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Some Non-Covid Links

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The Wall Street Journal‘s Editorial Board applauds the U.S. Fifth Circuit’s ruling that reins in administrative-agencies’ propensity to conduct star-chamberish trials [2]. A slice:

Merits of the case aside, the constitutional problem is that the SEC acted as prosecutor, judge and jury. The Dodd-Frank Act lets the SEC decide whether to bring charges in its own tribunal or federal court. The agency usually chooses the former, as do other agencies such as the Federal Trade Commission.

Enter the Fifth Circuit, which held in Jarkesy v. SEC that the SEC’s tribunals, as currently structured, violate the Seventh Amendment’s right to trial by jury. As Judge Jennifer Walker Elrod explains for the 2-1 panel majority, the jury guarantee applies to all suits of “common law,” as understood at the time of the founding. This includes fraud prosecutions.

The Fifth Circuit also ruled that Congress’s delegation of legislative power to the SEC to decide where to bring fraud enforcement actions violates the Constitution’s separation of powers. Congress may grant agencies prosecutorial discretion to decide what cases to bring, Judge Elrod noted, but it cannot give them free rein to decide their judicial forum.

Also writing in the Wall Street Journal about the Fifth Circuit’s excellent ruling is Mario Loyola [3]. Two slices:

Now the U.S. Court of Appeals for the Fifth Circuit has taken what could be a historic step toward restoring the Constitution’s checks and balances, in the case of Jarkesy v. SEC [4]. The Securities and Exchange Commission acts as rulemaker, prosecutor and judge for America’s securities laws. It may have a solid case for fraud against investor George Jarkesy, but the powers and perks the agency has accumulated pose the constitutional problem.

The Constitution vests legislative power in Congress, executive power in the president, and judicial power in the federal courts. But today the executive branch does most of the legislating and adjudication in the federal government, while, paradoxically, administrative agencies beyond the control of the president (or anyone else) wield much of the executive power. Checks-and-balances are dissolving in all directions, with the executive branch absorbing the powers of the other branches into an administrative leviathan, even as executive power become shielded from democratic control.

In the case of Mr. Jarkesy, the SEC used a provision in the Dodd-Frank [5] law that allowed it to seek civil penalties for fraud either in normal federal courts or in internal proceedings before its own administrative law judges. Those ALJs are civil servants who can only be removed for good cause by the commissioners of the SEC, who themselves can only be removed for good cause.

…..

The Fifth Circuit held that because Dodd-Frank’s grant of authority to the SEC to decide which cases to bring in traditional court and which to try in its own tribunals wasn’t supported by any intelligible principle, it was an unconstitutional delegation of the legislative power vested in Congress. Crucially, the court referred to the dissent by Neil Gorsuch [6] in Gundy v. U.S., which lays the foundation for significant limits on the rule-making authority that Congress can delegate to agencies.

The Fifth Circuit also observed that because agency officials exercise executive powers only in the name of the president, in whom that power is constitutionally vested, such officials must remain accountable to the president. That means the president must be able to remove them at will. For most of the past century it was assumed that if an executive official exercises quasi-legislative or quasi-judicial functions in addition to executive ones, then that official may be shielded from removal at will by the president; hence the existence of “independent agencies.”

In the past decade, however, the Supreme Court has ruled in cases such as Free Enterprise Fund v. PCAOB and Seila Law v. CFPB that there are limits to how much any official exercising executive authority can be shielded from presidential control. The Fifth Circuit took these decisions to their next logical step, holding that because the SEC’s ALJs exercise executive powers in addition to other functions, the restrictions on their removal by the president are unconstitutional.

That could severely crimp administrative adjudications, and not just at the SEC. Hence the decision will almost certainly be appealed to the Supreme Court. The decision heralds a potentially significant curtailment of the administrative state. A century after bowing to FDR’s court-packing threat, the federal judiciary may be recovering the self-confidence to enforce the Constitution’s limits on government power.

Harald Uhlig explains that academic freedom is under assault at Princeton [7].

Walter Olson rejects the case for mandatory voting [8].

Writing in the Wall Street Journal, Scott Lincicome and Emily Ekins ask why the FDA is seizing baby formula. [9]A slice:

Parental demand led to American mom-and-pop vendors selling European formula because the manufacturers wouldn’t make the effort. They even provided translated instructions. But the FDA in the past year has cracked down on these sellers. Without notice, thousands of families were left scrambling to find more formula. Parents who tried to purchase directly from Europe had hundreds of dollars of formula seized by U.S. customs agents. One parent reported that she had nearly $700 of formula destroyed at the border—in the middle of a national formula shortage.

The FDA’s actions have exacerbated the problem they were trying to solve. The agency cites concerns about storing and transporting powdered formula to avoid bacterial contamination or product deterioration. But by shutting down trusted vendors who had built a reputation on importing and selling high-quality products, the FDA drove desperate parents to untested sellers, creating the storage and handling concerns that caused the FDA to distrust European products. The difficulty finding preferred baby formula brands also increased the likelihood of inauthentic products and unscrupulous sellers taking advantage of parents in need.

James Pethokoukis points to evidence that we free traders still have much work to do to disabuse the public of fallacies about trade [10].

My intrepid Mercatus Center colleague Veronique de Rugy warns against supposing that Emmanuel Macron is a liberty-loving liberal [11]. A slice:

That sounds eloquent, but it is hard to reconcile with his first-term record. The executive in France enjoys far more concentrated and unchecked powers than in the United States. But in the name of security, Macron pushed a series of controversial laws that massively boosted the powers of both the police and the military while reducing their accountability.

A 2017 law ended the state of emergency that was put in place after the 2015 terrorist attacks, but it made permanent [12] many of the emergency measures that were embraced at the time. It continued to allow the search, seizure and house arrest of people that the Interior minister identifies, with little to no judicial review. That same minister can also close religious establishments, which mostly means mosques.

Juliette Sellgren talks with Brian Knight about woke capitalism [13].

Damon Root writes eloquently about the great Zora Neale Hurston’s “inconvenient individualism.” [14] A slice:

Some of Hurston’s contemporaries, such as Richard Wright, made their names by writing about race and racial injustice with a left-wing bent, an approach that is still plenty fashionable today. Hurston did not. In fact, Hurston denounced Communism’s demeaning influence on writers like Wright. (Wright was a member of the American Communist Party for several years before breaking with his old comrades and becoming a prominent left-wing anti-Communist.) “Mr. Wright’s author’s solution,” Hurston scoffed in a 1938 review of Wright’s short-story collection, Uncle Tom’s Children, “is the solution of the [Communist] Party—state responsibility for everything and individual responsibility for nothing, not even feeding one’s self.”

Her dissents from mainstream progressivism could be equally caustic. “Throughout the New Deal era,” Hurston wrote in 1951, “the relief program was the biggest weapon ever placed in the hands of those who sought power and votes.” More to her taste was the approach of Republican Sen. Robert A. Taft of Ohio, a libertarian-leaning conservative whose credo, as Hurston favorably summarized it, was “the people and the individual retain true liberty.” Thanks to views like that, Hurston found herself increasingly out of step in elite literary and publishing circles.