The regulatory hive centered in Washington, D.C., buzzes with a power and reach that even the Caesars never imagined. And they were considered gods.
Federal regulators can bankrupt companies, distort markets and shut down entire industries with their decrees — the rules that implement Congressional laws. They can also move or slow entire economies and prop up or undermine Presidents. Not good.
Here’s how it works.
Laws are often and by necessity general. The rule-writing and rule enforcement is where the power is. Regulators, lifelong employees with little accountability to the people, write the rules and enforce the rules. If you as a private citizen or a business person have the misfortune of running awry of the regulators, you have virtually no recourse.
They are all powerful. Like gods of an industry. And like all people, they are given to ideology, partisanship and self-interest.
So here is the dynamic: Ideological, partisan, all-powerful regulators write and enforce rules and are unaccountable to the people. This is why so many conservatives want deregulation, in addition to the job-creating economic boost.
Their power is really stunning. Because of that, we have the armies of lobbyists. People mistakenly think the lobbyists are only interested in persuading the politicians. Actually what they are looking for is language that will help their industry or hurt their competitors — when the regulators write the rules. They can also lobby — unofficially — the regulators themselves.
What we have seen in spurts with FDR and Nixon was a corrupting of certain federal regulators. But what we have seen in recent years is a wholesale corrupting of regulatory agencies along ideological and partisan lines. Here’s a few.
- The U.S. Department of Justice selectively enforcing laws
- The IRS in blocking the non-profit status of tea party and conservative organizations, thus eliminating their influence
- The Environmental Protection Agency used on multiple levels to achieve political aims
- The Department of Homeland Security body-patting grandma while allowing burka-covered Muslim women through in the name of multicultural correctness
- The U.S. Immigration and Customs Enforcement Agency that refuses to enforce immigration laws and allows millions of people to come and live here illegally
- The U.S. Department of Agriculture targeting of small farmers and closing down “undesirable” farmers and ranchers
Abuse by the EPA undermine Trump
And so now we come to this moment. The EPA regulators have changed the agency’s report on fracking in groundwater contamination to make it more difficult for future approvals.
In last year’s draft version, the EPA reported that there were no “widespread systematic impacts on drinking water.” That report said the number of contaminated sites was quite small compared to the number of fracking sites and concluded the impact to be minimal. Good for the fracking industry, jobs, energy costs and energy independence.
However, that did not make the anti-fracking environmentalists happy, and those conclusions are now gone from the final report that just came out — one month before the new president is sworn in. Now the same EPA — based on the same data — reports that there is not enough evidence to dismiss the water contamination threat and says more vaguely that fracking activities “can impact drinking water resources under some circumstances.”
This is regulatory abuse at its clearest, because it is supposedly relying on scientific evidence to tweak the wording. But what it does is empower regulators to deny permits, allow stronger legal challenges to fracking and, probably most specifically, undermines Trump’s stated desire to open up more fracking to create American jobs and energy independence.
Abuse by the Fed undermine Trump
The Federal Reserve manipulates interest rates to spur the economy or try to slow it. The supposedly politically independent organization has kept interest rates at record lows for almost the entire Obama presidency. Obviously the economy needed all the help it could get, and it still wasn’t enough.
But interestingly, right before Trump takes office the Fed is planning a rapid series of rate increases. Either the Fed leadership knows exactly which policies goose the economy (Trump’s, not Obama’s) or they are actively trying to undermine a Trump recovery.
We never know what is going on inside of the secretive Fed, but given that Fed Chairwoman Janet Yellin chaired Bill Clinton’s Council of Economic Advisors and was appointed to the Fed’s top seat by Obama, who appoints fellow ideologues, it seems likely that it is not suddenly a clear view of what is good for the economy. If that is right, then this is another abuse of one of the most powerful and unaccountable of regulators.
This will not be the end of the Regulatory State’s attempts to undermine Trump at every turn. We saw this regularly in the Bush Administration, particularly in the State Department.
Americans should not have to fear the federal government and whatever local regulators show up at the door. But many do. And virtually all businesses do. Now, Republican presidents also must deal with the menace.
This needs to stop. But that will be a Herculean task, requiring a commitment to substantially reducing the size and scope of the federal government through agency elimination and deep funding cuts.