2030: Building a Modern, Harmonious, and Creative High-Income Society,” concerns China’s future over the next 25, or so, years, and it describes a number of “challenges” its economy faces.

The report suggests, with regard to the financial sector in particular (beginning in Chapter 5 of “Supporting Report 1”):

Despite the many reforms introduced so far, the Chinese financial system remains repressed, unbalanced, costly to maintain and potentially unstable….

and

Banks have been used as instruments of the government’s macroeconomic and sectoral policy goals and have not always been in a position to lend prudently.

The Epoch Times summarizes this way:

The report suggests that China’s financial sector is constrained by state ownership and regime interference. The Chinese state uses the financial sector to enforce its policies, preventing lending institutions from becoming a true market force.

Sound familiar?

 

h/t to Belmont Club

Lobbying with a Red Herring

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The Associated Press is joining the lobbying of the Supreme Court over the Patient Protection and Affordable Care Act, and its effort is either cynical or ignorant, depending on their motive for their chosen focus:

During the recent oral arguments some of the justices and the lawyers appearing before them seemed to be under the impression that the law does not allow most consumers to buy low-cost, stripped-down insurance to satisfy its controversial coverage requirement.

The AP presents this as a “possible misunderstanding” the “could cloud” the Court’s deliberations.

Of course, cost is only a peripheral issue, arising primarily from Justice Antonin Scalia’s discussion of the subsidy a young, healthy American (who does not need health insurance—and who used to be able to make that decision for himself) must pay, through forced purchase of unneeded/undesired health insurance, so that others, claiming the need, can afford to get health insurance.

The question before the Court—as all the players understood, making their arguments concerning the constitutionality of PPACA’s Individual Mandate, and by extension of the PPACA itself, as they did—is the question of individual liberties and the degree to which Government can, under our Constitution, limit our liberty for our own good.

Cost isn’t the issue—freedom and government control over an individual’s decisions is.

Another Government Mandate

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Last December, the Director of the Labor Department’s Office of Federal Contract Compliance Programs, Patricia Shiu, proposed, in all seriousness, a regulation requiring companies, apparently with 50 or more employees, to adopt a 7% hiring quota for disabled job applicants or be debarred from doing business with the federal government.  Note that this isn’t 7% of the total number of employees—Ms Shiu is a better micromanager than that.  This is a quota of 7% in each separate job category: “one or more jobs with similar content, wages rates, and opportunities.”

Moreover, Shiu’s rule attempts to require companies to encourage all job applicants to label themselves as “disabled” prior to being hired—apparently without any screening of applications or applicants for accuracy of the claim—and to require companies to engage in an ongoing compliance regime: companies must encourage all employees “to label themselves disabled after being hired, and once a year thereafter,” again apparently without any regard for the accuracy of such self-labeling.  Additionally, the rule would require each company to document, in detail, for each applicant not hired, why that applicant was not hired.  I wonder whether “Because I already hired someone for the position” would be acceptable.  On top of this, each company would be required annually to (re)justify and to  (re)document “the physical and mental job qualifications for [every] job opening…and to provide an explanation as to why each requirement is related to the job to which it corresponds” and to prove each requirement to be “consistent with business necessity.”

Labor’s estimate of the cost of compliance is cynically understated by two orders of magnitude: they claim a cost of just $81 million for roughly 200,000 companies to comply—a cynical $400 per company.  HR Policy estimates the true cost (not counting productivity costs, which are much harder to estimate) to be in the region of $1.8 billion—a more realistic $9,000 per company.  Of course, not included in Labor’s estimate is the cost of hiring all those bureaucrats into Ms Shiu’s burgeoning empire to monitor compliance.  Nor is the cost of all the lawyers companies will have to retain to defend themselves against all the litigation such a rule is going to encourage.

What constitutes an eligible disability?  Reading, concentrating, thinking, communicating, and interaction with others all are on the list.  I have to wonder at the productivity costs of having to have folks on the payroll specifically to read instructions to employees who can’t read; to do so repeatedly to employees that can’t concentrate long enough to absorb the instructions; to monitor employees who can’t concentrate long enough to complete the job assigned; to guide employees who can’t think clearly enough to understand the instructions they’ve just read or had read to them, or to figure out a task when no monitor is readily available; who can’t explain the trouble they’re having to their peers or supervisors; or who don’t get along with their peers or supervisors.

Oh, and hypocrisy notice: the Federal government itself has only 5% disabled on its payrolls—and the Labor Department’s percentage of disabled employees has decreased every year since President Obama took office, despite Obama’s sharp increase in Labor hiring.

There went the “opportunities.”  Why would a company hire at all in such an environment?  Sounds like a good reason to decline to do business with the Federal government.

Government and Due Process

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Senator Barbara Boxer (D, CA) and Senate Majority Leader Harry Reid (D, UT) want to bar American citizens from leaving the country solely on the basis of the say so one of the collections of President Obama’s decried “unelected officials”—this time the bureaucrats of the IRS.

Boxer’s Senate Bill 1813, “Moving Ahead for Progress in the 21st Century Act” (MAP-21), is “AN ACT To reauthorize Federal-aid highway and highway safety construction programs, and for other purposes.”  Reid tacked on to this his amendment, which reads in part (it’s in Section 40304 of this 1,700 page bill):

If the Secretary [of the Treasury] receives certification by the Commissioner of Internal Revenue that any individual has a seriously delinquent tax debt in an amount in excess of $50,000, the Secretary shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport….

Hmm….

The Editor of the Congressional Quarterly publication’s Senate Watch, Niels Lesniewski, insists that such a thing has legal precedent:

Existing law says that passports may not be reviewed for applicants owing child support in excess of $2,500.  So I think supporters would say: “You can’t get a passport if you don’t pay child support, but you can get a passport if you don’t pay taxes?”

But this is a red herring.  The deadbeat parent has been found in open court to be guilty of the arrearage.  An IRS filing of notice, which is all Reid’s amendment requires, is not even an accusation of tax evasion, as Constitutional Lawyer Angel Reyes points out, much less an actual conviction for tax evasion.  Reyes expanded on the point:

It takes away your right to enter or exit the country based upon a non-judicial IRS determination that you owe taxes.  It’s a scary thought that our congressional representatives want to give the IRS the power to detain US citizens over taxes, which could very well be in dispute.

Our Bill of Rights’ 3rd, 4th, 5th, 6th, and 7th Amendments each carry very a strongly implied right to due process, and the 14th Amendment makes that right explicit.  But, then, as the Progressive opinionist, Ezra Klein, has already pronounced, the Constitution isn’t binding on anyone.

This is a bad amendment, and one marvels at the cynicism of the Progressive Senators in attaching such a wholly irrelevant amendment to what is, at bottom, an attempt at a jobs bill.  If they really believed in the legitimacy of this concept, they’d put it into a separate bill of its own and bring it to the floor for open debate.

One marvels further, though, at the margin of passage: this bill passed out of the Senate on a 74-22 vote.  There are entirely too many RINOs in the Senate.