All the President’s Legal Defeats
The Wall Street Journal reviews some significant losses in the courts for the executive branch including the FCC’s Net Neutrality rule, the FCC’s rule that would have required broadcasters to verify the sponsors of programs by checking federal sources, multiple student loan relief losses, Title IX on the redefinition of sex to include gender, the Clean Power Plan defeat for the EPA claiming powers it did not have, the EPA’s weird ruling that dry land constitutes waters of the United States for regulatory purposes, the EPA’s Good Neighbor Plan on fossil fuel emissions.
The FTC is a laundry list of its own including the noncompete ban, trying to hold a minority interest liable for a company’s antitrust violations, the ability now to go around administrative tribunals by electing trial in federal court, the failed case against Meta’s acquisition of Within Unlimited, the failed attempt to block Microsoft’s takeover of Activision.
Then there’s the SEC: the failed attempt to preserve a duopoly in proxy advisory services, the failed attempt at micromanaging private contracts between asset manager and their employees, a finding of acting in bad faith towards a crypto company, failure to conduct a cost-benefit analysis and to respond to petitioner’s comments in the stock buyback rule, the denial of a bitcoin fund, and the incorrect characterization of Ripple’s token sales as illegal securities sales.
The common threads here include arbitrariness, capriciousness, and a contempt for the rule of law, evinced by a preference instead for the rule of the regulator.
‘President Biden considers himself a law-abiding fellow. But when it comes to living within the law as established by Congress, his Administration is the most lawless in long memory. His regulators keep rewriting laws as they see fit, and the result is that they keep losing in court in humiliating fashion.’
The Subprime Student Loan Debt Bubble
It’s a misnomer to talk about student debt relief. Student loan balances have exploded since the de facto nationalization. This is a nod-and-wink, doublethink entitlement for people who go to college and who borrow to do so.
War is peace. Freedom is slavery. Ignorance is strength 2+2=5.
‘It gets worse. CBO says “borrowers made payments greater than $10 in only 38 percent of the months” in which a payment was due. That means that even most borrowers who were making payments were doing so inconsistently and often in token amounts.
‘One reason is that the Democrats’ 2010 income-based repayment plans capped payments at 10% of discretionary income—i.e., income exceeding 150% of the poverty line—and canceled debt after 10 to 20 years. As a result, many borrowers had negligible required payments. But then their loan balances ballooned as they accrued interest.
After six years in repayment, the typical borrower owed 8% more than his beginning balance. A ‘quarter of borrowers owed 30% or more debt. More than 75% of those in income-driven repayment plans had rising balances. Borrowers in such plans made payments of more than $10 a month in only about a third of the months.’
California’s Tax on Arizona and Nevada
People use externalities to justify government intervention. What happens when government policies have externalities of their own?
As the number of refineries in California drop, the state’s vulnerability to disruption from maintenance or accident increases. The State wants refiners there to increase buffer stocks of inventory beyond the existing two week level. Of course, these buffers will have no meaningful impact on price, or the smoothing of price, because if they are ever drawn down, markets will realize that they need to be replenished. All California will succeed in doing here is to increase costs of refiners without improving the state’s resilience to disruption.
But it’s not just California that suffers from higher prices. Nevada and Arizona get to suffer, too. They’re not happy about it.
‘The two Western Governors on Tuesday wrote to California Gov. Gavin Newsom warning that his new plan to mitigate rising gasoline prices will backfire and harm their citizens. “It is evident that increased regulatory burdens on refiners and forced supply shortages will result in higher costs for consumers in all of our states,” they write.
‘California refineries supply nearly 90% of Nevada’s gasoline and half of Arizona’s market. Regulations that raise costs on California refineries raise prices at the pump in Arizona and Nevada. This is why gasoline prices in Nevada ($4 a gallon) and Arizona ($3.42) are higher than the national average ($3.23) despite their low state gas taxes.’
The End of the Chevron Doctrine Is Bad for Business
When it comes to regulation, Harvard Business Review prefers certainty to arbitrariness. They have no faith in Congress’ ability to write proper legislation. The argument here is that investment will fall. They also forecast incumbents using litigation to block new rules that impose costs on their operations, even as incumbents fight new rules that seek to open up markets.
This kind of linear thinking needs to be bookmarked. Let’s see if they turn out to be correct.
‘We believe, rather, that the court’s rulings will suppress business investment in unintended ways, leading to less innovation and reduced competitive advantage for U.S. businesses. This will be especially true for start-ups working with new and emerging technologies, including AI, cryptocurrency, biotech, and renewable energy. That’s because business investment will now take place against the backdrop of what we call the “judicial veto,” where a wide range of potential litigants and sympathetic judges will decide which regulations actually go into effect, and when. For business leaders, that will translate to an investment climate that is not “more predictable and stable,” but less, with uncertain outcomes, timeframes, and an edge for established businesses with the experience and the cash to stifle competition through the courts.’
Platform Regulation After the Supreme Court’s NetChoice Ruling
Here’s a review of the recent litigation regarding censorship of content on the social media platforms.
‘Thankfully, the Court rejected the attempts by Texas and Florida to override the content moderation policies of social media platforms without overreaching. Applying decades of precedent, Justice Kagan, writing for the majority, explained that social media companies have the same First Amendment rights as any other private actor, such as newspapers, to select, edit, and remove the content on their platforms. This is a win for free expression and for social media users. As we explained in our brief, the Texas and Florida laws “would have deleterious effects on the functionality and usefulness of social media platforms, including requiring or incentivizing them to publish pro-terrorist content, hate speech, spam, Holocaust denial, snake-oil ‘medical’ claims, lies about the time and place of elections, and fraud.”
‘Requiring that social media companies carry content of this kind does not promote free expression – it corrodes it. At the same time, the First Amendment protects platforms that choose to adopt more hands-off policies in some areas, such as Elon Musk’s X, formerly Twitter. Users should be able to use social media platforms that take different approaches to content moderation, not one-size-fits-all policies imposed by politicians that openly state a wish to force platforms to host and promote conservative viewpoints and to punish companies whose editorial standards they disagree with.’