* * *
—
In 2002, under the Sarbanes-Oxley Act, the Public Company Accounting Oversight Board was given the power to fund itself with taxes on publicly traded companies as it sees fit. “The Board sets its budget for the year,” writes economist Christopher DeMuth, “…divides that amount by the number of U.S. companies weighted by their market capitalizations, and sends each company a bill.” In 2004, the budget was $103 million. In 2005, the Accounting Oversight Board unilaterally increased its budget by 33 percent to $137 million.9 Since then, the budget has nearly doubled, to $268 million as of 2017.10 In fairness, the Securities and Exchange Commission must approve the board’s budgets, but a close reading of the Constitution reveals that “the SEC” is not a nickname for Congress. The power of the purse is the essence of Congress’s power and authority, and its members voluntarily abdicated it.
The term “fourth branch of government” is far too pallid a descriptor of what more properly should be called a shadow government, a state within the state, or imperium in imperio. There is nothing intrinsically sinister in the idea of a fourth branch of government. The Founders could have divided the federal government’s power four ways instead of three if they had wanted to. So long as the doctrine of separated powers was maintained, who would care?
The administrative state is no fourth branch of government. It is a parallel government, operating in the shadows, outside the light of democratic transparency. The best indicator of this stems from the fact that members of the administrative state are not subject to the same system of justice as the rest of us. Charles Murray describes this system well:
If you are prosecuted for violating a regulation issued by the EPA, OSHA, HHS, Department of Energy, or any of the myriad other federal regulatory agencies, you appear before an administrative law judge (ALJ) sitting in an administrative law courtroom. An ALJ is selected by the agency whose cases he will hear, and is subsequently an employee of that agency. The agency gets to choose its preferred candidate from among the three top-rated candidates identified by the Office of Personnel Management. An administrative law judge is exempt from performance reviews and other oversight by the regulatory agency, but may be overruled by the head of the agency.
There’s no jury. When appearing in an administrative court, you do not get a lawyer unless you pay for it. Most rules of evidence used in normal courts do not apply. The legal burden of proof placed on the lawyer making the case for the regulatory agency is “a preponderance of the evidence,” not “clear and convincing evidence,” let alone “evidence beyond a reasonable doubt” that you are guilty. If the administrative judge thinks that it’s a 51/49 percent call in favor of the regulatory agency that accused you, you’re found guilty. If the administrative court judge’s decision is adverse, you may, in most cases, appeal that decision to another body within the agency.11
Although it is necessary to describe the administrative state, my deeper aim here is to explain how this sorry state of affairs is an example of the corruption of the Founders’ project.
The Constitution is indisputably clear. At the federal level, only Congress can legislate. The executive branch executes the law—hence the word “executive.” As John Adams said, the president enjoys “the whole executive power, after divesting it of those badges of domination called prerogatives.”12 Defenders of the administrative state today use the same arguments the progressives used: Such unaccountable power is simply the very definition of good, “modern,” governance. The truth, however, is that it is a throwback to pre-modern forms of state power.
The best authority on this subject is the prominent legal historian Philip Hamburger, a professor at Columbia University. In his seminal book Is Administrative Law Unlawful?, Hamburger demonstrates that the rise of the administrative state is a reactionary effort to restore the lawlessness of arbitrary power banished by the Founders. Hamburger uses the term “absolute power” much the way I’ve been using “concentrated power” or “arbitrary power.” For our purposes, it is a distinction without a difference in that we both mean the wielding of power without lawful checks or popular consent. I prefer “arbitrary power” because it is more suggestive of the human whim behind it. But Hamburger is arguing in the context of a legal tradition that associated the term “absolute power” with prerogative power of kings.
