Washington is in a regulatory growth spurt. Hundreds of rule-making proceedings are underway or impending under the Wall Street Reform and Consumer Protection Act (Dodd-Frank) and the Patient Protection and Affordable Care Act (ObamaCare), both enacted in 2010. The Environmental Protection Agency (EPA) is pursuing many hugely expensive pollution-control initiatives. The Federal Communications Commission (FCC) wants to regulate the Internet. Agencies are tightening highway fuel-economy standards and banning the incandescent light bulb. Federal price controls, out of favor since the wage-price controls of the 1970s, are making a comeback in health insurance and debit cards.

Congressional Republicans are up in arms over these developments. The arrival of the Tea Party class of 2010 produced prompt moderations in the trajectories of taxing, spending, and borrowing, all of which require periodic legislation. Yet the current partisan divide is illusory. The modern regulatory state is a thoroughly bipartisan enterprise. During the half-century before President Obama’s election, the greatest growth in regulation came under Presidents Richard Nixon and George W. Bush. And the Bush administration set the stage for many of the Obama initiatives that Republicans are now attacking.

In this seminar, students will explore the challenges of regulatory growth. What are the sources and consequences of regulatory power? Can our regulatory state be reformed, and what strategies might be effective in constraining regulatory power?

Christopher DeMuth on reforming the administrative state

Faculty

Christopher DeMuth

Christopher DeMuth is a Distinguished Fellow at the Hudson Institute in Washington, D.C. He was President of the American Enterprise Institute for Public Policy Research from 1986–2008 and D.C. Searle Senior Fellow at AEI from 2008–2011.

Preview the Syllabus by Week/Session

Readings: 

 

Discussion Questions:

  1. Why, in Tocqueville’s view, are Americans vulnerable to the sort of despotism that he describes? From the other readings, and from your own experience, do you think that Tocqueville’s predictions have proven accurate?
  2. What are the sources of regulatory growth? In what sense is regulatory growth a problem? Are the reform measures currently under consideration likely to affect regulatory growth or improve the substance of regulatory policies?

Readings:

 

Discussion Questions:

  1. Why, in Posner and Vermeule’s view, has policy-making power migrated from the Congress to the Executive Branch? Does this change in government structure present serious problems of democratic accountability and/or policy substance? Is the separation of powers really a dead letter?
  2. Is the REINS proposal a plausible corrective to the problems of unilateral Executive government? Is greater legislative participation in regulatory policy-making practicable and desirable? Does REINS seem well suited to the characteristic deficiencies of regulation that we have examined?

Readings:

 

Discussion Questions:

  1. Was the SEC’s proxy rule a fair application of Congress’s statutory mandate on the subject? Who made the important policy decisions—Congress or the Commission?
  2. Was the SEC’s decision convincing? Did it give you a good idea of the purposes of its rule and the evidence and reasoning that led to its policy choices? Did the cost-benefit analysis, and the various procedural hoops the Commission was obliged to jump through, seem to help or hinder its decision?
  3. Was the Court of Appeals decision convincing? Did the court apply the law at hand or substitute its policy judgment for that of the SEC?
  4. As a check on the discretion of regulatory agencies, which seems preferable—an economic (cost-benefit) check wielded by the courts or a political (REINS) check wielded by Congress?

Readings:

 

Discussion Questions:

  1. Was the Inquiry Commission report a useful exercise in identifying the causes of the collapse and proposing measures to reduce the likelihood of another one? Who did a better job of identifying causes and cures—the Commission majority or the dissenter?
  2. Did the financial collapse amount to a “crisis of capitalism” or a “crisis of government”? Did private financial markets prove to be inherently unstable? Did the government’s involvement, before and after the collapse, improve or worsen the operation of private markets? Did private financial firms abuse their economic power?
  3. What further lessons do the financial collapse and government response provide on the questions addressed in our previous sessions—concerning the nature of regulation, the growth of Executive power at the expense of the Congress, and the utility of the various regulatory reform measures currently being considered?

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