The term “regulatory state” describes governance through rules issued by administrative agencies rather than through statutes enacted by a legislature. Across these episodes, guests and callers treat it as the central mechanism by which the federal government exercises power over Americans, and as a departure from the civics-class account in which laws are passed by legislators and signed by the president.
Origins and mechanism
Bob Zadek opens one episode with the framing that in early civics classes students are taught that laws are made by the legislature, approved by the executive, and that the remedy for disliked laws is to vote out the legislators. He then says Americans are governed by what are in effect laws “but these laws have not been enacted by anybody we even know about, let alone voted for or approved.” A Lame Duck’s Last Stand (2017)
His guest, Sam Batkins, contrasts high school civics with reality and states that last year regulators approved roughly 3,600 federal rules, of which roughly 100 were considered “major.” He identifies the Environmental Protection Agency as an agency to which Congress has delegated a lot of power, and lists further regulators including the FCC, SEC, CFTC and CFPB, counting something like 52 regulatory agencies, excluding sub-agencies, by one effort to count them. A Lame Duck’s Last Stand (2017)
The mechanism of that delegation is discussed in a later episode by a caller and the host. Caller Roger argues that the regulatory state is not elected, so “even a majority can’t control it,” and cites data that people can vote on something like half of a percent of all federal government employees, with the remainder outside the electoral process; he also notes statutory phrases such as “the Secretary shall decide,” which he says appear throughout Obamacare, as instances of Congress punting to the regulatory state. Bob Zadek responds by invoking a principle of law he calls the “non-delegation principle,” which he says holds that Congress lacks the constitutional power to delegate legislative functions to the executive. He adds that a theory holds the entire function of the administrative state unconstitutional as an unfair delegation of power from Congress to the executive branch. Carol Berkin on The Bill of Rights No One Wanted (2016)
Midnight regulations and deregulation
Sam Batkins is introduced as a director of regulatory policy at the American Action Forum, and the episode with him examines the regulatory state generally and “midnight regulations” in particular. Bob Zadek describes midnight regulations as something listeners “will learn to fear,” and the episode’s framing states that he and Batkins discuss the proliferation of such regulations in the final days of the Obama administration, the legal mechanisms of the regulatory state, the delegation of power from Congress to unelected agencies, and the challenges the incoming Trump administration faces in attempting to deregulate through the Administrative Procedure Act and the Congressional Review Act. A Lame Duck’s Last Stand (2017)
Overcriminalization and the regulatory tangle
Brian Walsh, discussing overcriminalization, describes how Congress in new legislation will put in a provision that violations of a section, or of regulations and rules promulgated under it, “can be punished by five years in prison or whatever else it might be,” which he characterizes as a blanket criminalization of any new regulations unelected bureaucrats later promulgate. He calls this a destructive trend. “You’re Under Arrest!”: Overcriminalization with Brian Walsh (2015)
Both men note the absence of lobbying for those caught in this environment. Bob Zadek says there is no strong lobby that aggressively and effectively lobbies for people incarcerated for benign technical violations, with the exception of libertarians, whom he describes as having liberty as a core lobbying value. Brian Walsh largely agrees, saying there aren’t really lobbying organizations, though he notes a coalition of organizations on the left and the right, naming the National Association of Criminal Defense Lawyers, the Heritage Foundation, Cato Institute, Institute for Justice and the Federalist Society. “You’re Under Arrest!”: Overcriminalization with Brian Walsh (2015)
Walsh’s central example is Krister Evertson, described as an inventor who spent about $100,000 of his family’s money trying to invent clean energy cells and who had been fascinated by the idea since high school; Walsh says he met Evertson and that Evertson testified in Congress. As Walsh tells it, Evertson, facing financial problems, sold some materials over eBay, shipping them in a properly insulated container, but failed to put the right sticker on the package; the regulation requiring the sticker was created by a bureaucrat someplace, and no federal official could show what the sticker was supposed to look like. Evertson was acquitted on that charge after his public defender showed that the UPS agent who received and shipped the package had lied, but the feds then prosecuted him for having “abandoned” his materials, which were stored in half-inch thick stainless steel drums with no leakage. Because they did not have to prove criminal intent on the second charge, Walsh says, Evertson was found guilty, spent two years in federal prison, and had his livelihood destroyed; the last time Walsh spoke with him he was living on a trailer in a construction site. “You’re Under Arrest!”: Overcriminalization with Brian Walsh (2015)
