Policy Digest: Regulatory State Edition
Let them eat taxpayer-guaranteed loans
The Wall Street Journal offers a good take down of the arguments for the Export-Import Bank, which the House just reauthorized for another 6 months. One irony in this debate, which the Journal notes: many on the left, including the Obama administration, Elizabeth Warren, and Nancy Pelosi, support the Ex-Im bank despite their real antipathy for business and their professed antipathy for “the rich” obtaining benefits at the expense of everyone else. As the Journal explains, “these liberals are friends of business only when government is allocating the favors.” That’s true, but the issue goes deeper than handing out favors. What the left wants (and unfortunately many on the right as well) is control. When government holds the power to dole out benefits, like taxpayer-guaranteed loans from the Ex-Im Bank, and burdens, like Dodd-Frank and zillions of other business regulations, the only way to function is to plead for special status before the modern-day equivalent of the King’s court. Guess who the monarchs are?
An empire of men
If you have a hard time visualizing the zillions of regulations I mentioned above, here’s a helpful video from Patrick McLaughlin at the Mercatus Center. And here’s an op-ed by Allan Meltzer explaining one way in which this web of regulations leads to cronyism. In a nutshell, regulations hand broad discretion over to bureaucrats which inevitably leads to people trying to influence that discretion. Ayn Rand wrote about this in her essays “Have Gun, Will Nudge” and “The Pull Peddlers” (the latter of which can be found in Capitalism: The Unknown Ideal)
I should mention that I’m not a fan of the term “cronyism,” because it puts the focus on bad people favoring their cronies rather than a bad system that grants power to government that it should not have. The result of thinking about it that way is that businessmen are always blamed and the solution proposed is always more regulation — such as campaign finance laws — to keep these bad actors from corrupting the system. But the problem is that the system itself is corrupt, because it’s based on a wrong-headed view of government’s purpose. The only thing government is good for is protecting our rights. Give it power to do anything else, and you get an empire of men, as John Adams called it, instead of an empire of laws.
Regulation begets regulation
Speaking of campaign finance laws, 54 Senators (two Independents; the rest Democrats) voted last week to amend the First Amendment to make room for more of the laws. That shouldn’t surprise us. If you really want to control people, then it’s not enough to want to regulate the economy; you also need to prevent them from influencing the political system. After all, what happens if they elect leaders who want to roll back the regulatory state?
Thankfully, this effort failed, but, as I’ve pointed out before (here and here) it is motivated by ideas, not politics, so it will be back. Here’s more on the amendment effort from the Center for Competitive Politics and an op-ed earlier this week from George Will on the same subject.