Freedom is declining in America. The Heritage Foundation-Wall Street Journal Index of Economic Freedom ranks the United States at #12, as does the Fraser Institutes Economic Freedom of the World Index. The U.S. ranking has slipped in recent years according to both studies and now scores significantly below Hong Kong, Singapore, Chile, Canada, Australia, Switzerland, and New Zealand.
According to the Heritage Foundations description of its Index of Economic Freedom, In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself. The Heritage Foundation notes that greater economic freedom is associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination. The Fraser Institutes definition of economic freedom is similar, and it also notes the similar connections between economic freedom and favorable economic outcomes.
Not only is economic freedom the wellspring of prosperity, it is essential to all other individual freedoms. If the government can control your work, spending and property, then it can leverage that power to control all of your actions. A legal right to freedom of speech and assembly, therefore, is worth little without significant economic rights.
How did Americans become significantly dispossessed of their economic freedom? There is much talk in the news these days about Presidential overreach through Executive Orders and Memoranda in areas such as immigration and health care, but unfortunately, Presidential actions are only a small part of the problem and White House overreach is reversible when a new Administration takes office. At the heart of the matter is the growth of unaccountable law making and law enforcement within administrative agencies, which marks a significant erosion of the rule of law.
The number of agencies that enact, enforce, and adjudicate disputes over their own regulations has grown exponentially over the past century. Agencies such as the Environmental Protection Agency, the Occupational Safety and Health Administration, the National Highway Traffic Safety Administration, the National Labor Relations Board, the Federal Communications Commission, the Federal Trade Commission, the Interstate Commerce Commission, the Consumer Financial Protection Bureau, the Securities Exchange Commission to name only a small number are given vast authority by Congress to draft regulations that implement the legislative intent of what are often broad and vague statutes. The agencies set and enforce rules that apply to businesses and individuals, and also preside over disputes by citizens or firms who object to them.
In principle, Congress could alter regulations it regards as undesirable, but that seldom occurs. In 1996, the Congressional Review Act attempted to encourage Congressional review of agency actions. As of May 2008, however, only 47 joint resolutions of disapproval had been introduced in both houses of Congress, relating to just 28 rules. During the same time period, Federal agencies had promulgated 47,540 rules. And while it is also true that U.S. courts retain authority to hear cases related to agency actions, they are not the primary adjudicators of regulatory disputes, and appeals to the courts are challenging to accomplish.
The new trend in regulation has been the use of guidance as a means of avoiding even informal rulemakingthe laxest kind of executive lawmaking that requires only public notice, a comment period, and detailed explanations of an agencys decision. Agencies are now free to guide the nation without even these simple procedures, giving only vague guidance about the considerations they will take into account in bringing enforcement actions.
Neither does the new reliance on guidance imply any burden of explanation. A recent decision by the National Labor Relations Board broadened the definition of employers, creating huge new potential liabilities for franchising companies like McDonalds. Upon request for clarification of the logic underlying its decision, the NLRB declined even to share internal memoranda, stating that it was reserving those for prospective litigation.
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Government By 'Guidance' Quashes Economic Freedom And Rule Of Law