Holman Jenkins’ column on the regulatory state is one of the best in recent memory.
The problem today isn’t just the size and scope of the 4th branch of government and its regulations. It’s the scope of regulatory activism and its reach into our lives.
[Rent-seeking is] the term economists use for exercising government power to create private gains for political purposes. Consider:
Mr. Obama’s bank policy dramatically consolidated the banking industry, which the government routinely sues for billions of dollars, with the proceeds partly distributed to Democratic activist groups.
His consumer-finance agency manufactured fake evidence of racism against wholesale auto lenders in order to facilitate a billion-dollar shakedown.
His airline policy, urged by labor unions, led to a major-carrier oligopoly, with rising fares and profits.
His FDA is seeking to extinguish small e-cigarette makers for the benefit of Big Tobacco and Big Pharma (whose smoking-cessation franchise is threatened by cheap and relatively safe electronic cigarettes).
His National Labor Relations Board, by undermining the power of independent franchisees, is working to cartelize the fast-food industry for the benefit of organized labor.
We could go on. Mr. Obama’s own Council of Economic Advisers complains about the increasing cartelization of the U.S. economy—as if this were not a natural output of regulation. In a much-noted Harvard Business Review piece this spring, James Bessen, an economist, lawyer and software entrepreneur, cites increased “political rent seeking” to explain the puzzle of rising corporate profits in the absence of job creation and economic growth.
I recommend Bessen’s article to you. It’s eye-opening.
The problem with the regulatory state is how it advances special interests in the name of the public interest. As long as it goes on unabated, we all lose.