Category Archives: Rule of Law

Republicans Adopt Dirty Rotten Democrat Trick

Do you remember budget debates, where the Democrat would say “it’s a severe budget cut”? He would claim a 3 percent cut. This was a dirty, rotten trick. Here is how it works.

For example, last year’s budget was $100. They project $105 this year, and for whatever reason—inflation, need, population growth—that is assumed to be the new baseline. Suppose the legislature passes a budget for this year, of $102. In reality, this is an increase of two percent.

However, the Democrats would spin it as a cut of three percent. If Republicans hold the majority, then they are so mean to hurt widows and orphans. If Democrats hold the majority, then they are showing fiscal responsibility.

But of course, it’s not a cut. It’s an increase.

Fast forward to today, when Republicans have found a way to exploit this ideas. It’s not the budget, but regulations. They claim that President Trump has cut regulations by 30 percent. This is a subtler use of the old dirty rotten trick, so let’s look at how it works.

Trump supporters point to the Federal Register. This is the government’s publication of new regulations. In 2017, the Federal Register contained about 30 percent fewer pages than in 2016.

We will ignore two problems with the quantity theory of pages in the Federal Register. One, the Federal Register contains other material than just new regulations. Two, not all pages are created equal. A page that repeals the monstrosity of Dodd Frank is good, whereas a page increasing the federal minimum wage to $15 is bad. Even new regulations are not all created equal. A hike of the minimum wage is more damaging than a rule saying employers must provide bathrooms for employees.

Anyways, for the purpose of this discussion, let’s accept page count as a proxy for regulation. The dirty rotten trick is that the Federal Register is the publication of new regulations. If the 2017 edition had over 30 percent fewer pages, that does not mean that Trump removed 30 percent of existing regulations.

It means Trump added over 60,000 pages of new regulations, which is 30 percent less than Obama’s over 95,000 pages!

The government publishes the complete set of all existing regulation. This is not the Federal Register, but the Code of Federal Regulations. The page count for 2017 is not available yet (that I could find in 15 minutes of Googling), but if you look at some of the years under President Reagan, you see lower Federal Register page counts but rising Code of Federal Regulations page counts. That is what is happening today also.

Indeed, promoters of the Trump Deregulation Story often quote work by the Competitive Enterprise Institute. Here is a link to their 9,999 Commandments. CEI has done a lot of analysis of page counts in the Federal Register. And they acknowledge that Trump did not deregulate. From 9,999 Commandments:

This analysis [by the Mercatus Center at George Mason University] found that “the numbers don’t show a massive deregulation—in fact, they show that the quantity of regulatory restrictions actually grew. But it grew by less than we might have expected based on historical patterns.”

Unfortunately, this subtle truth has been drowned out by the unsubtle cheering of Trump’s deregulation.

The confusion of Federal Register and Code of Federal Regulations is like the confusion of the deficit and the debt. The deficit is how much more we add to the debt this year. Proponents of the Paul Ryan budget plan in 2012, for example, sometimes said he was reducing the debt, when the plan proposed a lower deficit. That is, Ryan proposed to increase the debt—more slowly than President Obama did.

Why The Founders Didn’t Give Us a Democracy

As the famous story goes, when Ben Franklin left Independence Hall after the Constitutional Convention in 1787, Mrs. Powel of Philadelphia had a question she wanted answered.

“Well Doctor, what have we got, a republic or a monarchy?”

Franklin replied, “A republic, if you can keep it.

No one today (well, seemingly other than the current president) wants a monarchy. However, too many call our once-Republic a “democracy”. They love the idea of the will of the people, directly determined by vote and imposed by force of law.

The primary argument against this form of government is that it’s tyranny. A majority has no right to take away the rights of any individual, no matter how unpopular he may be. However, that is precisely the consequence of giving the people the power to vote for anything, with no constitutional limits to the power of government.

Let’s explore another argument against democracy. I just published an article critical of a gold initiative in Switzerland. Of course, I favor the re-monetization of gold. That is not why I think the initiative will do more harm than good. I looked at the economics of the banking system, and concluded that the law could cause bank insolvencies. If the banks fail, there goes the people’s money.

No layman would see the problem, unless an expert explains it. Indeed, a hundred thousand laymen signed the petition to put this initiative on the ballot. They simply want to move towards the gold standard and stop their central bank’s endless currency debasement, and robbery of the saver.

Too often, scoundrels hide behind their proclaimed good intentions, which is typically an appeal to collectivism. Then they claim the bad outcome was unintended. It’s disingenuous. If you hike the minimum wage, for example, you will cause higher unemployment. Workers who produce less than the cutoff are always laid off.

In the case of the Swiss gold initiative, the promoters are appealing to honesty and justice. I do not doubt the good intentions of the people behind this initiative. I am sure they mean well. Whether their intentions are good or not, the law has bad consequences. It’s based on an economic mistake.

This exemplifies another fundamental and irreparable flaw in democracy. Even well intentioned people have limited knowledge. No one can be an expert in everything. Yet, that is precisely what democracy requires. It assumes that because the people have an interest in the outcome, they know what will lead to good outcomes.

If your car breaks down, do you sample the opinions of nearby motorists, in order to know how to fix it? If you are sick, do you ask for medical advice from other patients in the hospital ward? No, you call a mechanic or a doctor. What if your monetary system is broken down and sick? Everyone suffers from the monetary disease, but that doesn’t make them experts in monetary economics. In the same way, motorists or patients are not experts in engines or healthcare. In order to work, Democracy depends on everyone being an expert in everything.

This is one more reason why your life should not be ruled by the decisions of others. Even when those decisions truly are well intentioned, they can still hurt you. Democracy is not the right form of government.

This is why the Founding Fathers gave us a republic.