Thursday, August 23, 2018

The Four Horsemen of the Regulatory State

At a December 2017 press conference in the White House's Roosevelt Room, President Trump boldly announced that his administration had begun "The most far-reaching regulatory reform in American history." With typical flair, the president wielded a large pair of gold scissors, slicing red tape connecting piles of paper that symbolized the growth of the regulatory state.

Americans worried about the regulatory state are bound to be disappointed, at least absent major congressional action, and not just because the president's team will be unable to deliver on his promise to pare back the federal regulatory code to "Less than where we were in 1960." At a press briefing later the same day, Neomi Rao, chief architect of the White House's regulatory-rollback efforts as administrator of the Office of Information and Regulatory Affairs, clarified that "Returning to 1960 levels ... would certainly require legislation." The central challenge in reforming the modern regulatory state is that it has been built by, and is sustained by, multiple forces.

Under federal rules, a company making a product in Nebraska can generally still be sued for alleged product defects in California, so relocating from the Golden State to the Cornhusker State makes little difference.

In many cases, state officials are not merely challenging the legality of federal action but using the regulatory-state tool kit-civil litigation, the threat of prosecution, and administrative powers-to develop a final, and powerful, alternative locus of the regulatory state.

State officials have used the threat of prosecution to reshape national businesses-most prominently, through New York's Martin Act, a 1921 state law that gives the Empire State's attorney general extremely broad powers to investigate, subpoena, sue, and prosecute companies and individuals, even absent any showing of intentional wrongdoing.

Federal legislation has been introduced-and, in many cases, advanced-that would constrain all four forces of the regulatory state.

So there is hope, even if scaling back the regulatory state is a tall task when it requires confronting not only "Independent" agencies but also federal prosecutors and private litigators, as well as state and local officials.

https://www.city-journal.org/html/four-horsemen-regulatory-state-16031.html 

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