George Will’s latest column is on an important case to be heard on Wednesday by the U.S. Supreme Court. Two slices:
The use of agencies’ courts began in the 1970s. In 1994, law professor Gary S. Lawson — then at Northwestern, now at Boston University — published a Harvard Law Review article (“The Rise and Rise of the Administrative State”) describing what he called the typical enforcement activities of a typical federal agency, the Federal Trade Commission:
“The Commission promulgates substantive rules of conduct. The Commission then considers whether to authorize investigations into whether the Commission’s rules have been violated. If the Commission authorizes an investigation, the investigation is conducted by the Commission, which reports its findings to the Commission. If the Commission thinks that the Commission’s findings warrant an enforcement action, the Commission issues a complaint. The Commission’s complaint that a Commission rule has been violated is then prosecuted by the Commission and adjudicated by the Commission. This Commission adjudication can either take place before the full Commission or before a semi-autonomous Commission administrative law judge. If the Commission chooses to adjudicate before an administrative law judge rather than before the Commission and the decision is adverse to the Commission, the Commission can appeal to the Commission. If the Commission ultimately finds a violation, then, and only then, the affected private party can appeal to an Article III court. But the agency decision, even before the bona fide Article III tribunal, possesses a very strong presumption of correctness on matters both of fact and of law.”
Incestuous, isn’t it? Today, Lawson says, the FTC still can operate like this, and other agencies often exercise such abusive power.
The Institute for Justice is representing in an appellate court Joe and Russell Marino, former operators of a New Jersey vegetable farm, which has closed largely because of financial uncertainties caused by the Labor Department. In 2016, department agents notified the Marinos that they were being penalized more than $550,000, with over $320,000 of that because of a single paperwork error. Thus began a five-year ordeal before Labor Department agency judges. After the Marinos lost a four-day trial before a 25-year Labor Department employee, they appealed to a panel of five more judges appointed by the labor secretary. Unsurprisingly, they lost. The government is still trying to penalize them more than half a million dollars without allowing them their day in a real court.
…..
By resisting such abuses, [George] Jarkesy, like the Institute for Justice, is defending the nation’s constitutional structure against unaccountable agencies operating as a fourth branch of government. Jarkesy is asking the Supreme Court to demonstrate, for the benefit of everyone but administrative state bureaucrats, something that Alexander Hamilton said (in Federalist 78) would be required to defend the Constitution against depredations by the elected branches: an “uncommon portion of fortitude.”
In “A New Approach to Taxes That Pays Its Own Way” (op-ed, Nov. 20), Brian Deese and David Kamin depict a U.S. government starved of revenues and tell us, “The tax system of the 1990s could have financed the government we have today.” But the U.S. tax system of the 1990s collected only about 18% of gross domestic product. After the pandemic spending binge, during which the authors’ Biden administration didn’t have spending pay its own way, the federal government is now spending 24.2% of GDP.
They tell us that the 2017 tax cut went largely to high-income individuals. But the nonpartisan Joint Committee on Taxation found that it made the world’s most progressive tax system even more progressive. As to their argument that more tax cuts should go to low-income individuals: refundable tax credits to people who don’t pay income tax is welfare, not a tax cut
The Deese-Kamin argument for corporate tax increases has appeal only because people don’t understand that a corporate tax first falls on consumers, and then on workers and owners. Some 70% of corporate America is owned by your public and private pension funds, 401(k)s, IRAs and annuities. Finally, they call for a new federal property tax on the appreciated value of your home, your retirement plan and your other assets. It makes you wonder if there is really anybody who thinks the fruits of President Biden’s spending binge are worth all this.
Phil Gramm and Mike Solon
Helotes, Texas, and Alexandria, Va.
Mr. Gramm was chairman of the Senate Banking Committee.
Gary Galles revisits the argument that insists that government is too small. A slice:
Contrast the knowledge required to make an informed decision about alternative national health insurance policies to that of selecting your own private health insurance plan. When selecting your own plan, you already know a great deal about your health history and at least a fair amount about your family’s health histories. Also, you need not worry about the effects of your choices on others, because your choices will not alter the market. But in considering national policies, you must consider all the health issues facing anyone, as they will have a sizable effect on the market. Further, you would need to know a large number of relevant elasticities of supply and demand, since that would affect the relevant magnitudes of the effects. And you would have to understand many other issues, as well as have some familiarity with the likely magnitudes, such as arise from adverse selection, moral hazard, technological changes in medicine, and so on.
Pierre Lemieux is correct: The probability of despotism is not zero. (Indeed, it’s well above zero.)
Timothy Taylor chews over a Thanksgiving meal.
John Cochrane is pro-dollarization of Argentina’s economy.
“US Corn Farmers Defy a Scorching Summer to Grow Record Crop.”
What would Friedman make of the conservative movement today? In his lifetime, Friedman argued relentlessly against conservative populists from Joseph McCarthy to the John Birch Society, which he called the “crackpot conservatives of the radical right fringe.” Determined to rescue American conservatism from these “fringe” elements, Friedman leveraged his fame and academic success to redefine the center-right as a source of intellectual innovation rather than blind reaction.
Yael Hungerford ponders “liberal arts and the future of the university.” A slice:
Administrative offices tasked with educating students and faculty on how to promote Diversity, Equity, and Inclusion do not belong in academia. Bureaucracies that police how faculty and students speak through trainings and investigations are particularly pernicious. As Tocqueville noted, there is already a strong tendency in democracies toward groupthink. All the more reason why, if universities as institutions ought to have any agenda, it should be to rigorously protect and promote the scholarly virtues of open inquiry, logical analysis, and empirical testing.
