Wednesday, March 1, 2017

Defending Conservatism, Part 5: The Imperative of Predictable Laws and Regulations

Consequentialism is tempting.


It is easy to look at a situation, see the aggrieved or oppressed party, and believe that government must step in with whatever resources it has available. (In general, this is a good impulse, but it must be backed by the text of the law.) This was, essentially, what the Obama administration opted to do, time and time again. After losing the House in 2010, and the Senate in 2014, rather than being chagrined by his electoral defeats, President Obama declared that he had a “pen and phone” to make the changes he wanted to make. This was a tendency throughout his entire administration: in the face of resistance from the American system, Obama attempted to circumvent it using extralegal powers, rather than attempting to work within its confines.


That the Congress refused to act on his priorities should not have been an invitation to do so unilaterally. But he did, over and over and over. A few examples: he dramatically expanded the scope of the waiver power in the implementation of No Child Left Behind; he took executive discretion to unprecedented levels in the enforcement of immigration laws with his “deferred action” programs; he modified the Affordable Care Act over and over; he restructured the auto bailout in ways contrary to standard bankruptcy practices; and he expanded the scope of federal regulation dramatically beyond that of his predecessors, in ways often far beyond what a plain reading of statute would allow.


The American system of government has millions of procedural roadblocks to getting things done. While this is often frustrating for those in power, it is by design that the system requires broad consensus, or multiple elections pointing in the same direction, to make changes. After 2010, President Obama never had that consensus. But President Obama wanted a legacy, and he wanted to make a difference in people’s lives, so he felt compelled to act where he could and to stretch the limits of executive power.


These sorts of actions breed toxic policy uncertainty: when the executive branch has such discretionary power, businesses must operate scared, and markets don’t work as intended. There are intrinsic benefits to policy certainty, even if it doesn’t lead to the outcome that we desire. Predictability is a valuable asset for personal and business planning. An example: some businesses may well benefit from the impending destruction of the Affordable Care Act, but any such benefits could be destroyed by the costs of planning for the impending upheaval.


The best example of “policy uncertainty” in the Obama administration would be the bailout of General Motors. President Obama opted to give the secured creditors a “haircut” in the bankruptcy settlement in the interests of the United Auto Workers. While it must have been satisfying to pay back a client, and to help autoworkers instead of investment bankers, American bankruptcy provisions work because they are predictable and stable. A world where secured creditors do not get the first bite at the apple is a world with less investment and less stability, as businesses avoid the risk of getting hammered on a bad investment and an unfavorable White House.


Policy uncertainty also requires that businesses develop a greater footprint in Washington DC. This is a wholly-negative development in American politics and society. Every dollar that a medical research company spends on lobbying to get a more favorable deal from the government is an unproductive dollar, in terms of potential research. A lobbyist can buy a nicer house in Fairfax County, Virginia, and the local economy there booms (as it has for decades). But this is not--and should not--be the end aim of government. (This is, of course, what Jeb Bush was alluding to when he suggested that Washington DC needs a recession.) The more that government can grant a business, the more likely that businesses are to dedicate resources towards swaying the government.


If I’m an investor in the post-GM world, it might make more sense to focus on the regulatory climate and how favorably or unfavorably I am viewed by the powers that be than on my core business. The real risk here is favoritism and cronyism: where businesses get a better or worse deal from government based on the whims of the current executive. This is deeply unfortunate, and has only been expanded by President Trump, with his “government by Twitter” approach to industrial policy.


This is a long-winded way of suggesting that we are better off operating in a world where laws mean what they say and are enforced accordingly, rather than subject to flexible interpretation by the executive branch. The implementation of the Affordable Care Act was a textbook example of the alternative. Because of the election of Scott Brown, the Democrats never had the chance to form a “conference committee” to clean up errors in the Senate and House versions of the bill. The bill that became law was the sloppily-drafted Senate bill. The Obama administration unilaterally opted to modify the law with broad executive discretion. (One count suggests 70 separate changes to the law by executive action.)


We should accept a bipartisan limit on executive power and discretion because sometimes, the person in office is one we’d like to restrain. One has more moral and practical power to oppose executive overreach if one critiques it even when it ostensibly furthers one’s policy priority. In other words, we should oppose the Obama administration’s ad hoc conference committee of executive discretion that implemented the Affordable Care Act, as well as the Trump administration’s sweeping executive order granting overly broad enforcement discretion on the ACA to his Cabinet agencies.


Consequentialism also underlay President Obama’s philosophy in picking judges, which is also worth critiquing. In a 2007 speech, he said,


We need somebody who's got the heart, the empathy, to recognize what it's like to be a young teenage mom. The empathy to understand what it's like to be poor, or African-American, or gay, or disabled, or old. And that's the criteria by which I'm going to be selecting my judges.


In opposing the nomination of John Roberts (who, oddly enough, saved the Affordable Care Act from destruction), Obama went further:


In those 5 percent of hard cases, the constitutional text will not be directly on point. The language of the statute will not be perfectly clear. Legal process alone will not lead you to a rule of decision. In those circumstances, your decisions about whether affirmative action is an appropriate response to the history of discrimination in this country or whether a general right of privacy encompasses a more specific right of women to control their reproductive decisions or whether the commerce clause empowers Congress to speak on those issues of broad national concern that may be only tangentially related to what is easily defined as interstate commerce, whether a person who is disabled has the right to be accommodated so they can work alongside those who are nondisabled -- in those difficult cases, the critical ingredient is supplied by what is in the judge's heart.


This is, in short, a consequentialist’s manifesto: in the tough cases, put your thumb on the scale. Use your power not out of a desire for uniform, principled, or predictable exercise of power, but to address wrongs. Stated differently, “you’re only president (or justice) once!” But this sort of view is ultimately dangerous for the rule of law, as we become more subject to the personal whims of those in power, rather than the text of a law itself. Text is predictable; people are not. A mode of judicial interpretation that focuses on the original meaning of text in its analysis--as advocated by the late Antonin Scalia and the extant Clarence Thomas--is the fairest way to get to a society founded on the rule of law. This is aspirational, of course; one may never get to the beau ideal of the form. But the alternative is explicit discretion.


Discretion, too, has cascading effects: if legislatures know that courts will read for “intent,” they can draft more haphazardly. Contrarily, if legislatures know that courts will read their words closely, then they will draft laws more carefully and circumspectly, which is for the better.

In general, our approach should be less focused on consequence and more focused on process. Conservatism, well understood, gets us there.

In part 6, I will argue for the legitimacy of tradition.

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