All Things in Moderation

There is an op-ed article today in the WSJ, unfortunately behind the firewall, that unwittingly lays bare the unconstitutionality of the regulatory state as it currently exists in the US. The article was written by former Chairman of the SEC, Arthur Levitt Jr., and is ostensibly a critique of Senator Elizabeth Warren’s call for current SEC Chairman Mary Jo White to be removed for failing to implement a “rule” regarding corporate political donations that Warren favors. Levitt correctly calls out Warren for improperly trying to influence the SEC’s “agenda”, but his reasoning reveals the mindset of these unelected bureaucrats and how shamelessly unmoored from the Constitution the regulatory state has become.

Levitt says:

No rule—no matter how merited—is worth the damage that would be caused if the SEC were compelled by political intimidation to write it. That’s not how good regulations emerge, and what’s worse, it would poison the regulatory process for all time. The moment the SEC loses its ability to set its own agenda is the moment it loses its ability to protect the investing public.

The SEC does not operate as a pass-through entity for Congress, merely following congressional direction. Rather, it’s an independent agency, and its chairman is empowered to set the agenda for the agency’s work. This agenda takes shape in many forms—rule makings, speeches and enforcement actions—and must be set by the chairman, not Congress. This is by design.

Say what? The “agenda” of unelected bureaucrats agency “must be” set by themselves and not by the elected members of Congress? Perhaps Levitt would like to point out where in the Constitution such bureaucrats have been granted this rather awesome power. Contrary to what Levitt seems to think, that the SEC is supposed to operate as a “pass-through” entity for Congress, following its direction, is the only way it can operate that would justify its existence.

Levitt goes on to say:

That’s not to say the agency should be free from congressional oversight. Throughout its history, politicians from both parties have sought to influence its work. That’s to be expected, and a good regulator welcomes outside views, especially those coming from elected leaders who write the laws the SEC implements. Ultimately, Congress holds the power to pass laws requiring agency action; and that option is available to Sen. Warren.

But Congress must respect the SEC’s independence, and thus freedom, to focus on a fixed agenda. Once confirmed to lead the SEC, its chairman has a singular goal: To meet the agency’s mandate to protect investors, facilitate capital formation, and ensure fair and orderly markets.

Well, isn’t that generous. Good regulators should “welcome” the “outside” views of elected representatives, the very people who are actually empowered by the Constitution to write legislation.

Levitt is of course correct to inform Warren that if she wants to impose a new law, Congress has the power to do exactly that through actual legislation. But it is precisely the vaguely defined regulatory “mandate” that Levitt himself embraces which allows the likes of Warren to think that she can impose new laws without the hassle of actually going through the constitutional process.

This is an excellent example of how pervasive and shameless the undemocratic, unconstitutional mindset that typifies the regulatory bureaucracy has become.

(This link may or may not work to get the article…not sure: http://on.wsj.com/2e3zIc8)

Filed under: big government, Constitution, Economy, politics | 37 Comments »