Hamburger offers three reasons why administrative law is unconstitutional. “First, like the old absolute power, administrative power runs outside the law” because it is not directly answerable to, or derived from, constitutional legislative or judicial authority.13 Second, administrative law “is not only extralegal but also supralegal.” “Supralegal” is a fancy way of saying “above the law.” The administrative state is precisely that because judges defer to its authority. In feudal monarchies, the king or queen’s rule is above the common law, in effect creating two systems of justice, one for the people and another for the state. That is the arrangement we have under the administrative state. And third: “The administrative regime consolidates in one branch of government the powers that the Constitution allocates to different branches.”14 This blatantly violates the Madisonian architecture of our republic. As Madison says in Federalist No. 47: “The accumulation of all powers legislative, executive and judiciary in the same hands…may justly be pronounced the very definition of tyranny.”15
Clarence Thomas, one of the few Supreme Court justices to see this abomination for what it is, has chastised the courts for having “overseen and sanctioned the growth of an administrative system that concentrates the power to make laws and the power to enforce them in the hands of a vast and unaccountable administrative apparatus that finds no comfortable home in our constitutional structure.”16
The legal origins of the administrative state in America are somewhat disputed by legal scholars, though the conventional explanation is that it began with the Interstate Commerce Commission in 1887 and was then massively expanded first under Wilson and later under the New Deal and the Great Society. But that misses the point. “The history of administrative law,” Hamburger writes, “…reaches back many centuries. Indeed, this sort of power, which is said to be uniquely modern, is really just the most recent manifestation of a recurring problem [emphasis mine]. It thus is not a coincidence that administrative law looks remarkably similar to the sort of governance that thrived long ago in medieval and early modern England under the name of the ‘prerogative.’ In fact, the executive’s administrative power revives many details of king’s old prerogative power. Administrative law thus turns out to be not a uniquely modern response to modern circumstances, but the most recent expression of an old and worrisome development. Although the label ‘administrative’ is more comforting than the old term ‘prerogative,’ the danger is no less acute.”17
In the Anglo-American tradition, government officials are supposed to be subject to the same laws as everyone else. But not under the administrative state, which insulates the bureaucrats from the rule of law. If a corporation were found responsible for poisoning a river, not only would the corporation be subject to civil and criminal penalties, but so would—at least in certain cases—the corporate officials responsible. Not so when the EPA did exactly that in 2015 when it accidentally dumped one million tons of toxic waste into the Animas River in Colorado.18
One argument that is often made in defense of the permanent bureaucracy in Washington is that it is “virtually” representative in some way. One version of this argument says that because the president is elected, his appointments have democratic legitimacy. And it is true that presidents typically appoint some 4,000 agency heads, commissioners, and the like. That alone should give one pause. We do not have a parliamentary system, and appointing thousands of commissars is a sorry substitute for one. The president, as Hamburger notes, is not a representative body, like Congress or the British Parliament. He is an executive charged with executing laws, not making them.
More to the point, the vast majority of the people who make law through administrative rulings are not picked by a president or any other elected politician. “Far from being elected by the people, let alone elected politicians, they are appointed by other administrators,” Hamburger writes. “Their authority thus is not even virtually representative, but is merely that of a self-perpetuating bureaucratic class. Accordingly, the suggestion that their lawmaking comes with virtual representation is illusory.”19 Indeed, the idea that the state is an entity unto itself charged with advancing the wheel of progress isn’t merely undemocratic; it is a form of mysticism.
Hamburger comes from a different direction, but as the passage above suggests, he comes to a familiar place for the reader who has been paying attention. The regulatory state represents the elevation of a new class, an aristocracy, of men and women who are above the law. This was the original intent of the progressives who set up the administrative state.
Without checks on the power of the shadow government, the shadow government has, predictably, grown in power, scope, and size. It shouldn’t be necessary to document what must be apparent to the average citizen. Still: In 1960 the Code of Federal Regulations had 22,877 pages. It held relatively steady until 1963, the eve of the Great Society. Then, through the end of Lyndon Johnson’s term, the code increased by an average of 5,537 pages per year.20 In 2012 there were 174,545 pages.21
I could go on describing the byzantine bureaucracies within bureaucracies within bureaucracies that spider-web across the nation. But, again, no one disputes the growth in the size of the bureaucracy because it is indisputable. The point here is to see it for what it is, shorn of modern labels. It is a class, an aristocracy, a virtual tribe, that protects its parasitic interests. “Parasitic” is a loaded word, of course, but an appropriate one. One can even stipulate that the permanent bureaucracy does many good things. Our bodies are full of beneficial parasites we literally could not live without. But that doesn’t change the fact that the parasites pursue their ends not out of altruism but out of self-interest.
One can also concede that various civil service reforms in the nineteenth and twentieth centuries addressed some of the very real problems with graft in American government by awarding government jobs based on merit instead of political contacts. But, by doing so, they basically enshrined a kind of gnostic moat around government. The bureaucracy behaved like a guild, rigging not just the rules for entry but for, in effect, lifetime tenure in their favor. As Hamburger puts it, “Civil service reform ensured that only the right sort of persons would be allowed into government, and it simultaneously secured them against being removed by those who were politically accountable to the people.”22 The progressives’ ambitions were much greater than simply sweeping the broom of reform. And by protecting the civil service from the meddling of corrupt politicians, in theory progressives also protected them from honest and responsive politicians who want to make the government accountable.
Moreover, it is simply a fantasy that the administrative priesthood can be walled off from the seductions of human nature. The Turks and Chinese castrated their civil servants and still couldn’t accomplish that. By comparison, a generous salary and a nice pension seem wholly inadequate to the task. No doubt, vast numbers of bureaucrats are decent and committed professionals. But the long history of humanity teaches us that any group of people walled off from accountability can become corrupted.23 The scandals at the Department of Veterans Affairs are sufficient proof of that. You can falsify records and kill patients through bureaucratic subterfuge without getting fired, but if you call attention to such atrocities, that will get you terminated. “Our concern is really about the pattern that we’re seeing, where whistleblowers who disclose wrongdoing are facing trumped-up punishment, but the employees who put veterans’ health at risk are going unpunished,” Carolyn Lerner of the U.S. Office of Special Counsel explained.24
Whether it was the goal or just the unintended consequence of progressives’ actions, the result has been to create a new class of social engineers. The permanent bureaucracy is in reality a kind of permanent legislative, executive, and judicial branch, immune from the priorities of the people it allegedly serves. As John Locke noted, “Where the Legislative is in one lasting assembly always in being” there is always the threat that “they will think themselves to have a distinct interest, from the rest of the Community.” While Locke acknowledged that the class interests of permanent legislatures could lead them to seek “to increase their own riches and power,”25 his chief concern was that they would come to place their own interests and priorities over those of the people.
