THE BUREAUCRATIZATION OF EVERYTHING
Regulation, like the work of a boa constrictor, wraps itself around the American economy and restricts freedom of action, imposing costly burdens which threaten the survival of the American market. Federal bureaucracy coerces and cajoles every market player, diminishing freedom to invent, produce, and market, reducing consumer choice, and creating governmentally planned economies. In the Obama Administration, the federal agencies are headed by individuals predisposed to exercise control over markets and regulate them with a vengeance. Those individuals harbor grave suspicions about the private sector and think it prone to failure and abuse unless kept firmly under federal control. The economies produced as a result of regulatory enforcement are inefficient, failing to meet the best and highest uses. Those economies carry with them ever higher levels of unemployment and loss of private revenue. The bureaucratization of everything private is enslaving and progressively destroying all productive enterprise, particularly small and mid-sized businesses and new market entrants. The bureaucratization of everything is rapidly transforming previously vibrant markets into dull and dysfunctional ones that can neither innovate nor employ those with talent.
The squeeze is on with the federal government aiming to increase taxes on the most productive elements of society while simultaneously imposing economic burdens and limitations on free choice through thousands of federal rules and a new emphasis on enforcement against the non-compliant, including asset forfeitures, seizure actions, and civil and criminal prosecutions. While taxes take the wealth that would otherwise be saved, invested, or spent; regulations limit freedom of choice, increasing the cost of production, goods, and services, diminishing the profitability of every enterprise, and limiting consumer choice in the market. Regulations also impose significant barriers to market entry and force many firms out of existence, depleting wealth, eliminating opportunity, and adding to unemployment.
Since the start of the Obama Administration, there has been an 18% increase in the number of federal regulatory agencies; there has been a 13% increase in employment at the agencies. According to a Policy Backgrounder by Heritage Foundation Senior Fellow James L. Gattuso entitled “Red Tape Rising,” since 2009 the federal agencies have adopted 106 new “major” or “significant” regulations (i.e., those with an estimated economic impact of $100 million or more each) at an implementation cost of $11 billion and a combined added economic impact of $46 billion. The estimated annual cost to industry of regulations imposed by federal agencies is in excess of $1.8 trillion per year (an amount higher than the annual pre-tax corporate profits of American industry and a significant chunk of the nation’s $15 trillion annual GDP). Some 4,000 new regulations are wending their way through the federal agencies. Of those, some 224 are “major” or “significant” regulations, each imposing an economic impact in excess of $100 million.
It is remarkable to note that few, if any, of the new regulations will produce a measureable improvement in the health or welfare of Americans or in the environment. Ironically, the costliest regulations (those that do most to destroy jobs and businesses) are often ones that by reasonable standards of measure do little, if anything, to achieve the alleged government objective. There is no statutory requirement that the agencies prove the efficacy of their regulations as a condition precedent to their adoption and implementation. There is no statutory requirement that agencies eliminate regulations that increase unemployment or that contribute to the very harm they were allegedly designed to eliminate. There is no limit to the number or cost of regulations.
Since the Kennedy Administration, when Congress doled out $533 million to support the federal agencies, there has been a consistent growth in the number, size, and scope of regulatory power. Congress now expends in excess of $60 billion annually to keep the agencies running. There are over 250 of them regulating everything from tongue depressors to credit cards to power plants, refrigerators, and automobiles. There is no economic liberty right to be free of federal regulation regardless of how costly it is unless the regulation is so arbitrary and capricious as to be entirely irrational.
The regulatory agencies are headed by unelected officials who within their respective agency’s jurisdiction possess vastly more power, individually, than any single elected official. Those unelected agency heads promulgate regulations without a meaningful check on their discretion by the Courts, the Congress, or the American people. Fully nine-tenths of all federal laws now implemented are not the product of those we elect but are the products of the unelected heads of the federal agencies. That is rule by oligarchy. Consequently, the United States is in fact no longer a limited federal republic. It has become an unlimited bureaucratic oligarchy, a transformation I explain in detail in The Rise of Tyranny.
Federal regulations embrace virtually every aspect of the economy. Gattuso’s “Red Tape Rising” report for Heritage documents several recent costly regulations. For example, new Department of Labor “Wage Methodology for the Temporary Non-agricultural Employment H-2B Program” increases the minimum wage rate for foreign workers employed under an H-2B visa and will impose an estimated $847.4 million annually on the economy. New Environmental Protection Agency standards require adherence to more stringent power plant emission standards and will impose an estimated $846.3 million annually. Environmental Protection Agency regulations set new fuel efficiency and emissions standards for combination tractors, heavy-duty pickups and vans, and vocational vehicles and will impose an estimated $606.9 million annually.
Environmental Protection Agency regulations require adherence to more stringent standards on the performance and emission limits of solid waste incinerators and will cost $721.7 million to implement and $286.2 million annually. Other Environmental Protection Agency regulations require adherence to emission standards on commercial, institutional, and industrial broilers and will cost $5.2 billion to implement and $1.8 billion annually. Office of Energy Efficiency and Renewable Energy regulations establish more stringent standards for home heating and cooling appliances and will cost an estimated $657.5 million annually. HHS Obamacare regulations requiring the establishment of new electronic transaction infrastructures will cost an estimated $547.5 million annually. The list goes on and on, adding hundreds of millions of dollars of burden each year to a beleaguered market with no limits imposed by Congress.
Environmental regulations are the costliest and most prolific followed by those coming from the Department of Health and Human Services and the Food and Drug Administration. Remarkably no serious effort has been made to repeal federal regulations by force of law or to prevent adoption of any that cause unemployment or force the closure of businesses. As with so many things in the world of politics, politicians deceive. The elected representatives mouth platitudes and issue promises about reducing overall spending, while the federal agencies left unregulated adopt regulation after regulation without regard to the resulting job and business losses.
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At a time when the economy can least afford restrictions on freedom of choice and costly burdens, the regulatory agencies proceed as if affordability is entirely irrelevant. They proceed without regard to the foreseeable impact costly regulations have on job and business losses. Every work day somewhere in the United States a business or a person’s job ends due to the inability of a company to cope with regulatory burdens. Every work day some hapless business man or woman is forced to kow tow to the often unreasonable demands of a federal regulator, even if that means destroying huge amounts of inventory, relabeling all products, recalling perfectly safe products from the market, or reconstructing parts of a plant that have operated without incident for decades. As an attorney who has practiced administrative law for two and a half decades, I know well the enormously deleterious consequences that flow from unlimited regulatory power. That growth is destined to accelerate rapidly over the next four years. Many hundreds of businesses and many thousands of jobs will be lost. Given the persistent, decades long and pervasive lack of political stomach, selfless dedication to country, and brain power required to champion a reversal of the movement toward the bureaucratization of everything, we are worse off now than we were four years ago, and we will be worse off still four years hence.