A caller in the later episode raises a related point, saying that the major challenge to liberty today is the regulatory state, which is not even elected and so cannot be controlled by a majority. Carol Berkin on The Bill of Rights No One Wanted (2016)
Judicial deference and the Bill of Rights
In the episode with Carol Berkin, Bob Zadek answers a caller’s question about how the Ninth and Tenth Amendments were lost by saying “They got lost through judges. It’s all Supreme Court’s handiwork.” He attributes that loss to what he calls judicial deference, which he says allowed Congress to be its own policeman as to what is constitutional, and he places the fault “foursquare in the Supreme Court,” adding that Congress behaved as it naturally would by collecting power, and that it was for the Supreme Court to stop it by reading the Ninth and Tenth Amendments aggressively. Carol Berkin on The Bill of Rights No One Wanted (2016)
Berkin’s own contribution in the excerpt concerns the Tenth Amendment, which she says the Anti-Federalists wanted to nail down so that Congress could not do anything not expressly mentioned as its right to legislate about. She says that if “expressly” had been in there, there would have been no Bank of the United States and no acquisition of Louisiana, and that today the federal government could not enforce traffic laws or build highways; prompted by Zadek, she agrees the federal government could not have had the EPA, because it was not expressly authorized. Carol Berkin on The Bill of Rights No One Wanted (2016)
Federalism, spending and the regulatory tangle
Frank Buckley, speaking with Bob Zadek, describes the federal government’s so-called “spending power” as its ability to suck up money and send it back to the states with strings attached, and says that because of “the thickness of our regulatory state,” basic decisions are run out of Washington in a way that would surprise a lot of people, giving highway decisions and bike lanes in a small community as examples tied to federal mandates or federal spending powers. He says there is no reason for that, and that it is not the case that the best set of rules comes out of a small group of people in Washington. He also notes a net transfer from rich to poor states, from the Californias to the Mississippis, which he says makes separation politically attractive for many Californians, and cites the “Yes California” campaign’s argument that the state gets less from Washington than it sends. Did California Just Declare Itself a Nation-State? (2020)
Zadek’s own proposal in that exchange is to have Washington return money to the states through block grants on some fair basis, with money returned to the states to use within very broad guidelines, and then, once that is determined to be silly, to reduce federal taxes and federal power while increasing state taxes and state power if the states wish. He frames this as readjusting the money, which he calls the elephant in the room, as a condition of what he calls a peaceful de facto secession. Did California Just Declare Itself a Nation-State? (2020)
Business, stakeholders and politicization
Ed Freeman, discussing stakeholder value, says that if interests are not gotten going in the same direction over time in a free society, those interests will go to government to get their interests taken care of, “as we see with regulations like the Wagner Act, the Fair Labor Practices Act, all the environmental regulation, a lot of the Uniform Commercial Code.” He says that saying one interest is more important than another tends to lead to mistakes and to “this impossible tangle of politicization of business and the regulatory state.” Stakeholder Value: A New Story About Business (2021)
In the same exchange, Zadek asks whether a corporation pays attention to the environment not from moral responsibility but so that government will not come down with a heavy hand, increasing costs more than the corporation’s own spending would; Freeman answers that one can frame it that way, that there are lots of reasons for paying attention to the environment, including finding ways to do things better, faster and cheaper and because employees care, and that he does not see the need to reduce it all to one story about profitability. Stakeholder Value: A New Story About Business (2021)
Across episodes
The topic recurs across the episodes: the 2015 episode with Brian Walsh treats the regulatory state through overcriminalization and the Evertson prosecution; the 2016 episode with Carol Berkin treats it through the Ninth and Tenth Amendments, judicial deference and a caller’s account of unelected rule; the 2017 episode with Sam Batkins addresses midnight regulations and the mechanics of deregulation; the 2020 episode with Frank Buckley addresses the spending power, federalism and the thickness of the regulatory state; and the 2021 episode with Ed Freeman addresses the politicization of business. The excerpts show no development in the argument across these treatments beyond the shift in emphasis from criminal liability to delegation, federalism and business.
What the sources do not cover
The excerpts do not state the outcome of any litigation over the non-delegation principle, nor do they name the case or cases in which judicial deference was articulated. They do not give the disposition of the Krister Evertson prosecution beyond Walsh’s account, nor the identity of the bureaucrat or agency that issued the sticker rule. The Berkin excerpt does not say which amendment a case turned on or what any case held, and the Batkins excerpt states no figures for midnight regulations specifically. The Freeman excerpt names several statutes but does not describe their provisions.