This is no small concern. Government officials are the only citizens—and they are citizens, not feudal lords—who are allowed by law to use violence for reasons other than self-defense. In this, a flunky from the IRS or the EPA is vastly more powerful than the Koch brothers. “The power which a multiple millionaire, who may be my neighbour and perhaps my employer, has over me is very much less than that which the smallest functionaire possesses who wields the coercive power of the state, and on whose discretion it depends whether and how I am to be allowed to live or to work,” Friedrich Hayek observed.26
The bureaucratic wing of the new class has other special rights and privileges as well. For starters, its members are virtually unfireable. “Death—rather than poor performance, misconduct or layoffs—is the primary threat to job security at the Environmental Protection Agency, the Small Business Administration, the Department of Housing and Urban Development, the Office of Management and Budget and a dozen other federal operations,” a study by USA Today found. In 2010, the 168,000 federal workers in Washington, D.C.—who are quite well compensated—had a job security rate of 99.74 percent. A HUD spokesman told USA Today that “his department’s low dismissal rate—providing a 99.85 percent job security rate for employees—shows a skilled and committed workforce.”27
Not to overly strain the analogy, but if the bureaucrats are a priesthood, the public sector unions are its Jesuits. Unions by their nature are first and foremost concerned with their own members’ interests. Private sector unions often do not put the consumer’s, never mind the employer’s, well-being above their own, and public sector workers do not put the citizenry’s interests first either. Many individual members of teachers’ unions no doubt care about the plight of students, but there is remarkably little empirical evidence that they, institutionally, put the interests of children ahead of their own.
I’ve tried to avoid making explicitly partisan arguments, but attention must be paid to the insidious and incestuous relationship between the Democratic Party and government unions. It is no accident that the National Treasury Employees Union, which represents the IRS, gave about 96 percent of its political donations during the 2016 election cycle to Democratic candidates.28 In 2016, the American Federation of Government Employees contributed about 93 percent of its political donations to Democratic candidates.29 It is fine to argue that the wealthy support the Republican Party out of economic self-interest—even if the evidence for this is disputable—but is it really so ridiculous to imagine that a class of workers might be seduced by the same impulses? The new class is economically, ideologically, and psychologically invested in the primacy of government. It should not surprise us that its members would seek to protect that investment by supporting the party of government, particularly the shadow government.
Milovan Djilas, writing about the new class in communist countries, observed that “this new class, the bureaucracy, did not come to power to complete a new economic order but to establish its own and, in so doing, to establish its power over society.”30 There are obvious differences between the new class of, say, the Soviet Union and the United States of America. But beneath the ideological and culture distinctions, no matter how important, lies the unchanging fact of human nature. There is no limiting principle inherent to the idea that a caste of exper
ts should be empowered to do whatever they think is right. The one idea even the most pragmatic bureaucrat will never contemplate is the suggestion that maybe we would be better off if he did not have a job anymore.
One more point must be made, or remade but emphasized. In its best and most sincere form, the argument for a “disinterested” permanent bureaucracy walled off from elected politicians hinges upon the claim that this is the only way to advance the public interest against private interests. The problem with this claim is that it is patently false on its face.
The branch of economics called “public choice” has demonstrated at length that in a system in which you have concentrated benefits and dispersed costs, a small number of agents with a lot to gain often, maybe even routinely, overpower the interests of the majority.31 Democracies naturally tend to give special benefits to certain groups or constituencies. The groups care a great deal about these benefits, but the general public does not. The beneficiaries come to expect and depend on these “rents” and will fight with a passion to keep them, but there are few constituencies nearly as committed to getting rid of them. Over time, the special interests proliferate. The more they proliferate, the more the government sector grows but also becomes a kind of virtual tragedy of the commons, as it becomes clear to all others that they, too, must press for their own special benefits. (This is one reason for the incredible explosion of lobbying over the last forty years.)32 Eventually, more and more of the government becomes dedicated to servicing special interests, and the ability of the government to deal with new or simply more pressing challenges narrows. Rather, the government gets better and more efficient at servicing the needs of clients while becoming clumsy and unresponsive to more important public problems. In short, the government becomes “sclerotic,” hence the “sclerosis” in “Demosclerosis,” a term coined by Jonathan Rauch in his 1994 book by the same name. Rauch defined “demosclerosis” as “government’s progressive loss of the ability to adapt.” This process has been identified in virtually every advanced democratic country.
Suicide of the West_How the Rebirth of Tribalism, Populism, Nationalism, and Identity Politics Is Destroying American Democracy Page 23