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Rolling Back Big Government

James Madison

How to Roll Back Big Government, for a Free Economy and a Free People

By John Yoo • nationalreview.com • February 11, 2016

Regulations cost Americans $277K per household per year.

Conservative intellectuals do not trust Donald Trump, who is a strong candidate, having won in New Hampshire after his loss in Iowa. Like Voltaire’s quip about the Holy Roman Empire, Trump appears to be neither principled, nor conservative, nor intellectual. He denies any governing philosophy while surfing on waves of populist frustration with immigration, international trade, and political correctness. His outrageous comments about Muslims, women, Mexicans, and immigrants, and his personal attacks on candidates and journalists have diverted the primaries away from the debate of substantive policy.

But Trump, like Ted Cruz and Marco Rubio, now have a golden opportunity to embrace a reform agenda that could reignite economic growth, reassure conservatives, and resurrect the Constitution. He should make radical reform of the inner workings of the welfare state a central plank of his candidacy. By signing on to a platform to halt government, Trump can signal that he will devote his presidency not to venting populist anxieties, but to governing in accordance with core conservative ideas.

Stopping the growth of government will have immediate economic benefits, which sit high on any candidate’s agenda. Today’s federal regulations have cost the American economy approximately $38.8 trillion. They have decreased economic growth by about 2 percent per year between 1949 and 2005. The median American household receives about $277,000 less annually than it would have earned had we not suffered through those six decades of accumulated regulations — we’d have a median household income of $330,000 rather than $53,000 today.

Obama did not begin this death by regulatory sclerosis – it began with Woodrow Wilson’s progressive government and took permanent root with FDR’s New Deal. But Obama has put big government on steroids. Over the past seven years, his administration has turned its back on the Constitution’s principles of separation of powers and federalism to engineer a massive expansion in the size and power of the national government. Some of the nation’s leading scholars, government officials, and policymakers are coming together to chart Obama’s mistakes and develop a plan to unshackle the economy. They provide the leading presidential candidates, who are often accused of flip-flopping, with an off-the-shelf manual for their first days in office.

Of course, no one opposes cleaner air, safer cars, or fairer rules for markets — in the abstract. But every expansion of federal regulation comes with a cost: a loss in individual freedom, initiative, and innovation. As the government grows, no matter how noble the intentions, it crowds out civil society and the private sphere. Innovation and economic progress depend on a lightly regulated market, which creates incentives for individual action and initiative.

Take, as the paradigmatic example, Obamacare. This statute, along with its successors, nationalized our nation’s health-insurance markets. But since its 2010 enactment, the Obama administration frequently has deviated from the statutory text, changing and even ignoring stipulations it no longer wanted. In Liberty’s Nemesis: The Unchecked Expansion of the State, a collection Dean Reuter and I edited (due out Monday, from Encounter Books), one contributor explains, “these changes have alleviated or delayed the law’s burdens on some constituencies, while increasing the burdens borne by others.” One is the “shared responsibility” mandate on employers: “The Administration not only waived the effective date for the employer mandate, it also invented a new set of staggered requirements for employers.” Another example is the law’s requirement that the federal government could only subsidize insurance policies purchased on an exchange “established by the State.” Abetted by the Roberts Supreme Court, the administration allowed the federal government to subsidize all insurance policies, even in states with no exchanges. Millions have lost choice in their health care, providers have lost the incentive to bring new products to market, with little evidence that health outcomes have improved.

A President Trump, Cruz, or Rubio could begin to turn the ship around by invoking some of the same powers that Obama has claimed. On immigration, for example, the administration invoked prosecutorial discretion as a pretext to cover its refusal to obey Congress’s deportation policies. On January 21, 2017, the next president could rely on the same authority to freeze the enforcement of all regulations adopted during the previous eight years. He would follow up with an order to all agencies to promulgate more freedom-friendly rules.

The authors in Liberty’s Nemesis have proposed many rules that should reignite the American economy, such as privatizing Internet controls, lifting the Dodd-Frank regulations on the banking industry (which cost the economy more than $6 billion per year), slimming down the tax code, and replacing heavy-handed regulation with grants and vouchers. While conservatives might worry that using expansive theories of executive power to overturn Obama’s welfare state will seem hypocritical, sometimes we need to use firebreaks to stop a wildfire.

While curtailing the welfare state will let loose economic creativity and innovation, growth is not the most important benefit. Constitutional self-government is. For the last century, all three branches of government have uprooted the Framers’ system, which intended federal law to be rare and difficult to make. Congress delegates large swathes of power to agencies, which operate in secrecy, avoid deliberative processes, and ignore unambiguous statutory commands and public notice-and-comment procedures. Under the Chevron doctrine, federal judges defer to agencies because of the latter’s claim to technical expertise. White Houses have welcomed this new system because it increases their domestic powers, exactly where the Framers had intended the presidency to be weakest.

Borrowing from Montesquieu, James Madison long ago warned, “there can be no liberty where the legislative and executive powers are united in the same person, or body of magistrates.” Trump can commit to restoring a balance of powers, rather than joining Obama in endlessly expanding the boundaries of the welfare state. If he refuses, Cruz and Rubio will have another chance to demonstrate that their conservative constitutional values outweigh his principle-free candidacy.

 John Yoo is Heller Professor of Law at the University of California, Berkeley, and a visiting scholar at the American Enterprise Institute. He served in the Justice Department during the George W. Bush administration.

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Source: John Yoo, nationalreview.com

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